Calculator / Enacted law from 1 July 2027

Negative gearing change impact.

Negative gearing has not been abolished. From the 2027-28 income year, a rental loss on an established residential property acquired after 7:30 pm ACT legal time on 12 May 2026 is quarantined — carried forward instead of deducted against your salary this year. This works out what that does to one property's tax and cash flow.

Enacted law · Act No. 49, 2026 Basic income tax only Your figures stay in your browser

The property

Grandfathering runs from the date you entered the contract, not settlement. An off-the-plan contract signed before the cut-off keeps the current treatment even if it settles years later.

Contract date Contract time (ACT legal time) Only matters on 12 May 2026. The cut-off is 7:30 pm exactly.

Is it an established residential property?

Yes, established No, it is a new build

Has new-residential-dwelling status been confirmed?

Yes, confirmed No Not sure

Eligibility is set by a ministerial legislative instrument that has not been made yet. A build year, a listing or a sales team cannot confirm it — only advice or published ATO guidance can. If you are not sure, this calculator will stop rather than guess.

Your income

Taxable income before this property Your full taxable income, not just salary. Income year

The property's year

Gross annual rent Deductible cash costs Interest, rates, strata, agent fees, insurance, repairs. Exclude loan principal. Non-cash deductions Capital works and depreciation. Reduces tax but not cash. Loan principal repaid Cash out the door, but never a deduction. Opening quarantined-loss balance Carried forward from earlier years. It can only be used against this property's income in this single-property model.

Anything else true?

Tick anything that applies. Each one pushes the maths beyond what a single-property estimate can do accurately, so the calculator will stop and say so rather than show you a wrong number.

It is owned through a trust, company or SMSF I own less than 100% of it I own other residential property, or expect residential capital gains It has any main-residence, holiday-home or mixed use

Your estimate

This educational estimate uses the inputs and assumptions shown. It does not include every tax rule or personal circumstance. Confirm a consequential decision with a registered tax agent.

What this means if you are buying

The carve-out is the whole story.

An established dwelling bought after the cut-off has its losses quarantined. A qualifying new residential dwelling does not. That is a real difference in after-tax cash flow between two otherwise similar properties — and it is why the eligibility question is worth getting in writing before you sign, not after.

The catch is that "new" is not yet defined in law. It sits with a ministerial legislative instrument that has not been made. Treasury's exposure draft proposes a property acquired within 24 months of a certificate of occupancy being issued, and consultation on it closed in August 2026 — so the shape is visible, but the detail can still move.

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Want to know how this lands on a specific property?

Quarantining changes the after-tax cash flow on an established dwelling but not on a qualifying new build. If you are choosing between the two, that gap is the whole decision. Tell us what you are looking at.

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Where every figure comes from

Sources, and what is still being settled.

The reform is law. Some of the detail underneath it is not finished yet. Anything marked detail pending below can still change, so treat it as a planning assumption rather than a settled rule.

Enacted law Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026)
Assented 26 June 2026. Schedule 1 replaces the 50% CGT discount with cost-base indexation and adds a 30% minimum rate of tax on capital gains. Schedule 2 limits negative gearing for residential property to new builds.
Enacted law ATO — Tax reform: negative gearing and capital gains tax
The ATO's administrative guidance on both measures, including the transition and grandfathering rules.
Enacted law Budget 2026–27 — Negative gearing and capital gains tax factsheet
Sets the 7:30 pm ACT legal time, 12 May 2026 grandfathering cut-off and the 2027-28 start year for loss quarantining.
Detail pending Treasury — CGT and negative gearing: Tranche 2 consultation
The detailed definition of a qualifying new residential dwelling, and several transition mechanics, are still being consulted on. Do not treat new-build eligibility as settled.
Enacted law ATO — Tax rates for Australian residents
The resident marginal rate scale used for every tax figure on this page.
Enacted law Legislated tax cuts to the $18,201–$45,000 bracket
The rate on the second bracket falls to 15% from 1 July 2026 and 14% from 1 July 2027.

Tax configuration version 2026-08-13 · Rates and thresholds as legislated at that date

Common questions

What people ask about the changes.

When does negative gearing change for residential property?

The loss-quarantine rule starts in the 2027-28 income year. Until then, a net rental loss on any residential investment property is deductible against your other income under the current rules.

Are properties held before 12 May 2026 grandfathered?

Yes. A residential dwelling you acquired before 7:30 pm ACT legal time on 12 May 2026 is grandfathered and keeps the current treatment. What matters is when you entered the contract, not when it settled — so an off-the-plan contract signed before the cut-off stays grandfathered even if it settles years later. A contract entered at exactly 7:30 pm is not grandfathered.

What happens to a rental loss on an established property bought after the cutoff?

The loss is quarantined, not lost. It cannot be deducted against your salary and wages in that year. Instead it becomes a quarantined amount that carries forward, and it can be applied against future residential rental income or eligible residential capital gains. This is why calling the reform an abolition of negative gearing is inaccurate — the deduction is deferred, not removed.

Can a quarantined property loss be used later?

Yes, but only against particular income. A quarantined amount can be applied against residential rental income or eligible residential capital gains in a later year, and any unused balance keeps carrying forward. Whether it ever produces a tax benefit, and how much, depends on your future property income, whether you eventually sell at a gain, and your marginal rate at that time.

Are new residential dwellings treated differently?

Yes. A qualifying new residential dwelling remains negatively gearable, so a net rental loss on it can still be deducted against your other income. The Act sets no time limit on that treatment for the original investor. The detailed definition of a new residential dwelling is set by a ministerial legislative instrument that has not been made yet, so eligibility is not something this calculator, a build year or a listing can determine for you.

Does this calculator include the Medicare levy or tax offsets?

No. It estimates basic income tax only. It excludes the Medicare levy and surcharge, the Working Australians tax offset, the standard work-related-expense deduction, low-income and other offsets, HELP debt repayments, PAYG credits and all state taxes including land tax and stamp duty. It also models a single property, not a portfolio.

This is an estimate, not advice.

These calculators are general information. They do not take your circumstances into account, they are not a tax return, and they are not a substitute for a registered tax agent. Before you act on a number here — buying, selling, or restructuring — get it checked by someone who can see your whole position.

What stays on your device

Every calculation runs in your browser. Your figures are never sent anywhere automatically — close the tab and they are gone. The only exception is if you fill in the enquiry form and tick the box asking us to include them, which sends exactly the text the "Copy calculation" button shows you.