The May 2026 Federal Budget changed negative gearing and capital gains tax for residential property. If you're weighing up selling an established investment property in Brisbane, the Gold Coast, or anywhere in Queensland, here's what actually changed, who's grandfathered, and what it means for your timing.
The short version: if you already owned your investment property (or had an unconditional contract) before 7:30pm AEST on 12 May 2026, you keep the existing negative gearing rules. If you sell before 1 July 2027, your capital gain is calculated under the existing 50% discount. Nothing changes for a sale you complete today.
12 May 2026: Grandfathering cut-off for negative gearing
1 July 2027: CGT discount replaced for gains after this date
~2%: Treasury's estimated annual price growth slowdown
On Budget night, the Treasurer announced the largest property tax reform in over two decades, built around two changes:
Negative gearing restricted to new builds. For established residential properties purchased from 7:30pm AEST on 12 May 2026, rental losses can only be offset against other property income or gains, not your salary or other personal income.
The 50% CGT discount replaced. From 1 July 2027, gains on residential property will be calculated using cost-base indexation plus a 30% minimum tax rate, instead of the flat 50% discount.
If your investment property was purchased, or you were already under an unconditional contract before 7:30pm AEST on 12 May 2026, the existing negative gearing rules continue to apply to that property. This is confirmed in the official Treasury fact sheet released with the Budget.
For capital gains tax specifically, the distinction is about when the gain accrues, not when you bought. Gains that accrued before 1 July 2027 are expected to be treated under the existing rules, even if you sell after that date, though the precise mechanics will depend on the final legislation, which had not passed Parliament at time of writing.
What this means for your timing?
Selling now, or before 1 July 2027
Your sale is assessed under the existing CGT rules, including the 50% discount if you've held the property for more than 12 months. Nothing about the reform changes the conveyancing or settlement process itself.
Selling after 1 July 2027
Gains accrued from that date are expected to be calculated under the new indexation and minimum-tax-rate model. This is a tax question for your accountant, not something a conveyancer can advise on — but it may affect your decision about when to list.
Buying now to hold long-term
Investors purchasing established property after 12 May 2026 lose the personal-income negative gearing offset. New builds and off-the-plan purchases retain more favourable treatment, which is shifting investor demand toward new supply.
Will Queensland property prices actually fall?
Based on Treasury's own modelling, prices are expected to keep growing, just more slowly: roughly 2 percentage points less per year over a couple of years, relative to what would otherwise have happened. Independent bank forecasts have been similar, revising 2026 dwelling price growth down from around 5% to roughly 3%.
One dynamic worth understanding: because existing investors are grandfathered, many have less incentive to sell, this "lock-in effect" can keep supply constrained even as new-investor demand for established homes softens. For Queensland's established-property market, this points to a slower, steadier market rather than a downturn.
Frequently asked Questions for Queensland Property Investors
I'm under contract but haven't settled yet, am I grandfathered?
Yes. The official fact sheet confirms properties under an unconditional contract before 7:30pm AEST on 12 May 2026 are included in the grandfathering provisions, even if settlement occurs later.
Does refinancing my investment property reset the CGT clock?
No. Refinancing doesn't reset your cost base or your ownership period for CGT purposes, the ownership period runs from your original purchase date regardless of how many times you've refinanced.
Do I need a conveyancer to sell in Queensland?
Yes. Queensland law requires you to use either a solicitor or a licensed conveyancer to handle the legal transfer of property, regardless of the tax treatment of your sale.
Can my conveyancer tell me how much CGT I'll owe?
No. that's a question for your accountant or tax adviser, since it depends on your individual circumstances, holding period, and cost base. Your conveyancer handles the legal transfer of the property; a tax adviser handles your CGT position.
General information only. This page summarises publicly available Budget announcements as at July 2026. The negative gearing and CGT reforms had not yet passed Parliament at time of writing and may change during the legislative process. This is not legal or tax advice, speak with a qualified conveyancer and a registered tax adviser about your specific situation before making decisions based on these changes.
Reviewed by John Horrocks, Principal Solicitor, admitted to the Supreme Court of Queensland