Last week’s Federal Budget changed the game for property investors. The headline moves are straightforward: negative gearing on established properties bought after 12 May 2026 is now quarantined, meaning you can no longer use rental losses to reduce your regular taxable income. And from 1 July 2027, the 50% capital gains tax discount is gone, replaced with a 30% minimum tax rate.

New builds are exempt. Older stock is not.

If you are holding a pre-1990s investment property that needs capital spent on it, the maths has shifted considerably. You no longer get the tax relief that made upgrading and holding worthwhile. Every dollar you spend on that ageing roof, outdated kitchen or tired electrical system now comes without the offset it used to. And that is before you factor in the emotional weight of it. A lot of the investors I speak to have been quietly carrying these properties for years, telling themselves the timing is not right to sell, that they will do the reno next year, that the market will reward them for holding on. That patience made sense under the old rules. Under the new ones, every month you wait is a month you are funding a depreciating asset with after-tax dollars and no safety net.

There is also a bigger question nobody is talking about loudly enough yet. Investor demand for established properties is expected to fall, with house price growth now forecast at around 3% to the end of 2026, down from earlier predictions of 5%. When investors stop competing for older established homes, who picks up that demand? First home buyers are the intended beneficiaries of these changes, but they tend to want move-in ready properties, not homes that need significant work. Existing investors may hold rather than sell, reducing listings and market liquidity, while others shift their attention toward new builds entirely. The honest concern is that older established homes, particularly those needing renovation, could find themselves in a thinner market with fewer motivated buyers and softer prices.

That is not a certainty, but it is a real risk worth weighing now rather than in 2027.

Grandfathered investors who sell before the CGT changes take hold still benefit from the old rules. Wait too long and that advantage disappears. The window to exit on favourable terms is open right now. It will not stay that way.

If you have been wondering how much more to put into an older investment property, that question has just answered itself. We buy established homes off-market, no agents, no fees, no open inspections. Just a straight conversation about what your property is worth.

Get in touch with us today.