Am I grandfathered?
One evening in May 2026 split every residential property in the country into two tax regimes. Tell us when you signed and we'll tell you which one you're in, straight from the words of the Act.
The day you exchanged, not the day you settled. Settlement can fall either side of the cutoff without changing the answer.
Ordinary family trusts get no exemption here, despite what the name might suggest. Only widely held unit trusts and complying super funds do.
Start with the contract date
Which side of the cutoff are you on?
Fill in when you signed and we'll tell you which set of rules this property falls under, and what that means from 1 July 2027.
What actually changed
From 1 July 2027, a net loss on residential property stops reducing your salary and other income. Instead it gets quarantined: held back, applied against residential capital gains when you eventually sell, and rolled forward year to year until something absorbs it. The deduction is deferred rather than taken away.
Whether that happens to a given property comes down to when you last acquired your interest in it. Before 7.30pm ACT time on 12 May 2026 and nothing changes. At or after it, and the property falls under the new treatment for good, since the test is about acquisition rather than about any given income year.
Two things get reported wrongly often enough to be worth naming. The cutoff is a contract test, so a property that exchanged before the deadline and settled months later is grandfathered. And build-to-rent is not exempt on the face of the Act, whatever you may have read.
Common questions
- Am I grandfathered for negative gearing?
- You are if you last acquired your interest in the property before 7.30pm ACT time on 12 May 2026. The test looks at the day you signed the contract, not the day you settled, so a contract signed in April 2026 that settled in September 2026 is still grandfathered. That comes from s 26-155(2)(a) of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, read with the contract-timing rule in s 26-155(3).
- What is the negative gearing cutoff date in Australia?
- 7.30pm ACT time on 12 May 2026. The time matters, not just the date: a contract signed at 6pm on 12 May 2026 is grandfathered and one signed at 8pm that evening is not. The Act expresses it as legal time in the Australian Capital Territory, which in May is the same as Sydney and Melbourne time because daylight saving is not in effect.
- Does the negative gearing change apply to contracts or settlement?
- Contracts. Section 26-155(3) overrides the usual CGT timing rule for this purpose and says that where you acquire a dwelling under a contract, you hold your ownership interest from the time you enter into the contract. Settlement date does not affect which side of the cutoff you land on.
- When do the new negative gearing rules start?
- The 2027-28 income year, so from 1 July 2027. Nothing changes before then, and the rules for earlier income years continue to apply to those years.
- Are new builds exempt from the negative gearing changes?
- Nobody can answer that yet, and any source telling you otherwise is guessing. Section 26-155(2)(b) does carve out a "new residential dwelling", but s 26-160(3) and (4) leave that term to be determined by the Minister through a legislative instrument, and no instrument has been made. Until one is, the carve-out cannot be relied on.
- Is build-to-rent exempt from the negative gearing changes?
- Not on the face of the Act, despite several published summaries saying so. Build-to-rent and private investment in government housing programs could only ever become exempt through a determination under s 26-155(2)(c), and the Minister can only make one where satisfied it assists social or affordable housing, or housing outcomes for particular disadvantaged groups, under s 26-155(3A).
- Does the change apply to commercial property?
- No. Section 26-155(1) reaches amounts relating to using or holding residential dwellings as residential accommodation. Commercial, retail and industrial property sit outside it entirely, whatever the acquisition date.
- Do family trusts avoid the negative gearing changes?
- No. Section 26-155(4) exempts a widely held unit trust as defined in s 272-105 of Schedule 2F to the Income Tax Assessment Act 1936, and a complying superannuation entity. An ordinary discretionary or family trust is neither, and neither is a company.
- Is the quarantined loss lost permanently?
- No, it is deferred rather than destroyed. A quarantined amount stops reducing your other income in the year it arises, but it applies against deferred residential capital gains and then residential capital gains in the s 102-5 method statement, and whatever survives that rolls into the next year's residential deduction pool to be tested again.
- Is negative gearing worked out per property or across a portfolio?
- Across everything at once. Section 26-155(1) totals the deductions and the assessable income relating to residential dwellings and only quarantines the net excess, and s 26-155(6) reduces that excess first by any surplus from non-quarantined dwellings. So rental profit on a grandfathered property absorbs losses from one on the new rules before anything is quarantined.
General information, not tax advice. This tool reads the acquisition test in s 26-155 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 and nothing else; it does not know your income, your other properties, or anything else that decides what you can actually claim. Quarantining is worked out across your whole portfolio rather than property by property, so a single answer here will not tell you your position. Talk to a registered tax agent before acting on it.