Issue #2 — 18 May 2026

Three policy changes every Australian property investor needs to understand right now

There are three policy changes moving through Canberra right now that will affect every property investor in Australia. One is already law. Two are proposed but not yet passed. All three are worth understanding before you make any decisions this financial year.

Policy 1

Tax brackets

Law

Already law — starts 1 July 2026

If your total taxable income sits between $18,201 and $45,000, the rate on that band drops from 16% to 15% on 1 July 2026, then to 14% on 1 July 2027. This applies to retirees on rental income, part-time workers, or investors running heavily negative-geared properties where deductions push total taxable income into this range. If you have a full-time salary above $45K, this change doesn't touch you — you're already in a higher bracket before rental income is counted. The higher-income changes ($135K and $190K thresholds) were part of the 2024 Stage 3 reforms and are already in effect.

What to do

If you ran an Estait report before 13 May 2026, rerun it. The projection engine has already been updated with the 2026-27 brackets.

Policy 2

Negative gearing

Proposed

Proposed — Senate not yet passed

From 1 July 2027, negative gearing would only apply to new builds. If you buy an established property after the law passes, you would no longer be able to claim rental losses against your other income. Existing properties would be grandfathered — if you already own the property when the law passes, your negative gearing entitlement stays intact.

What to do

If you are planning to buy an established investment property in the next 12–18 months, time matters. Buy before this passes and you keep the deduction. Buy after and you don't. Estait does not model this until it is legislated.

Policy 3

Capital gains tax

Proposed

Proposed — Senate not yet passed

The current rule: if you hold a property for more than 12 months and sell, you only pay CGT on 50% of the gain. The proposal: replace the 50% discount with a choice between indexation (adjusting your cost base for inflation) or a 30% flat discount — whichever is better for you. For most investors in most scenarios, selling after this law passes will cost more in tax. Transitional rules mean gains accrued before 1 July 2027 would still be assessed under the existing 50% discount. For new residential properties specifically, investors keep a choice between the 50% discount and the new method — a carve-out designed to maintain the incentive for new housing supply.

What to do

Also not passed the Senate. Estait will update its projections the day it is legislated.

Where the signals are this week

Suburb #1

Cannington, WA

5.3% yield

Median price	$771,000
Gross yield	5.3%
Vacancy rate	0.9%
Days on market	18 days
1-yr price growth	+22.4%

Tax brackets

An investor on $100K salary sits in the 30% band ($45K–$135K under the post-2024 schedule). The July 2026 change only moves the lower band ($18K–$45K) from 16% to 15%. The tax benefit applies mainly for investors who are heavily negative-geared and whose deductions pull total taxable income below $45K.

Negative gearing

Cannington is established stock. At 5.3% gross yield, many investors will be near-neutral — so NG matters less here than on a low-yield purchase. But the grandfathering angle is real: buy before the law passes, keep the deduction regardless.

CGT

Perth's growth rates mean capital gains will be substantial. A 30% flat discount instead of 50% is a meaningful difference on a $300K+ gain. Factor your exit timeline into the decision from day one.

Run a full brief at estait.com.au →

Suburb #2

Smithfield, SA

4.4% yield

Median price	$614,562
Gross yield	4.4%
Vacancy rate	0.8%
Days on market	20 days
1-yr price growth	+14.1%

Tax brackets

The July 2026 change moves the $18K–$45K band from 16% to 15% — around $268 per year on the full band, and another $268 when it drops to 14% in 2027. This matters most for investors whose deductions bring total taxable income into that range.

Negative gearing

At 4.4% gross yield, a leveraged purchase is mildly negatively geared in early years — interest on an 80% LVR loan (~$491K at 6%) runs about $29K/year against ~$27K gross rent. The NG loss is smaller than a low-yield purchase, so these properties are relatively better positioned if the law passes.

CGT

14% annual growth is strong. Plan your exit timeline before the law changes, not after.

Run a full brief at estait.com.au →

Suburb #3

Bridgewater, TAS

4.9% yield

Median price	$504,539
Gross yield	4.9%
Vacancy rate	1.8%
Days on market	35 days
1-yr price growth	+16.0%

Tax brackets

At $504K with an 80% LVR mortgage, interest (~$24K/year) brings the net rental position close to neutral. For an investor whose total taxable income lands in the $18K–$45K band, the 16% → 15% cut from July 2026 applies — around $268/year.

Negative gearing

Interest of ~$24K–$26K against gross rent of ~$24,700 means this property sits at neutral to mildly negative in early years. NG matters here. Buying before the law passes locks in the grandfathered deduction — a reason to move sooner rather than later.

CGT

For most realistic scenarios, the proposed CGT change results in a higher tax bill than the current 50% discount. The transitional rules provide some cushion — only post-July 2027 gains are affected.

Run a full brief at estait.com.au →

The tax bracket changes are legislated and in force from 1 July 2026. Negative gearing and CGT changes are proposals that have not passed the Senate — Estait will update its projections the day either becomes law. None of this is financial advice — speak to your accountant before making investment decisions.

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