The budget changes made this week can create new opportunities for property investors.
Significant changes create new opportunities. The investors who act with clarity during uncertainty are consistently the ones who come out ahead.
Change one: Negative gearing
For your current portfolio, nothing changes. Negative gearing continues on what you already hold.
From here, negative gearing will only apply to new builds. New builds are exempt from these changes entirely. GoReal are the experts in new builds.
And in our experience, these are the best properties to invest in anyway.
With lower costs, stronger tenant demand, and less maintenance.
And the depreciation benefits alone can deliver a substantial reduction on your taxable income.
Change two: Capital Gains Tax
The 50% CGT discount is being replaced with an inflation-linked discount, and a new minimum 30% tax on capital gains will apply from 1 July 2027.
The good news here is these changes are grandfathered.
This means the new rules simply don't apply to any property you already own.
They only apply to established properties - you can still have the old model of 50% CGT on new builds or even choose the new model if it works better for you financially.
A lot of investors are either going to sell or hold off purchasing. At GoReal we believe that would be a huge mistake.
Higher rents are likely as investors sell up. Those who move now will be in the strongest position when confidence returns.
Get the jump on the changes – if you’re sitting on the fence, now is the time to act.
P.S. Any time there’s a major change, people react in two ways.
One group looks for opportunities and acts on them.
The other waits until everyone else has moved and gets left behind.
Barbara Hutson