Negative gearing is limited to new builds and the 50% CGT discount is replaced from 1 July 2027. Nothing changes in the returns you lodge before then — but the records and decisions you make in the meantime decide how the new rules land. Work through this list once for each property.
1. Confirm your category
- Find the contract of sale and note the contract date and settlement date.
- Held at 7:30 pm AEST on 12 May 2026? The property is exempt from the negative gearing change. Keep the contract with your tax records permanently.
- Contract exchanged before, settled after 12 May 2026? Flag it for us — acquisition timing follows the ATO's guidance and decides your category.
- Bought after 12 May 2026? Determine whether it is a new build (newly constructed, not previously occupied or sold) or established. Keep the developer's documents or occupancy certificate for a new build.
2. Anchor the 30 June 2027 value
- Book a valuation for around 30 June 2027 — a registered valuer for higher-value or unusual property, an agent appraisal plus comparable sales for a standard unit or house.
- Keep the evidence on file with the property's tax records; it supports the split between gain accrued before and after 1 July 2027 when you sell.
- Photograph the property's condition at the time, so later improvements can be separated from the pre-2027 value.
3. Complete the cost base
- Purchase contract and settlement statement.
- Stamp duty, conveyancing, legal fees, building and pest inspections at purchase.
- Capital improvements since purchase — invoices for renovations, extensions, new appliances and structures (not repairs).
- Capital works claimed each year since purchase — these reduce the cost base; we take them from your returns and the depreciation schedule.
- Holding costs not claimed as deductions during any period the property was not rented (for property bought after 20 August 1991) — rates, insurance, interest.
4. Review ownership
- Check the title — joint tenants or tenants in common, and the registered shares. Income, losses and the gain follow this split.
- Before any new purchase, decide whose name and what structure — the income the loss meets, the marginal rate on the gain, and the 2027 category all follow from it. Changing later usually means CGT and stamp duty.
- Company or trust owners — confirm the agent nomination with the ATO is in place and note that companies get no CGT discount under either set of rules.
5. Update depreciation
- Obtain a quantity surveyor's schedule if you don't have one and the building was constructed after 15 September 1987 or has been renovated.
- Add new plant you have bought (appliances, carpets, blinds) to the schedule — for second-hand residential property, only items you bought new are depreciable.
- Record the capital works total claimed to date for the cost base.
6. Model planned purchases and sales
- Any established property you plan to buy — run it through the negative gearing calculator with the post-12-May-2026 setting. It must work on rent and growth; the tax subsidy on the loss ends on 1 July 2027.
- Any property you plan to sell — run the CGT calculator for the current rules and ask us to model the pre/post-2027 split if you'd hold past July 2027. Gains to 30 June 2027 keep the 50% discount whenever you sell.
- Contract dates — CGT falls in the year the contract is signed. A sale that straddles 30 June lands in the earlier year.
- Loan redraws — interest on money redrawn for private purposes is not deductible; keep the investment loan clean.
7. Every year, keep collecting
- Property manager's annual statement; rent received directly; bond retained.
- Loan statements for the full year; details of any redraw or refinance.
- Rates, land tax, insurance, body corporate notices; repair and maintenance receipts.
- Dates the property was vacant, used privately, or let to family at below-market rent.
- The full rental property checklist covers each item.
Frequently asked
Do I have to do anything if I already own the property?
Your negative gearing is protected if you held the property at 7:30 pm AEST on 12 May 2026, so nothing changes there. The CGT change still reaches you for gains after 1 July 2027, which is why the valuation and cost base items on this list matter even for long-held properties.
Is a formal valuation required?
The legislation and ATO guidance will set how the gain is split at 1 July 2027 — by valuation, by time apportionment or by choice. Until that is settled, written evidence of the value around 30 June 2027 is cheap insurance: a registered valuer's report, or at least an agent's appraisal and comparable sales kept on file.
I'm buying an established property next month. What changes?
From 1 July 2027 its losses can't be offset against your salary — only against other residential property income, with the excess carried forward. The deductions still exist. Run the purchase through the negative gearing calculator with the 'established, bought after 12 May 2026' setting so you see the after-tax cost under both rules before you sign.
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Based on the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and the ATO's published description of the measures as at 30-10-2026. The new-build definition, acquisition-timing rules and the method of splitting gains at 1 July 2027 depend on the Act and ATO guidance; we will update this list as it is published. General information, not advice.