Negative Gearing Just Changed. Here's Why New Developments Now Have the Edge.
The goalposts just moved. And for once, they moved in your favour.
In the 2026-27 Federal Budget, the government did something it has been too nervous to touch for 25 years: it reformed negative gearing and capital gains tax. It passed both houses and received royal assent on 26 June 2026. It is law, effective 1 July 2027.
If you believe my facebook feed, it all seems very doom and gloom. Reduced borrowing power with increased interest rates, lower auction clearance rates and property prices. But if you are developing or selling new builds, I view this as an opportunity.
What actually changed
From 1 July 2027, the tax system splits property investors into 2 camps: those buying established homes, and those buying new builds. And it is not a subtle difference.
The 2027 tax split: established vs new builds
For residential property bought after 7:30pm, 12 May 2026. Changes apply from 1 July 2027.
New builds keep both of the biggest tax incentives in Australian property. Established homes lose both.
The 50% CGT discount is being scrapped almost everywhere from 1 July 2027, even on shares and managed funds. New residential dwellings are one of the only things left standing that keep it. (Anything owned before budget night is grandfathered too, so existing investors are protected.)
The current Labor government treasury modelling expects the changes to nudge around 75,000 more Australians into home ownership over the next decade. Plus steer investor money towards new construction. In other words, the tax system is now quietly pointing investors straight at your product.
The tax bill on a $500,000 gain: established vs new build
Estimated capital gains tax payable when you sell, for a top-rate investor. Illustrative example only.
- Bought after 1 July 2027 for $1,000,000, sold for $1,500,000 (a $500,000 gain)
- Inflation 2.5% a year, giving the established property an indexed taxable gain of about $368,600
- The new build keeps the 50% discount, so its taxable gain is $250,000
- Top marginal tax rate of 47% (including the Medicare levy)
The market is already moving
According to Cotality (the property data firm formerly known as CoreLogic), national home values fell 0.4% in June 2026. That is the biggest monthly drop since December 2022, and the third fall in a row. The softening is sharpest at the premium end, where upper-quartile values slid 3.2% over three months as some investors offloaded established stock ahead of the changes.
To be fair, the reform isn’t the only thing at play. An increasing cash rate and cautious buyers are doing plenty of the work too. But here is the telling part: the cooling is concentrated in exactly the segment the new rules disadvantage, the established investor market. New builds sit on the other side of that line.
And closer to home, South East Queensland has held up better than the southern capitals, with Brisbane still growing while Sydney and Melbourne slipped. A resilient region, plus a tax system that now favours new stock.
Why this is a branding opportunity, not just a tax one
A tax advantage only works if buyers actually understand it and feel it. You can have the best-positioned new-build estate in the corridor, but if your marketing looks like every other patch of dirt with a sign out front, you are still competing on price. And price is a race to the bottom.
Think about what an investor is weighing up now:
The head reason: "This new build keeps negative gearing + the CGT discount. The established one down the road doesn’t."
The heart reason: "I can picture the lifestyle here. This feels like a place people will want to live."
The tax edge is your rational hook. Your brand is what makes buyers feel it, remember it, and act on it.
What smart developers and agencies should do now
Making the advantage impossible to miss is a logical move. Here’s a quick checklist:
Lead with "new build" as a genuine selling point, not fine print
Weave the tax advantage into your brand story and sales collateral, clearly, and as general information rather than advice
Make sure your estate's identity sells the lifestyle, so you are not competing on price alone
Get your signage, brochures and website all telling one consistent story
Move now, while the shift is fresh and buyers are paying attention
The window where this feels new and newsworthy will not last forever. The developments that own the story early will own the corridor.
The takeaway
The rules changed and new builds have come out on top. What will you do with this opportunity?
If you have a new development coming across Moreton Bay, the Fraser Coast or the Gold Coast, let's make sure it is branded to make the most of its moment. From overlooked to unmissable. ❤️
Book a Groundwork strategy session or see how I work with you on the Land Development Branding page.
A quick note: this is general information to help you think about your marketing, not tax or financial advice. The finer details of what counts as an eligible "new build" are still being confirmed, so always point buyers to their own accountant or adviser.
