CGT and Negative Gearing Reforms Hit Parliament This Week

The first legislative bill for Labor's housing tax overhaul drops Thursday — here's what property investors and borrowers need to know.

What's in the First Bill?

The wait for legislative detail is almost over. Prime Minister Anthony Albanese confirmed on Monday 25 May that the first bill implementing Labor's capital gains tax (CGT) and negative gearing changes — announced in the 2026–27 federal budget — will be introduced to the House of Representatives this Thursday, 28 May.

The Adviser reports that the opening legislation will contain four core elements: changes to the CGT discount, the proposed restriction of negative gearing to new builds only, a new $250 Working Australian Tax Offset, and a standard $1,000 tax deduction option. Albanese stressed the bill would be "tightly focused" on these headline items, with a second, more detailed tranche of legislation expected later in the year.

That second bill will cover the technical implementation of the changes, any sector-specific carve-outs, and adjustments to the taxation of discretionary trusts — all subject to further Treasury consultation. The Prime Minister did not reveal whether the elements in both bills would ultimately need to pass as a single package.

From a borrower's perspective, the two most impactful changes in the first bill are the CGT and negative gearing reforms. Restricting negative gearing to new builds means investors purchasing existing properties would no longer be able to offset rental losses against their other income. Combined with proposed changes to the CGT discount — which industry groups describe as a move to remove the discount across all assets — this could significantly alter the after-tax returns for property investors.

Carve-Outs Could Go Further Than Tech

One development worth watching closely: the carve-outs to the higher CGT rate look set to be broader than the tech sector focus flagged on budget night.

Albanese confirmed that adjustments to the CGT discount changes "would not just be confined to the tech sector," signalling that small businesses and other parts of the economy could qualify for exemptions. Treasury is already consulting beyond the Tech Council of Australia — engaging with the Council of Small Business Organisations Australia (COSBOA) and the Australian Chamber of Commerce and Industry (ACCI) as well.

This matters for a significant slice of the property-owning population. Mortgage brokers, accountants, tradespeople, and other small business operators who hold commercial property — or who have assets in discretionary trust structures — are paying close attention to where those carve-outs ultimately land. The trust changes will be handled in the second tranche, following further consultation.

The Adviser notes that members of the mortgage broking and fintech sectors made a significant push on social media last week to highlight the negative impacts of the proposed tax changes on small business owners and borrowers. That industry mobilisation appears to have contributed to the government's public acknowledgement that consultation would extend beyond the tech sector.

What Property Owners Should Do While Parliament Debates

The CGT and negative gearing changes are not law yet. They face a challenging path through Parliament, particularly in the Senate. The Greens hold a critical bloc and are already pushing for deeper cuts to investor tax concessions than Labor has proposed. Early talks are underway, but the Greens have yet to guarantee support and are resisting Labor's preference to skip a Senate inquiry — raising the risk of delays and further amendments as the legislation progresses.

Sitting entirely on the sidelines is not necessarily the right move in the meantime. Here is what is worth doing now:

**Review your investment loan structure.** If you hold investment property, the shift toward new builds for negative gearing purposes changes the calculus on your existing loans. Check whether your current rate still makes sense — compare [investor home loan options](/home-loans/investor) and model what a lower rate could do for your cash flow while you wait for legislative certainty.

**Model the numbers before buying.** If you are considering acquiring an investment property, use a [borrowing power calculator](/calculators/borrowing-power) to understand your capacity under current conditions. Factor in the potential impact of the negative gearing changes — particularly the difference in tax treatment between existing and new-build properties — before committing.

**Consider refinancing.** Even outside the investment context, this is a good time to make sure your mortgage is working as hard as possible for you. A [refinance savings estimate](/calculators/refinance-savings) can show you whether switching lenders or loan products would materially improve your position.

**First home buyers: watch for market signals.** If some investors pull back from purchasing existing property in response to the tax changes, competition for established homes could ease. Use our [first home buyer hub](/home-loans/first-home-buyer) to understand the support available and what you would need to qualify.

The Senate Is the Real Wildcard

The Greens' position is the biggest unknown in an already complicated legislative timeline. Albanese framed the purpose of the entire package plainly: "The main objective is not to lock out this and future generations of Australians from ever getting a roof over their head." That goal is not in dispute. How the legislation that implements it emerges from the Senate crossbench is another matter entirely.

There is a real risk that the final legislation looks different from what was announced on budget night — more restrictive in some areas if the Greens extract deeper cuts, or broader in others if carve-outs are extended through negotiation. Treasury's ongoing consultation process means the detail is still very much in flux.

The broker conversations worth having right now are the ones that map out your position under several different scenarios, not just the one currently on the table. Anyone with property interests should stay close to developments and avoid making major financial decisions based solely on the current draft.

[Read the full report at The Adviser](https://www.theadviser.com.au/broker/48475-albanese-locks-in-cgt-negative-gearing-bill-date)