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2027 Tax Reform Calculator

Model what an investment property looks like under the old rules versus the new negative gearing and CGT regime announced in the 12 May 2026 federal budget.

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Our interpretation - not final law - not financial advice
This calculator reflects our best interpretation of the 12 May 2026 federal budget, not financial advice. The budget paper is explicit about CGT timing - gains accrued before 1 July 2027 keep the 50% discount. It is NOT explicit about when the negative gearing change takes effect for properties acquired after Budget night, and we have applied the conservative interpretation. Numbers will shift once Treasury releases legislation and the ATO issues guidance. Treat these results as a directional indicator only, not gospel. This is an ongoing conversation.
The bottom line for property investors

Compare what an investment property looks like under the old rules vs the new negative gearing and CGT regime.

Surprise, surprise: you're worse off in almost every scenario when you buy a new build (even with the negative gearing benefits still attached).
A · Old rules (baseline)Buy established pre-12 May 2026
$0
Net after-tax profit over hold
Baseline
Negative gearing saved during hold$0
CGT paid at sale$0
Sale price$0
B · New rules, establishedBuy established post-12 May 2026
$0
Net after-tax profit over hold
--
Negative gearing saved during hold$0
CGT paid at sale$0
Sale price$0
C · New rules, new buildBuy new build post-12 May 2026
$0
Net after-tax profit over hold
--
Negative gearing saved during hold$0
CGT paid at sale$0
Sale price$0
iHover over any number above to see exactly how it's calculated.
Major changes reflecting the Federal Budget delivered 12 May 2026
  • The 50% CGT discount is replaced by cost base indexation with a 30% minimum tax on gains from 1 July 2027.
  • Negative gearing on established residential property is limited to losses against rental income only - no longer deductible against wages.
  • New builds keep both negative gearing AND the choice of CGT method (old 50% discount or new indexation, whichever is lower).

Same property, three scenarios

All figures are total dollars across the full hold period, in today's money, after tax. Initial deposit is treated as an outflow and returned at sale.

  Scenario AEstablished
old rules		 Scenario BEstablished
new rules		 Scenario CNew build
new rules
Rental income (total) $0$0$0
Holding costs (total) $0$0$0
Negative gearing tax saving on wages $0$0$0
Sale price at end of hold $0$0$0
CGT payable on exit $0$0$0
Net after-tax profit $0$0$0
If you buy established now vs under old rules
$0
worse off over the hold period
If you buy a new build vs established (new rules)
$0
new build advantage

Where the numbers come from

Pick a comparison and see the full mechanics side by side. Two levers drive every difference: when you get the negative gearing benefit, and how the eventual capital gain is taxed.

Where it really hurts: try these scenarios

Click any scenario to apply those inputs and watch the calculator update. The deltas shown on each card are what your current inputs would look like under that stressed assumption.

So what do these numbers actually mean?

Bottom line

What we've assumed

This is a directional indicator built on our best read of the 12 May 2026 budget. The actual mechanics will be finalised when the legislation passes and the ATO issues guidance. Until then, here's what's baked in.

CPI-based cost base indexation
Cost base is indexed up using annual CPI compounded over the hold, mirroring the pre-1999 CGT indexation system. The new regime is expected to follow the same approach but the exact ATO index reference has not been published.
Transitional CGT split is modelled
For Scenario B, we split the gain at the end of Year 1 (representing the 1 July 2027 cutover). The pre-cutover slice gets the old 50% discount; the post-cutover slice gets cost base indexation + 30% min tax. We use a valuation-at-cutover methodology (the property is "deemed disposed" at Y1 value, then re-acquired at that value for the new regime). Treasury could legislate time-apportionment instead, which would give different numbers. The "first-year growth" input lets you model a Darwin-style boom in this window where the favourable treatment really matters.
No cap on carry-forward losses
Carried losses can fully offset future rental income and eventual CGT on residential property sale. If Parliament adds a cap, Scenario B numbers shift.
Stamp duty at a flat 5.5%
Actual stamp duty varies by state, property type and buyer status. New build off-the-plan concessions and first home buyer discounts are not modelled.
Budget not yet law
The 12 May 2026 budget announcement still has to pass Parliament. Final legislation may amend the mechanics, the start date, or add carve-outs we don't yet know about.
Interest-only loan structure
Loan balance stays constant for the full hold. Interest costs do not decline as they would under principal and interest repayments.
Treat these numbers as directional, not gospel. They are our best read of the announced mechanics. Use the calculator to understand the shape of the impact, then book a discovery call to walk through what it means for your specific situation.
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How this calculator works. Scenario A models what you would have received under the pre-Budget rules (full negative gearing against wages, 50% CGT discount). Scenario B models an established property bought after 12 May 2026 under the new rules (rental losses ringfenced to rental income or eventual property CGT, CGT computed via cost base indexation with a 30% minimum rate floor on net gains from 1 July 2027). Scenario C models a new build bought after Budget night under the new rules (full negative gearing retained, investor chooses the better of old or new CGT method at sale).

Assumptions baked in: stamp duty 5.5% of purchase, acquisition costs 2%, selling costs 2.5%, vacancy 2 weeks per year, property management 7% of rent, other holding costs (rates, insurance, repairs, body corporate) $4,000 per year indexed to CPI, interest-only loan with constant balance. Depreciation is treated as a flat annual deduction for the full hold period. This is an illustrative tool, not financial advice. The Tax Reform package legislating these changes is subject to Parliamentary passage and final ATO guidance.