What Changed on 1 July 2026 for Property Investors: New Financial Year Guide

Who This Is For

You own — or are about to buy — an Australian investment property, and the new financial year has just ticked over. You've seen headlines about a $3 million super tax, a ban on borrowing inside super, and an overhaul of negative gearing, and you're not sure which of them actually apply to you, which started on 1 July 2026, and which are still coming. This guide sorts the noise from the signal: exactly what changed at the start of the 2026–27 financial year, what is now locked in and counting down, and what you may think changed but hasn't. Every figure is sourced to the ATO, Treasury or the relevant state revenue office.

This is general information, not personal tax, financial or credit advice. The rules below have detail and exceptions this article can't cover, and several are brand-new law where practitioner guidance is still settling. Confirm your position with a registered tax agent, licensed financial adviser or SMSF specialist before acting. Figures are current to early July 2026.

In force from 1 July 2026    Legislated, commences later

For the fastest possible orientation:

Why 2026 Is the Heaviest Policy Year in a Decade for Property Investors

Most financial years bring a routine tweak or two — a cap indexed here, a threshold nudged there. 2026 is different. Three separate reform tracks converged in the space of a few months: a superannuation package (higher caps, a new $2.1M transfer balance cap and Division 296), a personal-tax package (the legislated bracket cuts), and — most significantly for investors — the Tax Reform No. 1 Act 2026, which bundled the negative-gearing and CGT overhaul with a late-added ban on SMSF residential borrowing. Two of those three tracks passed Parliament in the final week of June 2026, days before the new financial year began.

That compression is why there's so much confusion about what actually applies now. The reforms don't all start on the same day: the super and personal-tax changes are in force from 1 July 2026; the SMSF borrowing ban starts around 10 August 2026; and the negative-gearing and CGT changes don't bite until 1 July 2027, with a grandfathering line drawn back on Budget night (12 May 2026). An investor who reads a headline about “negative gearing scrapped” and assumes it hit their existing portfolio on 1 July 2026 has the wrong mental model — and could make a poor decision because of it.

It also lands at a delicate moment in the market. Prices turned down nationally through mid-2026, led by Sydney and Melbourne, with auction clearances below 50% and stock building — a genuine buyer's market in the two largest capitals. The policy changes and the market softness are connected: reform uncertainty is one of the forces cooling investor demand for established dwellings. For a full read of where prices sit, see our Cotality Home Value Index June 2026 analysis; for how to act on a softer market, see Buyer's Market Australia Winter 2026.

The rest of this guide is organised to match that reality: what's in force now, what's law but counting down, what changed at state level, and what didn't change at all.

Part 1 — What Actually Took Effect on 1 July 2026

These are the real, in-force changes. Most are in superannuation, because that is where the 2026 policy action has concentrated — which matters to property investors because super (and especially SMSFs) is a major vehicle for holding property.

1. The concessional contributions cap rose to $32,500

The concessional contributions cap — the annual limit on before-tax money going into super, covering employer Super Guarantee, salary sacrifice and personal deductible contributions combined — increased from $30,000 to $32,500 on 1 July 2026. The cap is indexed to average weekly ordinary-time earnings and moves in $2,500 steps, and this is the first increase since it went to $30,000 in July 2024.

Why an investor cares: a deductible super contribution is one of the few remaining levers to cut taxable income in a high-income year — for example, the year you sell a property and crystallise a capital gain. An extra $2,500 of cap is an extra $2,500 you can potentially deduct at your marginal rate. If you have unused cap from prior years and a total super balance under $500,000, the carry-forward rules can let you contribute well beyond the annual cap in a single year (the catch-up ceiling can reach roughly $175,000 in 2026–27 for those who qualify).

2. The non-concessional cap rose to $130,000 — and bring-forward thresholds moved

The non-concessional contributions cap (after-tax contributions) is set at four times the concessional cap, so it rose from $120,000 to $130,000 on 1 July 2026. The three-year “bring-forward” arrangement, which lets eligible members contribute up to three years' worth in one hit, now works off the higher figure and the new $2.1M transfer balance cap:

• Total super balance under $1.84M at 30 June 2026 → three-year bring-forward of $390,000
• $1.84M to under $1.97M → two-year bring-forward of $260,000
• $1.97M to under $2.1M → standard $130,000 only
• $2.1M or more → nil

This matters most to investors selling a property outside super and wanting to recontribute proceeds into super, or couples equalising balances for Division 296 and estate-planning reasons (more on that below).

3. The transfer balance cap rose to $2.1 million

The general transfer balance cap — the lifetime limit on how much you can move into the tax-free retirement (pension) phase — increased from $2.0M to $2.1M on 1 July 2026, a CPI-indexed $100,000 step. Anyone starting a retirement-phase pension for the first time from 1 July 2026 gets the full $2.1M cap; those who already have a pension receive only a proportional increase based on how much of their cap they've previously used.

For property-heavy SMSFs, the transfer balance cap is the constraint that decides how much of a fund's assets can sit in the tax-free pension environment. A higher cap gives a little more room to shelter income (including rent) from tax in retirement phase.

4. Division 296 switched on — the extra tax on large super balances

This is the big one for high-balance SMSF investors, and it is widely misunderstood — partly because the final law is materially different from the version debated through 2024–25.

The details that matter:

• It taxes realised earnings, not paper gains. The earlier, heavily criticised proposal that would have taxed unrealised gains was dropped. The enacted law builds earnings from actual taxable income — interest, dividends, rent and realised capital gains, less deductions — which removes the cash-flow nightmare that property-heavy and illiquid SMSFs feared.
• The thresholds are now indexed. The $3M threshold indexes in $150,000 steps and the $10M threshold in $500,000 steps — another change from the original non-indexed design.
• First measurement is 30 June 2027; first tax is payable in 2027–28. Nothing is owed on 1 July 2026 — the clock simply started. Payment falls due 84 days after assessment.
• There is an optional, one-off cost-base reset. Funds can make an irrevocable, all-or-nothing election to reset asset cost bases to their 30 June 2026 market value for Division 296 purposes, lodged in the approved form by the due date of the 2026–27 fund return. For a fund holding a long-held, heavily-appreciated property, this election can materially change the maths — and it is a genuine one-time decision.
• It affects a small group — but a group that skews toward property. Treasury's figure is roughly 80,000–90,000 people (about 1 in 200), and SMSFs holding real property are over-represented among them because a single commercial or residential asset can push a balance past $3M.

Because this is the single most consequential planning decision of the decade for affected SMSF trustees — and because the cost-base election is irrevocable — get specialist advice before acting. Our companion guide walks through the levers, the cost-base election and worked case studies: Division 296 SMSF Property Owners' Action Guide.

5. The 16% tax bracket dropped to 15%

On the personal side, the legislated cost-of-living tax cut took effect: the rate on taxable income between $18,201 and $45,000 fell from 16% to 15% on 1 July 2026 (and is legislated to fall again to 14% from 1 July 2027). The full 2026–27 resident schedule:

Plus the 2% Medicare levy.

For property investors the effect is subtle but real. Negative gearing works by deducting a rental loss against your other income at your marginal rate; when a bracket rate falls, the after-tax value of a given deduction at that rate falls slightly too. The change is small at the 15% bracket, but it's a reminder that the value of negative gearing is a function of your marginal rate — and rates are drifting down at the bottom while the big structural change to gearing itself is coming in 2027 (Part 2).

The Medicare levy low-income thresholds also lifted for 2026–27 (to roughly $28,011 for singles and $47,238 for families, plus around $4,338 per dependant), and the Medicare Levy Surcharge thresholds remain at $105,000 (single) / $210,000 (family). These rarely change an investor's core strategy, but they matter when you're timing income around a sale or a high-contribution year.

What didn't move: the Super Guarantee stayed at 12%

Worth stating plainly because it's a common point of confusion: the Super Guarantee rate did not change on 1 July 2026. It reached its final legislated step of 12% on 1 July 2025 and stays there. What is new for employers — including investors who run a business or employ staff — is payday super.

6. Payday super began for employers

From 1 July 2026, employers must ensure Super Guarantee contributions are received by an employee's fund within 7 business days of payday, rather than quarterly (20 business days for new starters). Late payment triggers a redesigned Super Guarantee Charge. This is now law (it received Royal Assent in November 2025), and the ATO has signalled a transitional grace period through 2026–27.

Why flag it in a property-investor guide? Because a large share of investors are also business owners, and payday super changes the timing of a fixed cost. Under the old quarterly system, an employer could hold super obligations for up to three months as de facto working capital; from 1 July 2026 that float disappears — super leaves the account within days of each pay run. If you were quietly relying on that quarterly lag to smooth cash flow (including to service investment-property holding costs), that buffer is gone. It also raises the stakes on getting super right: the new SG Charge for late payment is designed to be harder to wear than the old one. Investors who employ staff should confirm their payroll system is set up to remit on payday and rebuild any cash-flow assumptions that leaned on the old timing.

Part 2 — Now Legislated and Counting Down

Here is where most of the headline anxiety belongs — and where the timing is routinely misreported. Two major reforms are now law (they passed Parliament in late June 2026), but neither took effect on 1 July 2026. Understanding the exact commencement dates and grandfathering is where real money is won and lost this year.

7. Negative gearing and CGT reform — effective 1 July 2027, with a 12 May 2026 cut-off

What the reform does, from 1 July 2027:

• Negative gearing quarantining. Net rental losses on established (not new) residential dwellings acquired after 7:30pm AEST on 12 May 2026 (Budget night) will no longer be deductible against wages or other income. Instead, losses can only offset other residential rental income or be carried forward against future residential capital gains.
• CGT method change. For resident individuals and trusts, the 50% CGT discount is replaced by CPI cost-base indexation plus a 30% minimum tax on net capital gains. Companies, super funds, and foreign/temporary residents are not subject to the new individual method.
• A “deemed disposal” locks in the old rules. For assets held before 1 July 2027, a deemed disposal immediately before that date crystallises gains under the existing 50% discount, so pre-1-July-2027 growth keeps the more generous treatment.

Two grandfathering lines are critical:

1. Anything you already owned before 7:30pm on 12 May 2026 is fully grandfathered — it keeps unlimited negative gearing.
2. New (not established) dwellings are carved out of the negative-gearing change — a deliberate nudge toward investment that adds to supply.

And for SMSF investors specifically: complying super funds keep their existing 33⅓% CGT discount and are exempt from the negative-gearing quarantining. The reform is aimed at individuals and trusts, not funds.

The practical upshot for 2026–27: this is effectively the last full financial year under the current negative-gearing and CGT rules for new purchases, and the 12 May 2026 acquisition line already divides the market into “grandfathered” and “new regime” assets. If you're weighing an established rental versus a new dwelling, or an individual versus a trust or fund structure, the after-tax maths now diverges sharply from 1 July 2027. We model the structural choices here: Negative Gearing & CGT Discount Changes: What Australian Investors Should Do and the post-reform strategy playbook here: Post-Budget 2026 Property Investment Strategies.

8. The ban on new SMSF residential property loans — commences ~10 August 2026

From commencement, SMSFs can no longer enter new limited recourse borrowing arrangements (LRBAs) to buy residential property. The mechanism inserts a condition into section 67A(2) of the SIS Act 1993 requiring the borrowed-against asset to be business real property — which residential property fails.

The important nuances:

• Existing residential LRBAs are grandfathered — fully protected, including the ability to refinance to a new lender with no time limit.
• Business real property LRBAs remain available — commercial and industrial premises used wholly and exclusively in a business are unaffected.
• The trigger is contract exchange, not settlement. If your SMSF exchanges contracts before commencement (~10 August 2026), the arrangement is protected even if settlement happens later.
• Buying residential property with fund cash is unaffected. The ban is on borrowing, not on residential ownership inside super.

So for SMSF trustees mid-way through setting up a geared residential purchase, there is a genuine — but rapidly closing — window. Our full deep-dive on who's exempt, the transitional rules, and what to do if you're mid-purchase is here: SMSF Residential Property Borrowing Banned: Your Closing Window. If you're weighing SMSF property structures generally, see SMSF Borrowing & LRBA Strategies 2026.

Part 3 — State Land Tax and Duties in 2026

Land tax is assessed by the states — VIC and NSW on a calendar-year basis (ownership at 31 December), QLD/SA/WA/TAS on a financial-year basis (ownership at 30 June) — so 2026 settings matter regardless of the federal financial year. The headline: the biggest 2026 land-tax story is embedded surcharges and frozen thresholds quietly lifting holding costs, not big new rate hikes — but there are a few genuinely-new items worth knowing.

Victoria. The temporary COVID Debt land tax levy continues (legislated through to 30 June 2033): the general tax-free threshold stays cut to $50,000 (from $300,000), with flat surcharges of $500 on holdings of $50,000–$100,000, $975 on $100,000–$300,000, and $975 plus an extra 0.10 percentage point on the marginal rate above $300,000. This is why so many Victorian investors now pay land tax on holdings that once fell under the threshold. The absentee owner surcharge stays at 4%, and the 2026 Victorian Budget announced no changes to the Foreign Purchaser Additional Duty, Absentee Owner Surcharge, Vacant Residential Land Tax or Windfall Gains Tax.

New South Wales. Land-tax thresholds remain frozen — the general threshold at $1,075,000 and the premium threshold at $6,571,000 — because indexation was removed from the 2025 land-tax year onward (a freeze the Treasurer is due to review by 1 June 2027). A frozen threshold while land values keep rising means steady bracket creep: more investors dragged into land tax, and further up the scale, each year. The foreign owner surcharge land tax is 5%. Two genuinely-new 2026 items: from the 2026 land-tax year, occupants must collectively hold at least a 25% ownership interest to claim the principal-place-of-residence exemption (transitional protection for existing claimants expires in 2026) — relevant to co-ownership and part-owner-occupier structures; and from 1 July 2026 the 9% foreign surcharge purchaser duty is waived for eligible build-to-rent and retirement projects of more than 50 dwellings.

Queensland. Individuals are liable from $600,000 of taxable land value (companies/trustees from $350,000), and the foreign surcharge land tax is 3% on the value above $350,000. A new administrative exemption (from a mid-December 2025 public ruling) removes the foreign surcharge for certain “significant contributor” commercial landowners, applying to liabilities arising on or after 30 June 2026.

South Australia. SA indexes its threshold annually, and the general threshold rose to $833,000 for 2025-26 (up from $732,000) — a rare piece of genuine relief. Rates run from 0.5% above the threshold to a top marginal rate of 2.4%, with a 0.5% surcharge on most trust-held land. SA has no land-tax foreign surcharge (its 7% foreign surcharge applies to conveyance duty, not land tax).

Western Australia. Threshold $300,000, scaling up through the bands, plus the 0.14% Metropolitan Region Improvement Tax above $300,000. Importantly, WA has no foreign-owner land-tax surcharge (a point some secondary sources get wrong). WA's 7 May 2026 Housing Taxation Package made no land-tax changes — it lifted first-home duty concession thresholds and added a foreign transfer-duty exemption for build-to-sell developments.

Tasmania and the ACT. Tasmania's land tax kicks in above $125,000 (top rate 1.5% above $500,000) with a 2% Foreign Investor Land Tax Surcharge. The ACT levies land tax on all rented investment properties (no threshold — a fixed charge plus valuation-based rates) plus a 0.75% foreign-ownership surcharge.

Foreign investor rules

Because they shape competition at the entry level: the ban on foreign persons buying established dwellings, in force since 1 April 2025, was extended in the 2026–27 Budget to 30 June 2029 (the older “to 31 March 2027” framing is now outdated). Purchases that clearly add supply — new/near-new dwellings, vacant land for development, or redevelopment adding at least 20 dwellings — are not caught. Foreign purchaser stamp-duty surcharges remain high — NSW 9%, VIC 8%, QLD 8%, TAS 8%, SA 7%, WA 7%, ACT none — and the annual vacancy fee, doubled for vacancy years from 9 April 2024 (to roughly double the foreign-investment application fee), still applies to foreign-owned dwellings left empty or not genuinely available to rent for more than 183 days a year.

Part 4 — What Did Not Change (and What Investors Wrongly Think Did)

Half of good planning is knowing what you can ignore. These are the things that stayed put on 1 July 2026, despite the noise:

• The CGT 50% discount is unchanged for 2026–27. It still applies to assets held 12 months or more. It is only replaced — for individuals and trusts — from 1 July 2027 (Part 2). If you sell in 2026–27, you use the current 50% discount.
• Negative gearing rules are unchanged for 2026–27. Nothing about deductibility changed on 1 July 2026. The quarantining begins 1 July 2027, and only for post-12-May-2026 purchases of established dwellings.
• Property depreciation rules are unchanged. Division 43 capital works remains 2.5% per year for eligible construction, and the post-9-May-2017 restriction on claiming depreciation for second-hand plant and equipment in residential rentals still applies. If you bought an established property, you generally still can't depreciate the previous owner's used assets — but a current depreciation schedule remains one of the highest-value non-cash deductions available. See Investment Property Depreciation Australia 2026: Complete Guide.
• The First Home Guarantee 5% deposit scheme is not new — it expanded on 1 October 2025 (income and place caps removed, no LMI, higher price caps). It's been live for nine months and is worth understanding as an investor because it materially increases competition at the entry-level price points. See First Home Buyer Guarantee 2026: Investor Guide.
• The universal federal energy bill rebate ended 31 December 2025 and was not extended into 2026–27 — a small holding-cost creep for owner-occupiers, and a cost-of-living pressure that continues to weigh on tenant budgets.
• The $20,000 instant asset write-off is not confirmed for 2026–27. The Budget flagged making it permanent, but that measure sits in the Tax Reform No. 2 Bill 2026, which is not yet law; absent passage it reverts to $1,000. In any case it applies to small businesses, not standard residential landlords.
• Lending rules and your borrowing capacity didn't change on 1 July either. Many investors equate a new financial year with new lending settings, but APRA's serviceability assessment buffer (still 3 percentage points above the loan rate) and the broad macroprudential settings were unchanged on 1 July 2026. What constrains borrowing capacity is the level of rates — a restrictive 4.35% cash rate — not a new rule. If your capacity feels tighter than in 2021, that's the rate environment, not a 1 July change. Model your number at today's rate, not the cuts the market hopes are coming: How Much Can I Borrow for an Investment Property?.

Key Dates for the 2026–27 Financial Year

The reforms are spread across three financial years, and the dates are where the money is. Pin these:

Part 5 — Your 1 July 2026 Action Plan, by Investor Type

The changes hit different investors very differently. Find yourself below.

The buy-and-hold investor with existing properties

You are in the most comfortable position. Everything you already own is grandfathered from the negative-gearing and CGT reform, your properties keep unlimited gearing and the 50% discount on pre-1-July-2027 growth, and nothing about your existing structure changed on 1 July 2026. Your to-do list is mostly maintenance: re-run your holding-cost model on current land values (land-tax bracket creep is real, especially VIC/NSW), make sure your depreciation schedule is current, and — in a softer, restrictive-rate market — review any fixed-rate loans rolling off and your overall portfolio LVR buffer so a further price dip in Sydney or Melbourne doesn't push you into a tight equity position. The one thing not to do is sell a grandfathered asset without a strong reason: that grandfathering (unlimited gearing plus the 50% discount to 30 June 2027) is a genuinely valuable, non-transferable feature you can't buy back on a new purchase.

The investor about to buy in 2026–27

The 12 May 2026 line already matters. An established dwelling you buy now will fall under the new negative-gearing quarantining from 1 July 2027; a new dwelling is carved out. That doesn't make new-build automatically better — yields, depreciation, developer margin and location still dominate the decision — but the after-tax comparison has shifted. Model both. Our new-vs-established analysis under the reform is here: New Build vs Established: Post-Budget NG Carve-Out Modelling.

There's a timing dimension too. The two-largest-capital downturn means buyers currently hold more negotiating power in Sydney and Melbourne than at any point since 2022 — softer prices, more stock, longer days on market. If you're going to buy an established dwelling under the new gearing rules anyway, buying it at a genuine discount in a buyer's market partly offsets the loss of the salary-offset benefit. The trade-off to weigh is a lower entry price now (with the new gearing regime from 2027) versus waiting for rate cuts that most forecasters expect to firm the market in 2027.

The high-income investor

The 15% bottom-bracket cut is marginal for you; the bigger levers are the $32,500 concessional cap (more room to deduct in a high-income or sale year) and, if your balance is heading toward $3M, Division 296 planning. If you're near the threshold, model the cost-base reset election and whether balance equalisation with a spouse (using the higher $130,000 non-concessional cap and bring-forward) reduces the household's exposure. Two further points matter for high-marginal-rate investors specifically. First, because the negative-gearing benefit scales with your marginal rate, you have the most to lose from the 2027 quarantining on any new established purchases — which sharpens the case for either buying before you'd otherwise planned, choosing new stock, or holding through a structure the reform treats differently. Second, if you're planning a large capital gain, 2026–27 and the year to 30 June 2027 are the last windows to realise gains under the current 50% discount as an individual; the deemed disposal then locks in that treatment for gains accrued to date. Sequencing a sale, a deductible super contribution and the timing of the gain across these years is where a good adviser earns their fee.

The trust- or company-structured investor

Structure choice just became more consequential. The new CGT method (indexation plus a 30% minimum tax from 1 July 2027) applies to resident individuals and trusts — but not companies. That doesn't make a company automatically better: companies never got the 50% discount in the first place, they carry their own compliance and Div 7A complexities, and getting appreciated property out of a company is expensive. But for some investors the relative attractiveness of holding structures shifts from 1 July 2027, and the negative-gearing quarantining applies to trusts too. If you're setting up a new structure this financial year, model it on the post-reform rules, not today's — and get structuring advice before you buy, because unwinding later triggers duty and CGT.

The SMSF trustee

Three things changed under you: the contribution caps and $2.1M transfer balance cap rose, Division 296 commenced (first measured 30 June 2027 — get the cost-base election modelled before your 2026–27 return), and the residential LRBA ban commences ~10 August 2026. If your fund is mid-way through a geared residential purchase, the trigger is contract exchange before commencement — talk to your adviser now, not in August. If you're using the fund for commercial or business real property, borrowing is unaffected. And remember the fund's relative advantages widened under the reform: SMSFs keep the 33⅓% CGT discount and are exempt from negative-gearing quarantining, so for the right investor the fund becomes a comparatively more attractive long-term hold — subject to the new borrowing constraint. Explore the SMSF route properly: SMSF Property Investment services and the tax detail in SMSF Property Tax Implications 2026.

The first-time investor

Don't over-index on the reform headlines: the rules for anything you buy in 2026–27 are the current rules until 1 July 2027, and even then the changes only quarantine losses on newly-acquired established dwellings. Focus on fundamentals — deposit, borrowing capacity, yield and location — and understand two cross-currents. First, the entry-level market is more competitive because of the expanded 5% deposit scheme (no income or place caps, higher price caps, no LMI), which puts more first-home buyers into the same price brackets many first-time investors shop in. Second, borrowing capacity is still constrained by the restrictive 4.35% cash rate and APRA's serviceability buffer, so the amount you can borrow is well below what the same income supported in 2021. The upside: with Sydney and Melbourne softening, a patient, well-prepared first buyer has more choice and negotiating room than in years — provided the numbers still stack up at today's rates, not the cheaper rates everyone hopes are coming. Get your finance sorted first: How Much Can I Borrow for an Investment Property?.

How the Changes Interact: Three Case Studies

Rules land one at a time; real portfolios feel them all at once. Three composite examples (illustrative, not advice) show how the 2026 changes combine.

Still Unsettled: What to Watch This Financial Year

Not everything is locked. Several items that could affect investors in 2026–27 are still moving, and it pays to track them rather than assume:

• Legislative instruments for the negative-gearing/CGT reform. The Act passed, but some apportionment and definitional detail is deferred to legislative instruments that were not yet released at the time of writing. Exactly how carried-forward residential losses and the deemed disposal are calculated in edge cases may be refined before 1 July 2027.
• The $20,000 instant asset write-off. The Budget flagged making it permanent for small businesses, but it sits in the Tax Reform No. 2 Bill 2026, which is not yet law. If it doesn't pass, the threshold reverts to $1,000. This matters only to investors who genuinely run a business, not to standard residential landlords.
• The RBA cash rate. The cash rate sat at a restrictive 4.35% through mid-2026, and the timing of the first cut is the single biggest swing factor for both prices and borrowing capacity. Every softening-market forecast keys the recovery to rate cuts in 2027 — watch each RBA decision and the quarterly Statement on Monetary Policy.
• State budgets and land-tax settings. State revenue measures can change with each budget cycle. NSW's threshold freeze is subject to a review due by 1 June 2027, and Victoria's COVID-debt levy is legislated (for now) to 30 June 2033 — but state land-tax policy is where surprise holding-cost increases most often originate.
• Division 296 administration. The ATO is still publishing guidance on how earnings, the cost-base election and defined-benefit interests are calculated. High-balance trustees should watch for ATO updates before finalising the irrevocable election.

Frequently Asked Questions

Your New-Financial-Year Checklist

If you do nothing else after reading this, work through these eight points with your adviser:

1. Re-run your holding-cost model on current land values. Land-tax bracket creep (especially VIC and NSW) means your annual cost may be higher than you assume — and it's deductible, so get it right.
2. Reset your super contribution plan to the new caps ($32,500 concessional, $130,000 non-concessional), and check carry-forward eligibility if you have a large-income or property-sale year ahead.
3. If your super balance is near or above $3M, model Division 296 — including whether the one-off cost-base reset election helps, and whether balance equalisation with a spouse reduces household exposure. Don't finalise the irrevocable election until the ATO guidance you rely on is final.
4. Know which side of 12 May 2026 your purchases sit on. Anything bought before Budget night is grandfathered; established dwellings bought after are under the new negative-gearing regime from 1 July 2027.
5. If you're buying, model established-vs-new on post-1-July-2027 rules, not today's — the new-dwelling carve-out changes the after-tax comparison.
6. If your SMSF wants to borrow for residential property, act before ~10 August 2026 — the trigger is contract exchange, not settlement.
7. Commission or refresh your depreciation schedule. The rules didn't change, but it remains one of the highest-value non-cash deductions and it's frequently left on the table.
8. If you employ staff, confirm payday-super compliance and rebuild any cash-flow assumptions that relied on the old quarterly timing.

The Bottom Line

For most existing property investors, 1 July 2026 changed less than the headlines suggest — your holdings are grandfathered, negative gearing and the 50% CGT discount are intact for this financial year, and the real super changes are contribution caps and a new tax that only bites well above $3 million. The genuine action items are concentrated among high-balance SMSF trustees (Division 296, the cost-base election, and the residential borrowing ban) and anyone buying before 1 July 2027 (the 12 May 2026 grandfathering line). The smartest move this financial year isn't to react to a change that already happened — it's to position deliberately for the negative-gearing and CGT reform that's now firmly on the clock.

Sources

• Australian Taxation Office — Key superannuation rates and thresholds (contributions caps, transfer balance cap, super guarantee)
• Australian Taxation Office — “Better Targeted Super Concessions is now law” (Division 296); Payday superannuation
• Australian Taxation Office — Tax reform: negative gearing and capital gains tax; Tax rates for Australian residents; Depreciating assets in rental properties
• Treasury / Parliament of Australia — Treasury Laws Amendment (Tax Reform No. 1) Act 2026; Treasurer's second-reading speech
• Federal Register of Legislation — Treasury Laws Amendment (Payday Superannuation) Act 2025
• State Revenue Office Victoria; Revenue NSW; Queensland Revenue Office; RevenueSA; RevenueWA / WA Treasury; State Revenue Office Tasmania; ACT Revenue Office — 2026 land tax thresholds and surcharges
• Australian Taxation Office / FIRB — banning foreign purchases of established dwellings; vacancy fee for foreign owners
• firsthomebuyers.gov.au — Australian Government 5% Deposit Scheme