How the 2026–27 Federal Budget changes the tax on property, shares, gold, silver and super — and what it means for your money
Federal Budget 2026–27
Understand the rules. Get ahead.
Australian Federal Budget · 2026–27
The rules just changed. Where should your money go?
The 2026–27 Budget brought the biggest shake-up to investment tax in decades. This guide explains every change in plain English — then shows you, dollar for dollar, what $200,000 could grow into across six ways to invest, including the one structure the Budget left completely alone: a Self-Managed Super Fund (SMSF).
Negative gearing → new builds only 50% CGT discount replaced Super & SMSFs stay exempt Small income tax cut
Choose how much detail you want:
Read this first
Nothing happens overnight. The big rules don't start until 1 July 2027. Anything you already owned before 7:30pm on Budget night (12 May 2026) keeps the old rules for good. So this is about future decisions — and you have time to plan.
The short version
Four changes. That's it.
Two make investing in your own name harder. One leaves super completely alone. One puts a little more in everyone's pocket.
1. Negative gearing → new builds only
Buy a second-hand (established) rental in your own name that loses money? From mid-2027 you can no longer use that loss to cut the tax on your salary. The loss is "parked" until that property (or another rental you own) makes money.
Brand-new builds keep the perk. So does super.
2. No more "tax only half the profit"
The 50% capital-gains discount ends for individuals, trusts and partnerships — on all assets, including shares. Instead, your purchase price is lifted by inflation first, and you're taxed only on the real profit left over — at a rate of at least 30%.
3. Super & SMSFs left untouched
Treasury explicitly excluded super funds (including SMSFs). They keep every perk: 15% tax on income, ~10% on long-held gains, even 0% once you're drawing a retirement pension. The quiet winner of this Budget.
4. A small income tax cut
From 1 July 2026 the $18,201–$45,000 bracket dropped from 16% to 15% (and is legislated to fall to 14% from July 2027). Worth up to about $268 a year for anyone earning over $45,000.
Does this even affect you?
Find yourself in 10 seconds
Almost all the scary headlines only touch future purchases by individuals. One question decides everything.
? Did you already own (or were under contract for) your investment before 7:30pm, 12 May 2026?
Yes — you already owned it
You're grandfathered. The old rules follow that asset until you sell. Nothing to do.
No change
No — buying established property in your own name
This is exactly who the changes hit. You lose salary negative gearing and the 50% discount. How you own it now matters enormously.
Most affected
No — but buying a brand-new build
New builds keep both perks — the government protected them to encourage new housing supply.
Both perks kept
No — investing through an SMSF / super
Completely exempt from every change. The most tax-efficient option now — if it suits your situation.
Exempt & favoured
The bottom line
What $200,000 could become over 30 years
Every option starts with the same $200,000. For property it's the deposit on an $800k home (the bank lends the rest); for shares, gold and silver it's invested directly. Each line is the profit you'd actually pocket, after tax, loans and selling costs. The line sinking at the bottom is cash left idle, eaten by inflation. Hover any line, or tap a name in the legend to hide it.
Why the property lines look so big: property uses the bank's money. A $200k deposit controls an $800k home, so growth is amplified — and so are the losses if prices fall. Shares, gold and silver here are bought outright (no loan). Notice the SMSF property line steadily pulling clear of the other two: it's the same house, just taxed far more lightly. The only line heading down is cash — that's inflation quietly eroding money left idle.
Why "how you own it" beats everything
The same gain, taxed wildly differently
Take one long-held property gain for a high earner. The tax you actually pay depends almost entirely on the structure you hold it in.
SMSF (pension phase)
0%
SMSF (accumulation)
~10%
New build / grandfathered
~19.5%
Established (own name, post-2027)
up to ~39%
Effective tax on a long-held real gain for an investor on a 39% marginal rate (37% + 2% Medicare). SMSF accumulation = one-third discount taxed at 15% (≈10%); pension phase = tax-free up to the transfer balance cap. Established homes are taxed on the full real gain, with the 30% minimum applying once the marginal rate would otherwise fall below 30%.
In one breath
If you remember three things
Already invested? Relax.
You're grandfathered. None of the big changes touch what you already own.
Buying new? Structure is king.
Super/SMSF is now the most lightly taxed home for an investment. New builds beat established homes outside super.
Want the full picture?
Year-by-year charts for all six options, the indexation explainer, the new-build vs established vs SMSF fork, the risk breakdown, the true cost of holding cash, an interactive table and the complete timeline.
General information, not financial advice.
These figures are models built on historical averages and simplifying assumptions; real returns vary year to year and can be negative. The reforms are not yet law and could change as legislation passes Parliament. SMSFs carry strict rules, costs and access restrictions and aren't suitable for everyone. Tax depends on your personal situation. Talk to a licensed financial adviser and registered tax agent before acting.
Before anything else, find out whether you're in the firing line. Most of the alarming headlines only apply to future purchases by individuals. Find the card that sounds like you.
You already own your investment property
Owned (or under contract) before 7:30pm AEST, 12 May 2026? You're grandfathered. The old rules follow that property until you sell it. Nothing changes.
You plan to buy an established property in your own name
This is who the changes target. From 1 July 2027 you lose salary negative gearing and the 50% CGT discount. Read on — your ownership structure now matters enormously.
You're buying a brand-new build
New builds keep both perks. The government wants to encourage new housing supply, so it protected them.
You invest through super (incl. an SMSF)
Treasury explicitly excluded super funds from every change. Same generous rules as before — which quietly makes super the biggest relative winner of this Budget.
2
The whole Budget in 60 seconds
If you read nothing else, read this. Five things changed for investors — and the big ones don't start until 1 July 2027, so you have time to plan.
1
Negative gearing now only works on brand-new homes
Buy an established (second-hand) investment property and make a loss? From mid-2027 you can no longer subtract that loss from your salary. The loss is "quarantined" — usable only against your residential property income, including future rent or the eventual capital gain, with any excess carried forward. Buy a new build — or hold it inside super — and you can still deduct it against any income.
Big change
2
The "tax half your profit" deal is gone (for individuals)
The 50% capital gains discount is replaced for individuals, trusts and partnerships on all CGT assets — property and shares. Your purchase cost is lifted by inflation first (indexation), then you're taxed on the real gain that's left, with a minimum 30% rate so high earners can't time low-income years to pay almost nothing. Super funds keep their own discount.
Big change
3
Super and SMSFs were left completely alone
Complying super funds (including SMSFs) keep the one-third CGT discount, the 15% earnings rate, and normal negative gearing. The Budget papers explicitly excluded them.
Exempt
4
Anything you already own stays under the old rules
Owned (or under contract) before 7:30pm AEST, 12 May 2026? Grandfathered. The changes only bite on future purchases, and the CGT changes only on gains that accrue after 1 July 2027 (your gain up to that date keeps the 50% discount).
You're protected
5
Everyone got a small income tax cut
From 1 July 2026 the second bracket ($18,201–$45,000) dropped from 16% to 15% (legislated to fall to 14% from 1 July 2027). Worth up to about $268 a year now for anyone earning over $45,000.
In your favour
3
The timeline that actually matters
The dates are the whole game. One moment in the past decides who's protected; the future dates decide when each new rule switches on.
7:30pm AEST, 12 May 2026The line in the sand
Own a property (or be under contract) before this exact moment and you're grandfathered under the old rules for that asset, until you sell.
1 July 2026Income tax cut + Div 296 starts
Second bracket drops 16%→15%. Separately, "Division 296" (already law) adds an extra 15% tax on super earnings on the portion of a balance above $3M.
1 July 2027The big switch
Negative gearing limited to new builds. 50% CGT discount replaced by indexation + 30% minimum tax — but only on gains accruing from this date. Second bracket also drops 15%→14%.
1 July 2028Trusts follow
A 30% minimum tax on distributions from discretionary (family) trusts is legislated to begin, closing another income-splitting avenue.
4
The two "cheat codes" — and what happened to them
For 25 years, investors had two powerful tax advantages. Think of them as cheat codes in a video game. The 2026 Budget switched one off for second-hand homes held by individuals, and changed how the other is calculated for everyone — while leaving both fully intact inside super.
Cheat code #1 — Negative gearing
What it was: if your rental cost more to own (interest + bills) than the rent it earned, you could subtract that loss from your day-job salary and pay less income tax.
What changed: for established homes bought after Budget night, the loss is now "quarantined" — you can only offset it against your residential property income (including the eventual capital gain), and you carry any excess forward. New builds and super funds keep the cheat code.
Starts 1 July 2027
Cheat code #2 — The 50% CGT discount
What it was: when you sold a long-held asset for a profit, you were taxed on only half of it.
What changed: for individuals it's replaced on all assets (property and shares) — your cost is lifted by inflation first (indexation), and you're taxed on the real profit left over, with a 30% minimum rate. New builds can pick whichever method (old 50% or new indexation) is cheaper. Super keeps its own one-third discount.
Gains after 1 July 2027
Explain it like I'm 15: You buy a lemonade stand that loses money at first. Before: the government let you use that loss to pay less tax on your job's pocket money. Now: unless the stand is brand new (or owned by your "super piggy bank"), the loss just waits until that stand — or another lemonade stand you own — earns a profit. And when you finally sell, the government first asks "how much of your profit was just prices going up?", ignores that part, then taxes the real profit (at no less than 30%).
Who keeps which cheat code?
Salary negative gearingDiscount on the gainEffective CGT rate*
New build (individual) Keeps it Best of both~19.5%
Established (individual) Quarantined Real gain onlyup to ~39%
Property in an SMSF Keeps it 1/3 discount~10% → 0%
Already owned (grandfathered) Keeps it Keeps 50%~19.5%
*Effective rate on a long-held gain for a high earner (39% marginal). SMSF: ~10% in accumulation phase, 0% once the asset supports a retirement pension (up to the transfer balance cap).
See the difference: tax on a $400,000 real gain
Illustrative: a real (above-inflation) gain of $400,000 for an investor on a 47% marginal rate. New builds may keep the old 50% method; established homes are taxed on the full real gain; an SMSF in accumulation applies the one-third discount at 15%.
5
What "taxing the real gain" actually means
This is the part most people find confusing, so here it is as simply as possible. Inflation makes everything cost more over time — including the thing you bought. The new rules let you ignore that "fake" profit and only pay tax on the genuine gain above inflation.
$500,000You buy
$640,000Inflation-lifted cost (after 10 yrs at ~2.5%)
$820,000You sell
$180,000Real gain that gets taxed (not the full $320,000)
Why this can sometimes be better than the old 50% deal: it cuts both ways. If inflation was high or your gain was modest, the inflation-lifted cost can wipe out more than half your profit — so you pay less tax than under the old rules (and if your return barely beat inflation, possibly none). But if your gain was big and fast, you'll pay more. The 30% floor stops high earners using low-income years to pay almost nothing. (Inside an SMSF none of this applies — it just takes a flat one-third off the nominal gain and taxes the rest at 15%.)
6
Why the SMSF is the structure everyone's suddenly talking about
A Self-Managed Super Fund is simply your superannuation, run by you (up to six members), able to buy property, shares and metals directly. The 2026 Budget changed nothing about how it's taxed — and because it made things harder for individuals, the untouched SMSF rules now look dramatically better by comparison.
15%Tax on rent, dividends & interest inside the fund (vs up to 47% personally)
~10%Effective CGT on a long-held gain in accumulation phase (1/3 discount × 15%)
0%Tax on income and capital gains once the asset supports a retirement pension*
$30kConcessional (pre-tax) contributions cap per person per year (2025–26)
Explain it like I'm 15: Super is a special piggy bank for retirement. The government taxes money inside it very lightly because you can't touch it until you're older. The Budget made the outside-the-piggy-bank world harsher but didn't touch the piggy bank — so the same property earning the same profit can be taxed at ~10% (or eventually 0%) inside an SMSF instead of up to ~39% in your own name. On a big gain, that gap is hundreds of thousands of dollars.
It's powerful, but it's not for everyone. An SMSF only makes sense with a reasonable balance (advisers commonly cite roughly $200k–$400k+), a long horizon, and a willingness to handle compliance, an annual audit and trustee duties. You cannot live in an SMSF property or rent it to family, you generally can't access the money until retirement, borrowing rules are strict, and from 1 July 2026 Division 296 adds an extra 15% tax on earnings on the portion of a member's balance above $3 million. *Pension-phase 0% applies up to the transfer balance cap ($2.0M, rising to $2.1M from 1 July 2026). Get licensed advice before setting one up.
7
New build vs established vs SMSF — the single biggest property decision now
Same price. Same growth. Same rent. The only difference is which tax rules apply — and that gap compounds into hundreds of thousands of dollars over time.
New build Keeps both
Losses deductible against your salary
Choose old 50% discount or indexation — whichever is cheaper at sale
The government's favoured option (adds housing supply)
Must genuinely add a dwelling (off-the-plan, vacant-land build, or a knock-down rebuild that creates more dwellings)
Established Loses both
Losses cannot reduce salary tax — quarantined
No 50% discount — taxed on the full real gain
Losses carry forward against future residential property income & the eventual gain
Already owned before 12 May 2026? Fully grandfathered
Inside an SMSF Exempt
Negative gearing rules unchanged (offsets fund income)
Keeps the one-third CGT discount → ~10% effective
0% CGT & income once in pension phase
Can't live in it; locked until retirement; needs a decent balance
Same house, three tax outcomes — in-pocket profit
8
How we compare fairly
Before the big charts, here's the setup. Every option gets the same $200,000 to start and the same investor: a $150,000 salary, taxed under the 2026–27 brackets (top dollars at 37% + 2% Medicare = 39%). For property, the $200k is the deposit + costs on an $800,000 home (the bank lends the other $640,000). For shares, gold and silver, the full $200k is invested directly. The SMSF column holds the same leveraged $800k property, but under super's tax rules.
$150kInvestor salary (top $ taxed at 39% incl. Medicare)
Why the property numbers look huge: property uses the bank's money (leverage). Your $200k controls an $800k asset, so growth is amplified — but so is risk, and you pay interest the whole time. Shares, gold and silver here are unleveraged, the normal way most people hold them. It's not a perfectly like-for-like fight — it's a picture of how people actually invest.
9
What you actually walk away with
"In-pocket profit" = everything you end up with, minus the $200,000 you started with — after the loan is repaid, all tax is paid, and selling costs are out. Cash shows the opposite: doing nothing, where inflation quietly eats your money. Tap a holding period to switch.
Investment Comparison — $200,000 Starting Cash
—Top Performer
—Best In-Pocket Profit
—Cost of Doing Nothing
—Holding Period
SMSF Property—
New-Build Property—
Established Property—
ASX 200 Shares—
Gold—
Silver—
About the shares number — "reinvesting dividends": shares pay you cash dividends a few times a year. That's new money the companies hand you, separate from your original $200k. You can pocket it, or use it to buy more shares — and buying more shares is what makes the full ~9% compound. This model reinvests every dividend (after paying tax on it). Gold and silver pay nothing to reinvest, so their entire return is locked in the price — and isn't taxed until you sell, a quiet advantage for metals in a high tax bracket.
10
The full journey — all six options vs inflation
Here is every option's in-pocket profit growing year by year, from day one to year 30, with the cash-vs-inflation line dragging along the bottom. This is the single clearest picture of where leverage, compounding and tax all collide. Hover any line; toggle any series in the legend.
What to look for: the property lines launch fastest because of leverage, and the SMSF line pulls clear of the other two over time — same asset, just taxed far more lightly. Shares (dividends reinvested) and silver track each other and finish close, while gold pulls clear of both early. The cash line is the only one that goes down — that's inflation. Switch to the log scale to compare growth rates fairly: a straight line there means steady percentage growth.
11
The part the big numbers hide: risk, and the cost of "playing it safe"
A single "profit" number says nothing about how stomach-churning the journey is. Leverage and metals can swing hard; an SMSF adds compliance effort and locks your money away. Here's a rough sense of each option's bumpiness, income, accessibility and admin load.
Leverage cuts both ways: because your $200k controls an $800k property, a 10% price fall wipes out roughly 40% of your equity — not 10%. That's true whether the property is held personally or in an SMSF. The big numbers above assume prices only ever rise on the long-run average. Real markets don't move in straight lines, and an SMSF can't easily sell a slice of a house to raise cash in a hurry.
And "doing nothing" with cash is a guaranteed loss
Leaving $200,000 in a drawer (or a zero-interest account) feels safe. But at 2.5% inflation, each dollar buys less every year. The number on your statement stays the same — its real power shrinks.
The quiet erosion: $200,000 left uninvested loses about $43,760 (−22%) of its real value over 10 years, $77,946 (−39%) over 20 years, and $104,651 (−52%) over 30 years. After 30 years your $200k still says $200k — but it only buys about $95,000 of today's goods.
12
So… what actually wins?
SMSF property is the new tax king
Same leveraged house, same growth — but taxed at ~10% instead of up to 39% on the gain, with income taxed at 15% along the way. Because the Budget left super untouched, the SMSF route produces the biggest in-pocket profit of any option here. The catches are real: a decent balance, locked-away money, compliance and an annual audit.
Leverage still rules outside super
Borrowing to buy property still produces big raw profit, because you grow an $800k asset off a $200k stake. New builds now clearly beat established homes thanks to the tax perks they kept. But if prices fall, leverage amplifies your losses just as fast.
Gold & silver quietly shine long-term
With no loan and no rent, gold's ~10% history turns $200k into serious money over 30 years — the strongest of the unleveraged options here. Because metals pay no income, nothing is taxed until you sell, so the full return compounds untouched. The trade-off: real volatility and nothing in your pocket along the way.
ASX 200 is the steady all-rounder
Shares pay dividends yearly (often with franking credits that soften tax), are easy to buy and sell, and need no tenants or maintenance. With dividends reinvested, $200k compounds into a healthy profit over 30 years. It trails metals here mainly because dividends are taxed every year before they can be reinvested — though inside super (15%, or 0% in pension phase, with franking refunds) shares become far more efficient.
The honest answer: it depends on you
SMSF suits those with a solid super balance and a long, retirement-focused horizon. Property in your own name suits those comfortable with debt who want access to the equity. Shares suit hands-off investors wanting flexibility. Gold/silver suit those hedging uncertainty. The 2026 Budget narrowed property's tax edge on second-hand homes held personally — and made structure the most important decision of all.
What to do before 1 July 2027
You have a planning window. Review whether existing assets are grandfathered, model new purchases under the post-2027 rules, consider whether the right structure is personal, new-build or super, and watch the $3M Division 296 threshold if your balance is large. Don't rush a buy or sell to "beat" the changes without advice — the transitional rules are designed so there's no need to.
Important — this is general information, not financial advice.
Every figure here is a model built on historical averages and simplifying assumptions; real returns vary wildly by year, suburb and market cycle, and can be negative. Leverage magnifies both gains and losses. The reforms were announced in the 2026–27 Budget and are not yet law — details may change as legislation passes Parliament. SMSFs carry strict compliance, contribution caps, access restrictions and set-up/running costs, and are not suitable for everyone. Tax outcomes depend on your personal situation. Before buying or selling anything — especially property or setting up an SMSF — talk to a licensed financial adviser and registered tax agent.
Sources: Australian Federal Budget 2026–27 — Tax explainer: Negative Gearing and Capital Gains Tax Reform (budget.gov.au); ATO "Tax reform — Boosting home ownership: Reforming negative gearing and capital gains tax" guidance (ato.gov.au); Treasury fact sheet & major-firm budget analyses (NAB, Baker McKenzie, Perpetual, CPA Australia, SMSF Association) confirming superannuation funds & SMSFs are excluded from the CGT and negative-gearing changes; ITAA 1997 s115-100 (one-third super CGT discount) & Division 296; ATO SMSF taxation guidance; ABS & Cotality property data; ASX/Stockspot long-run index returns; ABC Bullion gold & silver AUD statistics. Modelled June 2026. Returns are illustrative historical averages, not predictions.
