What happened
New modeling analysing 920,000 Australian residential property sales reveals that 53% of investments would pay more tax under federal reforms scheduled for July 1, 2027. The rules prevent negatively geared rental losses from offsetting non-investment income, replace the 50% CGT discount with an inflation-based deduction, and impose a 30% minimum CGT rate. High-growth properties face average CGT increases equal to 11% of purchase prices.
Why it matters here
For property investors and retirees, the proposed shift from tax-sheltered income to inflation-adjusted capital gains changes portfolio economics. Lower-growth investments may see improved after-tax outcomes, while highly leveraged, high-capital-growth residential assets will face larger tax liabilities upon sale. Australian investors need to evaluate long-term post-tax cash flows under the new framework well before the 2027 start date.
What to watch
Watch for further legislative debate, parliamentary amendments, and Treasury draft guidelines as the federal government prepares for the July 1, 2027 implementation of housing tax changes.
Source
propertyupdate.com.au