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# RBA lifts the cash rate to its highest since late 2011, and August inflation rises: what to watch next

URL: https://www.investingplatform.com.au/blog/rba-hikes-cash-rate-to-4-60
Author: Investing Platform
Published: 2026-10-01

The Reserve Bank of Australia raised the cash rate target by 25 basis points to 4.60% on 29 September 2026. The 29 September 2026 decision was the fourth hike of 2026 (RBA 29 Sep 2026; ABC News 29 Sep 2026) and took the cash rate to its highest level since late 2011 (RBA cash rate table; ABC News 29 Sep 2026). On 30 September 2026, the ABS reported that headline inflation rose to 4.0% in the 12 months to August 2026 (ABS 30 Sep 2026).

## What did the RBA decide?

At its meeting on 29 September 2026, the Monetary Policy Board decided to increase the cash rate target by 25 basis points to 4.60% (RBA 29 Sep 2026). The new 4.60% target took effect on 30 September 2026 (RBA cash rate table). The RBA said the decision was unanimous, and ABC News reported that all nine members of the board voted in favour (RBA 29 Sep 2026; ABC News 29 Sep 2026).

The 29 September decision was the fourth increase of 2026. The RBA's cash rate table shows the target started the year at 3.60% and rose by 25 basis points at each increase, taking effect on 4 February, 18 March, 6 May and 30 September: a total of 100 basis points (RBA cash rate table). The last time the target was higher than 4.60% was in 2011, when it stood at 4.75% until a cut that took effect on 2 November 2011 (RBA cash rate table).

The Board's statement said: "The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed" (RBA 29 Sep 2026).

## Why did the RBA hike again?

The Board's statement said: "Inflation remains elevated and some of the upside risks flagged in August are materialising" (RBA 29 Sep 2026). Among the reasons the Board gave (RBA 29 Sep 2026):
- Energy: the conflict in the Middle East has broadened, and global energy prices are now much higher than had been assumed in the August forecasts.
- Technology goods: AI-related demand is driving rapid growth in global prices for technology-related goods.
- Domestic capacity: there remains pressure on domestic capacity.
- Business pricing: liaison indicates that firms are experiencing cost pressures and are either increasing the prices of their goods and services or looking to do so.
- Inflation expectations: short-term measures of inflation expectations remain elevated.
- Inflation outcomes: recent inflation outcomes in Australia were stronger than expected at the previous meeting.

The 29 September statement also noted that housing prices have fallen in most capital cities and that new housing loans have declined noticeably. The Board still judged that inflation is too high and that "a further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period" (RBA 29 Sep 2026).

EY Oceania chief economist Cherelle Murphy told the ABC: "It's certainly going to hurt many households, this fourth interest rate hike. But from the Reserve Bank's point of view, certainly what they see is hurting more is inflation continuing to be too high" (ABC News 29 Sep 2026).

Commonwealth Bank head of Australian economics Belinda Allen said: "Higher interest rates make borrowing more expensive and saving more attractive." She added: "That tends to slow household spending and business investment, reducing some of the demand pressures in the economy and, over time, helping bring inflation back towards the RBA's 2–3 per cent target" (ABC explainer 29 Sep 2026).

## What did the August CPI show?

The ABS released the Consumer Price Index for August 2026 on 30 September 2026 at 11:30am AEST (ABS 30 Sep 2026). In the 12 months to August 2026 (ABS 30 Sep 2026):
- Headline CPI rose 4.0%, up from 3.5% in the 12 months to July 2026.
- Trimmed mean inflation was 3.6%, unchanged from July.
- Housing rose 5.7%, with rents up 3.6% and new dwelling prices up 5.4%.
- Transport rose 5.6%. Automotive fuel prices rose 14.8% in the month of August alone, which the ABS put down to higher world oil prices and the unwinding of the remainder of the federal government's fuel excise relief.
- Electricity rose 13.2%, largely due to the ending of Commonwealth electricity rebates.

In August, automotive fuel and electricity were both excluded from the trimmed mean and were the key drivers of the difference between headline and trimmed mean inflation (ABS media release 30 Sep 2026). Capital Economics senior APAC economist Abhijit Surya said measures of core inflation didn't strengthen further in August, supporting Capital Economics' view that the RBA's tightening cycle is likely at an end (ABC live blog 30 Sep 2026).

Headline CPI at 4.0% and the trimmed mean at 3.6% were both above the RBA's 2–3% inflation target in the 12 months to August 2026 (ABS 30 Sep 2026; RBA).

## What about the labour market?

The seasonally adjusted unemployment rate rose to 4.6% in August 2026 (ABS 24 Sep 2026). The Sydney Morning Herald noted that August's 4.6% unemployment rate was the highest in nearly five years (SMH 29 Sep 2026). The RBA's statement described labour market conditions as having "eased broadly as expected in recent months", with leading indicators "broadly stable" (RBA 29 Sep 2026).

## What does it mean for mortgages and borrowing capacity?

Repayments. Canstar figures published by the ABC on 28 September 2026, before the decision, estimated that a 25 basis point September hike, if passed on in full by banks, would add $91 a month to repayments on a $600,000 loan, and that the four 2026 hikes would add $364 a month on the same loan (ABC 28 Sep 2026, citing Canstar).

Banks passing it on. Macquarie said on 29 September that it will increase its variable home loan reference rates by 0.25% p.a. from 15 October 2026 (Macquarie 29 Sep 2026). On 30 September, all four big banks (CBA, NAB, Westpac and ANZ) confirmed they will pass the hike on in full, lifting variable home loan rates by 0.25% p.a. from 9 October 2026 (ABC live blog 30 Sep 2026).

Borrowing capacity. Cotality estimates that, for a household on the median income, the four rate hikes since February have reduced borrowing capacity by almost $90,000, equivalent to about 9% (Cotality 29 Sep 2026). Canstar estimated, before the decision, that the four 2026 hikes would cut the borrowing capacity of someone on the average full-time wage of $108,650 by more than $47,000 since the start of 2026, and that of a couple both on average wages by nearly $95,000 (Canstar 28 Sep 2026; ABC explainer 29 Sep 2026).

## What's happening to house prices and rents?

Cotality's national Home Value Index fell 1.1% in September 2026, the sixth straight month of falling values, leaving national dwelling values 5.2% below their record high from March 2026 (Cotality 1 Oct 2026). Sydney and Melbourne dwelling values were down 7.0% and 6.2% respectively over the 12 months to 30 September 2026 (Cotality 1 Oct 2026).

Cotality reported that the national rental vacancy rate reached 2.0% in September 2026, up from a record low of 1.5% in February 2026 and still well below the pre-COVID decade average of 3.3%. The monthly pace of rental growth eased to 0.3% in seasonally adjusted terms, taking the annual change in national rents to 5.5% (Cotality Home Value Index, 1 Oct 2026). The ABS reported rents up 3.6% in the 12 months to August 2026 (ABS 30 Sep 2026).

## How are banks and economists reading November?

NAB's forecasts have the cash rate peaking at 4.6% (NAB 30 Sep 2026). CBA economist Trent Saunders said: "For now, we continue to expect the RBA to leave the cash rate unchanged in November. However, the decision remains finely balanced" (ABC live blog 30 Sep 2026). Before the decision, the majority of analysts surveyed by Bloomberg expected the RBA to be done with hikes for the rest of the year (ABC 28 Sep 2026; ABC explainer 29 Sep 2026).

ANZ, HSBC and UBS expect a further rise in November (ABC explainer 29 Sep 2026). ANZ head of Australian economics Adam Boyton said the unanimous decision and the hawkish tone of the post-meeting statement reinforced ANZ's forecast of a further hike (Broker Daily 30 Sep 2026). On 30 September 2026, Westpac changed its forecast to a November hike: chief economist Luci Ellis said a November hike is now the base case, "absent a lasting resolution of the Middle East conflict beforehand, or some other event that significantly lowers the outlook for energy-related costs in Australia" (Westpac IQ 30 Sep 2026). Betashares chief economist David Bassanese said: "it's now my base case that the RBA is now a short-priced favourite to raise rates by 25 basis points on Melbourne Cup Day, taking the cash rate to 4.85 per cent" (ABC News 29 Sep 2026).

The ABS releases the Consumer Price Index for September 2026, which includes the September-quarter figures, on 28 October 2026, the last CPI release before the Board's 3 November 2026 decision (ABS 30 Sep 2026; ABS release calendar).

## What to watch next

Dates and times are from the RBA calendar, the ABS release calendar, Macquarie's announcement and the ABC's report of the big four banks' announcements.
- 9 October 2026: the big four banks' variable home loan rate increases take effect (ABC live blog 30 Sep 2026).
- 13 October 2026, 11:30am AEDT: minutes of the September 2026 Monetary Policy Board meeting (RBA Coming Up).
- 15 October 2026: Macquarie's variable home loan reference rate increase takes effect (Macquarie 29 Sep 2026).
- 15 October 2026, 11:30am AEDT: ABS Labour Force, September 2026 (ABS release calendar).
- 28 October 2026, 11:30am AEDT: ABS Consumer Price Index, September 2026, including the September-quarter figures (ABS release calendar).
- 3 November 2026, 2:30pm AEDT: next RBA cash rate decision, followed by the Governor's media conference at 3:30pm AEDT (RBA Coming Up).

## Sources

1. Reserve Bank of Australia (media release 2026-27) — Statement by the Monetary Policy Board: Monetary Policy Decision (29 Sep 2026) — https://www.rba.gov.au/media-releases/2026/mr-26-27.html
2. Reserve Bank of Australia — Cash Rate Target (accessed 1 Oct 2026) — https://www.rba.gov.au/statistics/cash-rate/
3. Reserve Bank of Australia — Coming Up (accessed 1 Oct 2026) — https://www.rba.gov.au/coming-up/
4. Reserve Bank of Australia — About Monetary Policy (accessed 1 Oct 2026) — https://www.rba.gov.au/monetary-policy/about.html
5. Australian Bureau of Statistics — Consumer Price Index, Australia, August 2026 (30 Sep 2026) — https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/aug-2026
6. Australian Bureau of Statistics (media release) — CPI rose 4.0% in the year to August 2026 (30 Sep 2026) — https://www.abs.gov.au/media-centre/media-releases/cpi-rose-40-year-august-2026
7. Australian Bureau of Statistics (media release) — Unemployment rate rises to 4.6% in August (24 Sep 2026) — https://www.abs.gov.au/media-centre/media-releases/unemployment-rate-rises-46-august
8. Australian Bureau of Statistics — Future release - October 2026 — https://www.abs.gov.au/release-calendar/future-releases/202610
9. ABC News — RBA lifts interest rates to highest level in 15 years (29 Sep 2026) — https://www.abc.net.au/news/2026-09-29/rba-lifts-rates-highest-level-in-15-years-september-2026/107206640
10. ABC explainer — What an interest rate hike means for your mortgage, savings account and the Australian dollar (29 Sep 2026) — https://www.abc.net.au/news/2026-09-29/what-the-rba-cash-rate-hike-means-for-mortgages-rents-savings/107203364
11. ABC News — Interest rates likely to rise tomorrow, but is a second sting coming before Christmas? (28 Sep 2026) — https://www.abc.net.au/news/2026-09-28/interest-preview-ahead-of-sept-29-meeting/107196596
12. ABC live blog — ASX jumps as traders cut bets on November rate rise as big banks pass on RBA decision — as it happened (30 Sep 2026) — https://www.abc.net.au/news/2026-09-30/asx-markets-business-live-news/107210136
13. The Sydney Morning Herald — RBA governor warns there could be further rate hikes, even if it tips Australia into recession (29 Sep 2026) — https://www.smh.com.au/politics/federal/rba-hikes-interest-rates-to-4-6-per-cent-in-15-year-high-20260929-p6119t.html
14. Cotality — RBA rate hike deepens housing market headwinds as borrowing power shrinks (29 Sep 2026) — https://www.cotality.com/au/insights/articles/rba-rate-hike-deepens-housing-market-headwinds-as-borrowing-power-shrinks
15. Cotality — Australian housing values down for sixth straight month in September (1 Oct 2026) — https://www.cotality.com/au/insights/articles/australian-housing-values-down-for-sixth-straight-month-in-september
16. Cotality — Home Value Index, index results as at 30 September 2026 (1 Oct 2026) — https://discover.cotality.com/hubfs/Article-Reports/COTALITY%20HVI%20OCT%202026%20FINAL.pdf
17. Broker Daily — Four 2026 rate hikes deal $90k blow to borrowing capacity (30 Sep 2026) — https://www.brokerdaily.au/economy/22073-four-2026-rate-hikes-deal-90k-blow-to-borrowing-capacity
18. Canstar — Home buyers in for another budget cut: what a Tuesday hike might mean for property (28 Sep 2026) — https://www.canstar.com.au/news/what-tuesday-hike-might-mean-for-property/
19. Macquarie — Macquarie Bank's response to the RBA's interest rate decision (29 Sep 2026) — https://www.macquarie.com/au/en/about/news/2026/macquarie-banks-response-to-the-rba-interest-rate-decision.html
20. NAB — NAB RBA Watch: RBA hikes by 25bps as expected (30 Sep 2026) — https://www.nab.com.au/news/economy-markets/nab-rba-watch--rba-hikes-by-25bps-as-expected
21. Westpac IQ — RBA hikes in September, November follow-up now expected (30 Sep 2026) — https://www.westpaciq.com.au/economics/2026/09/rba-decision-29-September-2026

## Disclaimer

Property is not a financial product. No guarantees are made regarding future performance or returns. This is general information only and does not consider your objectives, financial situation or needs — seek independent financial, legal and taxation advice. Eligibility & T&Cs apply.


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# Big four banks tip an RBA cash-rate hike on 29 September

URL: https://www.investingplatform.com.au/blog/big-four-banks-tip-rba-hike
Author: Investing Platform
Published: 2026-09-23

All four big banks now expect the RBA to lift the cash rate from 4.35% to 4.60% on Tuesday 29 September 2026, which would be the fourth hike this year (Canstar 21 Sep 2026; MPA 21 Sep 2026; RBA). Inflation is easing but still above target, the Governor says some upside risks to inflation appear to be materialising, and house prices have fallen for five straight months (ABS 26 Aug 2026; RBA 18 Sep 2026; Cotality 1 Sep 2026).

## What just changed?

By Monday 21 September, all four had moved to September. NAB was already there. Westpac's chief economist Luci Ellis brought Westpac's call forward to a September hike, announced on 21 September, and CBA and ANZ followed the same day (Westpac 21 Sep 2026; Canstar 21 Sep 2026; MPA 21 Sep 2026).

So the consensus is a 25 basis point hike, taking the cash rate to 4.60% on Tuesday 29 September. That's what the bank economists think. It's not what the RBA has said it will do.

## How did we get to 4.35%?

Quick recap of the year, from the RBA's cash rate table (dates are when each decision took effect, the day after it was announced):
- 4 February: up 25bp to 3.85%
- 18 March: up 25bp to 4.10%
- 6 May: up 25bp to 4.35%
- 17 June and 12 August: held at 4.35%

Three hikes, two holds. A September move would make it four hikes in 2026 (MPA 21 Sep 2026).

CBA's Head of Australian Economics, Belinda Allen, says a move to 4.60% "will see those with a mortgage facing a higher mortgage rate than seen since 2011", with the cash rate "25bp above the peak seen ahead of the 2025 cutting cycle" (MPA 21 Sep 2026).

## Do the banks agree on what happens after September?

Not quite. This is where it gets interesting.

ANZ economists Adam Boyton and Jack Chambers have a second hike in November, taking the rate to 4.85%. That would be the highest since 2008 (MPA 21 Sep 2026; Broker Daily 22 Sep 2026).

ANZ is the only major bank to officially put a second hike in its forecast. Westpac and NAB say there's a risk of another hike in November but haven't added it to their official forecasts (Canstar 21 Sep 2026). CBA's Allen says that "at 4.6% monetary policy is restrictive" (MPA 21 Sep 2026).

Same data, different reads on how much is enough. That's normal. Economists forecast; they don't know.

## What did the RBA actually say?

Governor Michele Bullock appeared before the House of Representatives Standing Committee on Economics on 18 September. The line that got the most attention, from her opening statement: "although growth in the Australian economy is slowing, some of these upside risks to inflation appear to be materialising" (RBA 18 Sep 2026).

Deputy Governor Andrew Hauser offered a personal view that Australian rates are now closer to sensible long-term global real rates. He also raised a question: have borrowers adjusted? (ABC News 18 Sep 2026).

Neither of those is a promise to hike. But together they read as a central bank that isn't relaxed about inflation.

## What are markets pricing?

Two different sources, two slightly different numbers. Worth keeping them separate.

LSEG pricing on 18 September had roughly a 95% chance of a September hike and about 37% for a further move in November (ABC News 18 Sep 2026).

ASX pricing reported on 22 September put the chance of a move to 4.60% at around 82% (Broker Daily 22 Sep 2026).

Both point the same way. The gap between them is a reminder that these figures shift daily and depend on how each provider calculates them.

## Why is inflation the sticking point?

The ABS monthly CPI, released 26 August 2026, showed headline inflation at 3.5% in the year to July, down from 3.8% in June. The trimmed mean, which strips out the most extreme price moves and is a measure of underlying inflation the RBA watches closely, was 3.6% (ABS 26 Aug 2026).

That's heading in the right direction. But the RBA targets 2 to 3 per cent, and 3.6% underlying isn't there yet.

Where's the pressure coming from? Housing was up 5.0% over the year, with new dwelling prices up 5.7%, rents up 3.6% and electricity up 6.1%. Food and non-alcoholic beverages rose 3.2% (ABS, Consumer Price Index, Australia, July 2026).

One thing worth clarifying: the CPI excludes mortgage interest charges (ABS FAQ on measuring housing in the CPI). So the 5.0% Housing figure isn't measuring what borrowers pay the bank. The main contributors were new dwelling prices, rents and electricity.

## What's happening to house prices?

Falling, and the falls are broadening.

Cotality's Home Value Index dropped 0.9% nationally in August 2026, the fifth monthly decline in a row. Values are now 3.6% below the March peak, and 93% of capital-city suburbs recorded a fall in values over winter (Cotality 1 Sep 2026).

At the parliamentary hearing, RBA Assistant Governor Brad Jones put the Sydney and Melbourne declines at around 5 to 6 per cent. Bullock added some perspective: prices are still roughly 50 per cent higher than they were in early 2020 (ABC News 18 Sep 2026).

So it's a correction from a high base, not a collapse. Whether a fourth hike deepens it is one of the questions a lot of investors are asking.

## What does a 25bp hike mean for a mortgage?

Canstar calculated on 21 September 2026 that a 0.25 percentage point hike in September would add $91 to the monthly repayments of a borrower who had a $600,000 loan at the start of the 2026 hikes, with 25 years remaining (Canstar 21 Sep 2026).

That's illustrative only. Your actual change depends on your lender, your loan size, your remaining term and whether your bank passes the move on in full. It's a useful yardstick, not a bill.

## How should you think about it?

We're not going to tell you what to do with your money. That's not our lane.

What we'd say is this. Rate cycles are the backdrop for almost everything in Australian investing: bank margins, property valuations, bond yields, the Aussie dollar, consumer stocks. Understanding how the RBA reads inflation data, and how markets price the outcomes, is a core skill.

The one point worth underlining: even at "95%", a hike isn't locked in. That's why the August jobs numbers, due on Thursday 24 September, matter.

## What to watch
- Thursday 24 September 2026, 11:30am AEST: ABS Labour Force, August data (ABS release calendar)
- Tuesday 29 September 2026, 2:30pm AEST: RBA cash rate decision; Governor's media conference 3:30pm (RBA)
- Wednesday 30 September 2026, 11:30am AEST: ABS August CPI release (ABS release calendar)

## Sources

1. Reserve Bank of Australia — Cash Rate Target (22 Sep 2026) — https://www.rba.gov.au/statistics/cash-rate/
2. Reserve Bank of Australia — Opening Statement to the House of Representatives Standing Committee on Economics, Michele Bullock (18 Sep 2026) — https://www.rba.gov.au/speeches/2026/sp-gov-2026-09-18.html
3. Reserve Bank of Australia — 2026 Monetary Policy Board meeting dates — https://www.rba.gov.au/schedules-events/board-meeting-schedules.html
4. Reserve Bank of Australia — Media Conference, Monetary Policy Decision — https://www.rba.gov.au/monetary-policy/media-conferences/
5. Australian Bureau of Statistics — CPI rose 3.5% in the year to July 2026 (26 Aug 2026) — https://www.abs.gov.au/media-centre/media-releases/cpi-rose-35-year-july-2026
6. Australian Bureau of Statistics — Consumer Price Index, Australia, July 2026 (26 Aug 2026) — https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release
7. Australian Bureau of Statistics — FAQs about the measurement of housing in the CPI and Selected Living Cost Indexes — https://www.abs.gov.au/articles/frequently-asked-questions-faqs-about-measurement-housing-consumer-price-index-cpi-and-selected-living-cost-indexes-slcis
8. Australian Bureau of Statistics — Release calendar, September 2026 — https://www.abs.gov.au/release-calendar/future-releases/202609
9. Cotality — Housing downturn spreads as 93% of capital city suburbs record winter value falls (1 Sep 2026) — https://www.cotality.com/au/insights/articles/housing-downturn-spreads-as-93-of-capital-city-suburbs-record-winter-value-falls
10. Westpac — Westpac brings forward rate hike call to September (21 Sep 2026) — https://www.westpac.com.au/news/making-news/2026/09/westpac-brings-forward-rate-hike-call-to-september/
11. Canstar — All four big banks expect RBA hike at next meeting (21 Sep 2026) — https://www.canstar.com.au/news/and-then-there-were-4-anz-now-expects-rba-hike-next-week/
12. Mortgage Professional Australia — CBA, ANZ join Westpac, NAB in tipping RBA hike (21 Sep 2026) — https://www.mpamag.com/au/news/general/cba-anz-join-westpac-nab-in-tipping-rba-hike/590401
13. Broker Daily — Banks recast rate hike forecasts to be harder and faster (22 Sep 2026) — https://www.brokerdaily.au/economy/22039-banks-recast-rate-hike-forecasts-to-be-harder-and-faster
14. ABC News — RBA Governor talks interest rates at parliamentary hearing (18 Sep 2026) — https://www.abc.net.au/news/2026-09-18/rba-governor-talks-interest-rates-at-parliamentary-hearing/107167676

## Disclaimer

Property is not a financial product. No guarantees are made regarding future performance or returns. This is general information only and does not consider your objectives, financial situation or needs — seek independent financial, legal and taxation advice. Eligibility & T&Cs apply.


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# 2026 Federal Budget: negative gearing, capital gains tax and the new-build carve-out, explained

URL: https://www.investingplatform.com.au/blog/2026-federal-budget-negative-gearing-new-builds-explained
Author: Investing Platform
Published: 2026-09-16

Every date and rule below is taken from the Australian Government's Budget 2026-27 papers or Australian Taxation Office guidance; any other source is named where it is used. Last reviewed 23 September 2026.

In one paragraph: On 12 May 2026 the Australian Government announced that negative gearing on residential property will be limited to eligible new builds, and that the 50 per cent capital gains tax (CGT) discount will be replaced with cost base indexation and a minimum 30 per cent tax rate on gains, both from 1 July 2027. Established residential property bought after the announcement at 7:30pm AEST on 12 May 2026 loses negative gearing from 1 July 2027. Property held at that time is exempt from the negative gearing changes. Investors in eligible new builds keep negative gearing and can choose between the 50 per cent discount and the new arrangements. The Australian Taxation Office describes the measures as now law (ATO; Budget 2026-27).

## What did the 2026-27 Federal Budget change for property investors?

Three things, all announced on 12 May 2026 and set out in the Budget papers and on the ATO's new legislation page.

1. Negative gearing is limited to new builds. From 1 July 2027, losses on established residential investment property purchased from 7:30pm AEST on 12 May 2026 can only be deducted against income from residential property, including capital gains. They can no longer be deducted against wages or other income. Unused losses can be carried forward to offset residential property income in future years (Budget 2026-27 negative gearing and CGT explainer).
2. The 50 per cent CGT discount is replaced. From 1 July 2027, the 50 per cent discount for individuals, trusts and partnerships is replaced with cost base indexation for inflation and a minimum tax rate of 30 per cent on gains. The Government describes the aim as restoring the taxation of real gains. The change applies only to gains that accrue after 1 July 2027 (Budget 2026-27; ATO).
3. Eligible new builds are carved out. Negative gearing continues for eligible new builds, and investors in new builds can choose the 50 per cent CGT discount or the new arrangements (Budget 2026-27).

## When do the changes start?
- Cut-off: the announcement at 7:30pm AEST on 12 May 2026 (ATO).
- Negative gearing restriction on established property: 1 July 2027. Established property purchased between the announcement and 30 June 2027 may be negatively geared during that period, but not from 1 July 2027 (Budget 2026-27 explainer).
- CGT changes: 1 July 2027, on gains accruing from that date (Budget 2026-27 explainer).

## Who is grandfathered?

Properties held at the announcement, including where a contract had been entered into but not yet settled, can continue to be negatively geared in future years (Budget 2026-27 explainer). The ATO states that the impact of the changes on existing investments will be limited, and that the CGT reforms will only apply to gains that accrue after 1 July 2027 (ATO). For CGT, assets owned before 1 July 2027 and sold after that date are treated under current arrangements on the gains made before 1 July 2027 (Budget 2026-27 explainer).

Other exclusions and exemptions in the Budget papers: properties in widely held trusts (for example, most managed investment trusts) and superannuation funds, including SMSFs, are excluded from the negative gearing changes; build-to-rent developments and private investors supporting government housing programs, for example through the provision of affordable housing, have targeted exemptions (Budget Paper No. 2, 2026-27; Budget 2026-27 explainer). Confirm the treatment of any structure with a tax adviser.

## What counts as a new build?

This is the definition that decides which side of the line a property sits on, and it is narrower than the headline. From the Budget 2026-27 negative gearing and CGT explainer:
- A new build includes a dwelling constructed on vacant land, and dwellings created where an existing property is demolished and replaced with a greater number of dwellings.
- Knock-down rebuilds or substantial renovations that do not increase supply are not eligible. A granny flat built next to an established property is not eligible.
- A new build cannot have been previously sold, unless it was first owned by the builder and not occupied for more than 12 months. Subsequent purchasers of the dwelling cannot access the 50 per cent CGT discount or negative gearing in relation to that property.
- The Government notes this is similar to how stamp duty exemptions apply to new builds under some state-based arrangements.

The practical effect: "new property" is now a tax category with edges. Two similar dwellings on the same street can sit on opposite sides of the line depending on whether the buyer is the first purchaser after the builder.

## What happens to the CGT discount for new-build investors?

Investors who buy new builds can choose either the 50 per cent CGT discount or indexation and the minimum tax when they sell the property (Budget 2026-27 explainer). For other CGT assets held by individuals, partnerships and trusts for at least 12 months, the new arrangements apply to gains accruing from 1 July 2027.

## Does this apply to commercial property, shares or superannuation?

The negative gearing changes apply only to residential property. Commercial property and other asset classes, such as shares, remain subject to the existing negative gearing arrangements. The CGT changes apply to all CGT assets, including property and shares, held by individuals, partnerships and trusts for at least 12 months (Budget 2026-27 explainer). Superannuation funds are excluded from the negative gearing changes (Budget 2026-27 explainer). Seek advice on your own circumstances.

## What are the risks the concession does not remove?

The tax setting does not change the nature of buying property before it is built. Buyers of new builds still carry completion risk (the developer must finish), timing risk (settlement dates move, and finance approvals may not come through), and valuation risk at settlement (the lender values what was built, not what was drawn).

Tax is also only one input into prices. After the Budget, the Commonwealth Bank's economics team lowered its dwelling price growth forecast for the year to December 2026 from 5 per cent to 3 per cent. CBA's Senior Economist Trent Saunders said the slowdown primarily reflects higher mortgage rates, and estimated the policy changes would subtract 0.6 percentage points from 2026 price growth (CBA, 13 May 2026). That is one bank's forecast, not a fact about the future.

## What does this mean for Investing Platform users?

Investing Platform lists brand-new residential property across New South Wales and Victoria, open to all investors. The Budget has made the difference between brand-new and established property a matter of tax law. We do not provide personal advice and we do not recommend any property. What we can do is put the information about a new development in one place, with the sources behind it.

## Frequently asked questions

Is negative gearing being abolished?
No. It is being limited. From 1 July 2027 it is not available against other income for established residential property bought from 7:30pm AEST on 12 May 2026. It remains available for eligible new builds and for property held at the announcement (Budget 2026-27; ATO).

What about an established investment property bought in June 2026?
Under the Budget explainer, it may be negatively geared until 30 June 2027. From 1 July 2027, losses on it can only be deducted against residential property income, including capital gains, and any excess carried forward.

What if a contract was signed before 7:30pm AEST on 12 May 2026 but settled after?
The Budget explainer states that properties held at the announcement include those where a contract had been entered into but not yet settled. Confirm with a tax adviser.

Is a new build bought from a previous owner still a new build for tax?
Generally no. A new build cannot have been previously sold, unless it was first owned by the builder and not occupied for more than 12 months. Subsequent purchasers cannot access the 50 per cent CGT discount or negative gearing on it (Budget 2026-27 explainer).

Do new-build investors lose the 50 per cent CGT discount?
No. They can choose between the 50 per cent discount and indexation with the minimum tax (Budget 2026-27).

Is this law yet?
The ATO's new legislation page describes the measures as now law. Always check the ATO page for the current status.

## Sources

1. Australian Taxation Office — Tax reform: boosting home ownership, reforming negative gearing and capital gains tax — https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/tax-reform-boosting-home-ownership-reforming-negative-gearing-and-capital-gains-tax
2. Australian Government, Budget 2026-27 — Tax reform — https://budget.gov.au/content/04-tax-reform.htm
3. Australian Government, Budget 2026-27 — Tax explainer: Negative Gearing and Capital Gains Tax Reform — https://budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf
4. Australian Government, Budget Paper No. 2: Budget Measures 2026-27 — https://budget.gov.au/content/bp2/download/bp2_2026-27.pdf
5. Commonwealth Bank of Australia — 2026 Budget: updated housing outlook (13 May 2026) — https://www.commbank.com.au/articles/newsroom/2026/05/2026-budget-updated-housing-outlook.html

## Disclaimer

Property is not a financial product. No guarantees are made regarding future performance or returns. This is general information only and does not consider your objectives, financial situation or needs — seek independent financial, legal and taxation advice. Eligibility & T&Cs apply.