2026 Budget Q&A: Negative Gearing, CGT and New Builds Answered

The 2026 Federal Budget changed the rules for every Australian property investor. The questions coming in from the Follio audience after Budget night were immediate and specific. Reece Beddall and Lachlan Delahunty answer the most important ones directly, covering negative gearing, capital gains tax changes, new build strategy, and how investors at different portfolio stages should be thinking about what comes next.

Does Negative Gearing Still Work on New Builds?

The Budget changes removed negative gearing for established property purchases made after Budget night. New construction is treated differently. Negative gearing remains available on new builds under the current framework, creating a structural incentive shift toward new construction that will affect both the investment landscape and the supply pipeline over the next two to three years.

The catch: new construction in a high-cost environment carries its own risks. Land value, builder quality, construction timelines, and contract protections matter more when negative gearing is the primary driver of a decision. Reece and Lachlan examine when new build strategy is genuinely viable and when it is being used to justify an asset that would not otherwise stack up.

How the CGT Changes Affect Existing Investors

The capital gains tax adjustments alter the discount available on investment property held for more than 12 months. For investors holding multiple properties with varying acquisition dates, understanding the sequencing of any sales is now more important than it was before the Budget. The after-tax return on a sale made in the next 12 months looks different to a sale made in 24 months under the new framework.

Should Existing Investors Sell Before the Rules Bed In?

This is the most common question from the Follio audience after the Budget. The answer is asset-specific. Properties in markets with genuine growth momentum, held on grandfathered negative gearing terms, are worth keeping. Properties in markets that were already underperforming and were being held primarily for the tax benefit now have a weaker case. Reece and Lachlan work through the criteria for making that call clearly.

Published: 14 May 2026