The Changes Could Mean for Property Investors

At D Residential Group, we work closely with Perth property investors every day and understand the uncertainty many landlords are currently feeling following the recent Federal Budget announcements.

As a Perth property management company, we believe it’s important to focus on facts, long-term strategy and strong market fundamentals while the market works through these proposed changes.

The recent Federal Budget announcements have created significant discussion across Australia’s property market, particularly surrounding the proposed changes to negative gearing and capital gains tax (CGT).

And understandably, many investors are now asking:
“What does this actually mean for me?”

While the headlines have created concern, it’s important to remember these are proposed reforms and the full long-term impact is still yet to unfold.

As always, property markets evolve through legislation changes, lending policy updates, interest rate cycles and economic conditions. The investors who typically perform best long term are the ones who stay informed, adapt strategically and continue focusing on quality assets with strong fundamentals.

What Has Been Proposed?

Negative Gearing Changes

From 1 July 2027, the Federal Government has proposed that negative gearing benefits on residential property will largely apply only to newly built dwellings.

Importantly, investors who owned a property prior to Budget Night (12th of May 2026), including properties currently under contract but not yet settled, are expected to be protected under grandfathering provisions. This means many current investors may continue under the existing arrangements.

A transitional arrangement has also been proposed for established dwellings purchased after Budget Night, allowing negative gearing benefits to continue until 1 July 2027.

Commercial property and other investment asset classes such as shares are expected to remain unchanged under the current rules.

Capital Gains Tax (CGT) Reform

The Government has also proposed changes to the current 50% capital gains tax discount.

Under the proposal:
• The existing 50% CGT discount would remain in place until 1 July 2027
• After this date, gains may move to an inflation-indexed taxation model
• Newly built properties may have the option of choosing between the current 50% discount method or the inflation-indexation model at the time of sale

For existing property owners who sell after 1 July 2027, gains made before this date are expected to continue using the current 50% method, while gains after this point may fall under the new model.

Because of this, many industry professionals are recommending investors consider obtaining updated property valuations around this transition period for future cost-base calculations.

What Is The Government Trying To Achieve?

According to the Federal Government, the reforms aim to:
• Encourage investment into new housing supply
• Improve affordability for first home buyers
• Preserve existing investor gains through grandfathering provisions
• Support long-term housing infrastructure development

The Government forecasts these reforms could help an additional 75,000 Australians become owner-occupiers over the next decade.

At the same time, the Budget also forecasts that taxation reform may reduce new housing construction by approximately 35,000 homes over 10 years.

To offset this, the Government has announced a $2 billion infrastructure investment designed to support housing development approvals and accelerate supply through roads, water and sewerage infrastructure.

What Does This Mean For Perth Investors?

At D Residential Group, we believe it’s important to take a balanced, long-term view when navigating market changes and policy reform.

While the recent announcements have understandably created uncertainty, Perth’s rental market continues to remain well supported by low vacancy rates, ongoing population growth and strong demand for quality rental homes in desirable locations.

For investors, this reinforces the importance of:
• Buying quality property in strong locations
• Taking a long-term approach to investment decisions
• Holding well-performing assets
• Maintaining well-presented and well-managed homes
• Focusing on rental demand and overall portfolio performance

As property markets continue to evolve, strategic asset selection and informed decision-making will likely become even more important moving forward.

The Importance Of Staying Strategic

Property investing has never been a “set and forget” environment. Successful investors adapt as markets, legislation and economic conditions evolve.

The strategy may shift over time, but opportunity still exists.

Now more than ever, investors should focus on:
• Long-term strategy over short-term headlines
• Quality assets in quality locations
• Strong property management
• Maintaining well-presented homes
• Seeking professional financial and taxation advice where required

At D Residential Group, we remain committed to helping Perth landlords navigate changing market conditions with confidence, transparency and expert property management advice.

Whether you are self-managing, reviewing your current property manager or simply wanting guidance on your investment strategy moving forward, our experienced Perth property management team is here to help.

For tailored advice on your investment property, rental performance or long-term portfolio strategy, contact D Residential Group.