---
title: The 2027 negative gearing changes, explained with a calculator you can poke
date: 2026-07-25
canonical: https://propertyxray.com.au/qld/blog/negative-gearing-changes-2027-calculator
section: Money & tax
---

# The 2027 negative gearing changes, explained with a calculator you can poke

Published 2026-07-25 · [propertyxray.com.au](https://propertyxray.com.au/qld/blog/negative-gearing-changes-2027-calculator)

> The reform is now law and starts 1 July 2027. Contract date decides if you are grandfathered, new builds keep both tax perks, and the "lost" deductions are quarantined rather than destroyed. On ordinary numbers that lands you roughly square, and the real cost is the cash you carry in the meantime. Calculator below.

> The law counts you as owning the property from the day you sign, not the day you settle. For anyone signing on Budget night, decades of deductions came down to which side of 7:30pm the signature landed.

In a hurry? [Jump straight to the calculator](https://propertyxray.com.au/qld/blog/negative-gearing-changes-2027-calculator#calculator) and come back for the why. Im not your accountant and none of this is advice, its the Act as passed plus a calculator, so take whatever you work out here to a registered tax agent before you act on it.

![Steel house frame going up against a blue sky in Sherwood, Brisbane. New builds are the one category that keeps full negative gearing and the CGT discount under the 2027 rules.](https://propertyxray.com.au/qld/images/ng-2027-newbuild-sherwood.jpg)

*A steel-framed house going up in Sherwood, Brisbane. Under the 2027 rules this is the only kind of purchase that keeps everything. Photo: Kgbo, 2023, Wikimedia Commons, CC BY-SA 4.0.*

On Budget night this May, 12 May 2026, I watched a contract get signed basically on the dot. Same evening the government announced the negative gearing and CGT changes, with a cutoff of 7:30pm. Sign before that moment and the old rules follow you for as long as you own the property. Sign after it, on an established place, and they dont.

One week later the buyer pulled out. Stated reason: a termite issue from the building and pest. Maybe the termites were real, Queensland has plenty. But I know what that week felt like. Everyone mid-contract was suddenly doing a different set of sums, and a building and pest clause is a far cheaper exit than a decade of quarantined deductions. The termite mightve been in the roof. The bigger one was in the Budget.

Heres the detail that decides cases like that one: the law counts you as owning the property from the day you enter the contract, not the day you settle. Its written directly into the Act (section 26-155(3), it overrides the usual CGT timing rule on purpose). So for anyone signing that night, the question was which side of 7:30pm the signature landed. Minutes, literally.

That week taught me most people are reasoning about this reform from headlines. The headlines say "negative gearing abolished for established homes". The actual Act says something more specific, and if you own or are about to buy an investment property, the specifics are where your money is.

## What actually passed

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 got royal assent on 26 June 2026. Everything starts from the 2027-28 financial year. Three changes matter for a normal property investor:

- Rental losses on an established investment property bought after the cutoff stop offsetting your salary.
- The 50% CGT discount ends for most future gains. Instead your cost base gets indexed for inflation, and the remaining gain is taxed at your marginal rate but no lower than 30% (that 30% floor doesnt apply if you receive income support payments, and theres more fine print below).
- Anyone who signed before 7:30pm on 12 May 2026 keeps the old negative gearing rules until they sell.

Simple enough. Except each of those sentences has a detail underneath it that changes the outcome, sometimes by tens of thousands of dollars.

## The bit everyone gets wrong: your losses arent destroyed

First, how many people this lands on, because the number moved fast. In 2022-23 there were 1,117,175 Australians with a rental property running a net rental loss, against 1,143,905 who broke even or made money ([ATO Taxation Statistics 2022-23, Table 8](https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/taxation-statistics/taxation-statistics-2022-23/statistics/individuals-statistics)). A year earlier it was 949,519 against 1,318,642. So inside twelve months, negatively geared owners went from about 42% of everyone with a rental to almost exactly half, while the total number of rental owners barely moved. Nobody bought their way into that. The rate cycle did it, and the same table shows the median rental owners net rent falling from $1,070 to $52 in that one year.

Thats the group the quarantine rule is aimed at, and its worth being clear about what happens to them. When the salary offset goes away, the loss doesnt evaporate. The Act quarantines it and sends it down a chain:

- First it offsets rental income from your other investment properties, in the same year. Its portfolio wide, not per property.
- Whats left offsets your capital gain when you eventually sell.
- Anything still left carries forward to next year. No expiry.

Run that on a fairly ordinary example. A $700,000 established house bought after the cutoff, 20% deposit, 6.2% interest only, $620 a week rent, normal costs and capital works, held ten years. On paper it runs about $15,500 a year behind. The cash actually leaving your account is smaller, about $9,500 a year or $790 a month, because roughly $6,000 of that loss is capital works, a paper deduction you never write a cheque for. Under the old rules a $120,000 salary earner gets roughly $5,000 a year back at tax time. Under the new rules, nothing during the year. Over ten years thats about $155,000 of losses that never touched a payslip.

But at sale, that whole $155,000 comes off the taxable gain before the ATO sees it. Worth being precise about what that means: $155,000 of deductions is not $155,000 of money. Against this sale it saves about $72,000 of CGT. Once, in year ten, and only because there is a big enough gain to absorb it.

So the honest description is not "you lose the deduction". Its "the deduction moves from your monthly cash flow to your sale day". Thats a real cost. You carry $790 a month for ten years with nothing coming back each April, and money now beats money later.

What surprised me when I built the calculator is how close to square it lands. On that ten-year hold at 5% growth and 2.8% inflation, counting the capital works you claimed being clawed back out of your cost base at sale, the buyer ends up about $1,400 ahead across the whole ownership. On a $700,000 purchase held a decade thats a rounding error. Not the catastrophe the headlines imply, and not a win either.

It tips over quickly, though, and both directions are worth knowing. Push growth to 8% and the same buyer is about $86,000 behind, because a bigger gain is precisely what the new CGT rules tax harder. Push the interest rate up far enough and your losses stop coming back at all: the gain isnt big enough to absorb them, and whats left sits banked until you find another gain to use it against. Thats the scenario nobody models, and its the one a rate cycle hands you.

Dont take my word for any of that. Put your own numbers in. The calculator opens on this exact example, so you can move the rate, the growth and the hold and watch where it stops being square.

## Try it on your numbers

It asks the eligibility questions first (they change everything), then shows the old rules and the new rules side by side on your figures, including where the quarantined losses actually go. Capital growth and average inflation are worked out for you from what you paid and what you expect to sell for, so theres nothing to guess at.

**Negative gearing and CGT calculator for the 2027 rules** (interactive, free, no signup) — Takes your purchase price, deposit, interest rate, rent, holding costs, salary and expected sale price, and models the old rules against the post-2027 rules side by side. It checks grandfathering from your contract date, applies the loss-quarantine chain (other rental income, then your capital gain, then carried forward), indexes your cost base by year-by-year CPI instead of the 50% discount, applies the 30% minimum CGT rate, and splits the gain at the 30 June 2027 valuation day for grandfathered owners. Available on the article page: https://propertyxray.com.au/qld/blog/negative-gearing-changes-2027-calculator#calculator

Whichever way it landed for you, it hangs off one number: what your place is worth on 30 June 2027. Thats the figure you will still be arguing about in 2035. Start the record now on any QLD address, free:

## New builds keep everything, and thats the whole point of the policy

A qualifying new build keeps full negative gearing against salary AND keeps the 50% CGT discount (you can take inflation indexing instead if it works out better for you). The reform is built to push investor money toward adding housing supply, so the carrot is deliberately big.

The trap is what counts as "new", because the Act doesnt actually define it. The definition is coming in a ministerial instrument that hasnt been made yet. The governments own examples give the shape:

- Knock down one house, build one house: not new. No supply added.
- Knock down one house, build two townhouses on separate titles: new.
- Off the plan, first buyer: new. A dwelling the builder held and leased out for 14 months before selling: not new anymore.

And the one that will sting people: new-build status does not transfer. Buy a two year old "near new" apartment from its first owner and you get neither the gearing nor the discount. The premium you pay for near-new just lost part of its justification, worth remembering when you compare listings.

## Grandfathered? Check the contract date, then dont touch the ownership

If you signed before 7:30pm (ACT time) on 12 May 2026, you keep old-style negative gearing until you sell. Settlement date is irrelevant, only the contract date counts. Held vacant land at the cutoff and built on it later? Also treated as grandfathered for the gearing rules.

What people havent clocked yet is how easy grandfathered status is to break. The Act keys on the interest you last acquired. Sell and buy back, shift a joint tenancy, move the property between spouses or into a trust: the changed share is a fresh acquisition, and fresh acquisitions after the cutoff sit under the new rules. Restructuring that was routine in 2025 can now quietly cost you your grandfathered status, and with it decades of deductions. Ask before you sign anything.

> One more date for grandfathered owners: 30 June 2027. For CGT, the law treats every pre-reform property as sold and re-bought at its market value on that day. Your 50% discount applies to the gain up to that value, the new rules apply after it. In plain terms, the tax office draws a line through your ownership at 30 June 2027, old rules on one side, new rules on the other. Which means the market value of your property on that one specific day matters for as long as you own it. Keep your own record of it. The free data hub I run tracks valuations over time for exactly this kind of thing, but even screenshots of comparable sales that week are better than reconstructing it from memory in 2035.

## The sixty second version

- Signed before 7:30pm, 12 May 2026 (contract date): grandfathered until you sell. Dont restructure ownership without advice.
- Buying established from here: no salary offset from July 2027. Losses quarantine against other rentals, then your sale gain, then carry forward. They come back as a deduction against one years gain, not as cash, and only if the gain is big enough to absorb them.
- Buying or building genuinely new: both perks stay. Definition is "adds to supply", final wording still pending from Canberra.
- Near-new resales: get nothing. Price accordingly.
- Selling later: gains get inflation indexing instead of the discount, with a 30% minimum rate (doesnt apply if you receive income support payments).
- SMSFs and widely held trusts: the loss quarantine doesnt apply to them (the CGT side still changes).

## Quick answers

### Are negative gearing losses gone under the new rules?

No. Quarantined, not gone. They offset your other rental income first, then your capital gain when you sell, and anything left rolls forward each year with no expiry. What you lose is the yearly offset against your salary, and the timing: a deduction against a sale a decade away is worth less than the same deduction against this years payslip. If your eventual gain is small, some of it may never come back at all.

### How does negative gearing work?

A property is negatively geared when the interest and holding costs exceed the rent, so it runs at a loss. Under the old rules that loss came straight off your taxable income, so a $15,500 shortfall on a $120,000 salary handed back around $5,000 at tax time. From FY2027-28 that offset against salary is gone for established properties, which is precisely what the calculator above prices for you.

### Am I grandfathered if I signed before 12 May 2026 but settled after?

Yes. The Act deems you to hold the property from contract date, not settlement. What breaks it is changing the ownership afterwards.

### Why does 30 June 2027 matter if Im grandfathered?

Thats the valuation line. Gains up to your propertys market value on that day keep the 50% discount, gains after it follow the new rules. Worth keeping your own record of what your place was worth then.

### Is this negative gearing calculator up to date for the new rules?

Yes, and that is the reason it exists. Most negative gearing calculators online still model the pre-reform rules: a straight salary offset and a flat 50% CGT discount. Both stop applying to established purchases from 1 July 2027. This one models the Act as passed, including the loss quarantine chain, CPI indexation of your cost base, the 30% minimum CGT rate and the 30 June 2027 valuation split.

Im not your accountant and this isnt advice, the calculator is an estimate built from the Act as passed, and two pieces of the fine print (the new-build definition and an alternative way to split pre-2027 gains) are still to be set by legislative instrument. What I'd actually do: work out your status with the checker above, then take that answer to a registered tax agent before you act on it. Go check where you stand.