On 12 May 2026, as part of the 2026–27 Federal Budget, the Government announced reforms to negative gearing and capital gains tax (CGT) arrangements. These measures have now been legislated and will take effect from 1 July 2027.
Under the reforms, negative gearing for residential property investments will be limited to new builds, and properties used for specific purposes (such as NDIS and community housing). Properties held at the time of the announcement (7:30 pm AEST on 12 May 2026) will be exempt from the negative gearing changes.
The Reforming negative gearing special purpose working group will bring together industry experts to provide insights and technical considerations to help inform the implementation of the reforms, including the changes required to tax and superannuation products and services.
A key focus will be supporting a rental property regime that accommodates different tax treatments for different types of properties:
- residential rental properties subject to the new quarantining arrangements
- residential rental properties not subject to quarantining
- non-residential rental properties.
Interactions with the CGT regime will also be priority issue.
Consultation
The Reforming negative gearing charter will describe the purpose, membership, roles and responsibilities of the group, and will be published along with the list of members once the Expression of interest process is finalised.
The ATO consultation framework underpins our consultation framework arrangements.
Contact information
DSPs can provide feedback or ask questions by raising a ticket in Online Services for DSPs.
The secretariat of the Reforming negative gearing special purpose working group can be contacted by email at DPO@ato.gov.au.