Capital Gains Tax Changes 2026 FAQ for Buyers in Queensland
The Albanese Government's 2026–27 Budget delivered the biggest shake-up to property taxation in over two decades. Here are the top FAQ for the capital gains tax changes and what it actually means for property buyers in Queensland. "Economists at NAB said in a statement, "It is possible that the changes to taxation arrangements for housing are some of the most significant in a quarter of a century"."
What Changed and Why?
On Budget night, 12 May 2026, Treasurer Jim Chalmers announced the most significant property tax reforms since 1999. The Government's stated reasoning: since 1999, housing prices have risen more than twice as fast as average full-time earnings, and between 2001 and 2021, home ownership rates for Australians aged 25–34 fell by seven percentage points. The reforms are designed to level the playing field for first home buyers while preserving investor gains already made.
Two proposed Capital Gains Tax changes will both take effect from 1 July 2027:
1. Negative gearing restricted to new builds.
From 1 July 2027, investors who buy an established (existing) home can no longer offset rental losses against their salary or other income. Losses can be carried forward and used against future residential property income, but the immediate tax break is gone for new established-home purchases.
2. The 50% CGT discount was replaced with cost base indexation.
Instead of halving your taxable gain, you'll only pay tax on the real (above-inflation) portion of the gain. A 30% minimum tax rate will also apply to ensure gains aren't deferred to a low-income year to minimise tax.
Proposed Law: Not Yet Passed
These changes were announced in the federal budget but must pass the Senate to become law. The detail may shift during the legislative process. Always speak with a qualified conveyancer or tax adviser before making property decisions based on these changes.
The Numbers That Matter: What Treasury Actually Projects
- 75,000 Additional owner-occupiers projected over the next decade nationally
- ~2%Less annual house price growth estimated over a couple of years
- <$2Per week expected rental increase for median-rent households
- Source: Australian Government Budget 2026–27, Negative Gearing and Capital Gains Tax Reform fact sheet.
According to the Treasury Fact Sheet the 75,000 figure is the Government's headline affordability claim and they say it is equivalent to reversing roughly ten years of decline in the national home ownership rate. The price growth slowdown is not a reversal. For Queensland buyers, this may mean the market keeps moving forward just slightly less aggressively for a period.
Australian Government Budget 2026–27 Fact Sheet
Who Is and Isn't Affected in the CGT changes?
The Key Question: Will Houses Actually Get Cheaper in Queensland?
According to the Treasury's own modelling: prices will grow more slowly, not fall. The reforms are projected to see prices grow around 2 per cent less per year over a couple of years relative to what would have happened without the changes. In a market like Brisbane, where annual growth has routinely exceeded 8–10%, a 2-percentage-point moderation is meaningful.
The official fact sheet lists two key dynamics as to why prices may not fall more significantly:
The lock-in effect. Properties owned before Budget night are grandfathered, existing investors can keep negatively gearing them indefinitely. This reduces forced selling and keeps supply constrained, supporting prices.
Demand shifts rather than disappears. With new builds fully exempt from both changes, investor money is likely to redirect toward house and land packages and off-the-plan apartments rather than leave the market altogether. This is by design and the Government wants to channel investment into new supply.
For Queensland first home buyers, the practical benefit is a modest reduction in competition from investors when buying established properties particularly in Brisbane's middle ring suburbs where investor activity has been strongest.
What This Means for House and Land Buyers in Queensland?
House and land packages on previously vacant land are explicitly categorised as eligible new builds and fully exempt from both the negative gearing restrictions and the CGT discount change.
Queensland House & Land: Fully Exempt
Investors purchasing house and land packages retain full negative gearing rights and can choose the more favourable tax treatment on capital gains either the existing 50% CGT discount or cost base indexation. This is a deliberate incentive to direct capital into new housing supply across Queensland's growth corridors.
However, the definition of "new build" is defined and worth understanding before you sign:
Critically: subsequent purchasers of a new build cannot access the CGT discount or negative gearing. These benefits apply only to the first investor purchaser. If you're buying a "new" property that has already had an owner, check its history carefully, your conveyancer can assist with this.
The Government published worked examples to illustrate the impact on different buyer types. Here are the four most relevant to Queensland property buyers:
The New CGT Rules: Simply Explained
The Old System (still applies to gains before 1 July 2027)
Hold an investment property for more than 12 months, sell it, and pay tax on only half your capital gain. A $200,000 profit meant tax on $100,000. Simple but it didn't distinguish between real gains and gains driven purely by inflation.
The New System (gains from 1 July 2027 onwards)
Your original purchase price is indexed to inflation using the Consumer Price Index (CPI). Tax is only paid on the gain above that inflation-adjusted figure. A 30% minimum tax rate applies to prevent investors from timing a sale to a low-income year to minimise their bill. People receiving means-tested payments like the Age Pension or JobSeeker are exempt from the minimum tax.
The ATO will provide tools to calculate indexed values. For assets owned before 1 July 2027, the property's value on that date becomes the reference point — you use the 50% discount on growth before that date, and indexation on growth after it.
Owner-Occupiers: Nothing Changes for You
The main residence CGT exemption is completely unchanged. If you sell your primary home, you pay zero Capital Gains Tax — regardless of how much it has grown in value. This applies to all Queensland homeowners.
What the OECD Says
The OECD, in its most recent country report on Australia, specifically recommended cutting or eliminating the CGT discount and phasing out negative gearing to improve the efficiency of Australia's tax system. The Government has chosen a more gradual path limiting rather than eliminating negative gearing, and replacing the CGT discount with indexation rather than simply removing it which is seen as a more politically and economically cautious approach.
Key Dates Queensland Property Buyers Must Know
12 May 2026: Budget announcement: cutoff for grandfathering existing properties. Properties under contract but not yet settled are also grandfathered.
30 Jun 2027: Last date investors who bought established properties after announcement can fully claim negative gearing losses against other income
1 Jul 2027: New CGT cost base indexation and 30% minimum tax take effect. Negative gearing restricted for established properties from this date.
1 Jul 2027: Properties purchased from this date cannot be negatively geared at all (established). New builds remain exempt.
30 Jun 2029: Extended ban on foreign purchases of established dwellings expires
What Should Queensland First Home Buyers Do Now?
If you're buying your own home: whether established or new none of these changes directly affect you. Your main residence CGT exemption is intact. The benefit is indirect: slightly less investor competition on established properties, and government support for new housing supply that may widen your options.
If you're considering a house and land package: act with confidence. New builds are the clear winner in this policy environment, fully exempt from both changes. Growth corridors across South East Queensland (Ripley, Caboolture, Ormeau, North Lakes, Redlands, Sunshine Coast hinterland) remain strong markets for new supply.
Get your contract reviewed before you sign. The two-tier system created by these reforms with different rules depending on property type, purchase date, and ownership structure makes pre-contract advice more important than ever. Your conveyancer can confirm whether a property qualifies as a new build, flag any issues with prior ownership history, and ensure your contract correctly reflects your protections.
Queensland Stamp Duty Is Unchanged by These Reforms
Queensland's transfer duty (stamp duty) rates and the First Home Concession are state government matters and are not affected by these federal budget reforms. First home buyers in Queensland can still access the full stamp duty concession on homes valued up to $700,000, and a partial concession up to $800,000. The First Home Owner Grant for new builds also continues separately.
Frequently Asked Questions Capital Gains Tax
Will the CGT changes make houses cheaper in Queensland?
Not dramatically. Treasury's own modelling projects prices will grow around 2 per cent less per year for a couple of years. Over a decade, the reforms are estimated to produce around 75,000 additional owner-occupiers nationally. Prices won't fall — growth will just moderate slightly, meaning first home buyers face a somewhat less competitive market.
Are house and land packages in Queensland exempt from the negative gearing changes?
Yes, provided they qualify as eligible new builds. Any residential construction on previously vacant land qualifies. Importantly, knock-down rebuilds that replace one dwelling with one dwelling do not qualify. And once a new build has been on-sold to a second investor, the tax benefits no longer apply to that second buyer. Your conveyancer can confirm eligibility before you commit.
I'm a first home buyer — am I affected by the CGT changes?
No. The main residence CGT exemption is completely unchanged. You will not pay Capital Gains Tax when you sell your own home, regardless of how much it has grown in value.
Will rents go up because of these changes?
Treasury modelling projects an increase of less than $2 per week for households at the current median rent. The Budget also includes new housing supply measures designed to put downward pressure on rents over time.
I'm under contract on an investment property — am I grandfathered?
Yes. The official fact sheet confirms that properties where a contract had been entered into but not yet settled before 7:30pm AEST on 12 May 2026 are included in the grandfathering provisions. These properties can continue to be negatively geared under existing rules.
Do I need a conveyancer to buy property in Queensland?
In Queensland you are required to use either a solicitor or a licensed conveyancer to handle the legal transfer of property. Given the increased complexity around property type, purchase date, and new build eligibility, having expert guidance before signing is more important than ever especially if you're purchasing a new build or house and land package where the tax treatment depends on precise legal definitions.