Productivity over property

Chalmers redraws the investment map.

It’s official: Jim Chalmers has announced major changes to negative gearing and capital gains tax.

My takeaway is that the new Australian dream is moving investment from property to productivity.

From July 2027, negative gearing on residential property will be limited to new builds only. Existing investors are grandfathered and can keep negatively gearing until they sell. But anyone buying an established property from 7.30pm on Tuesday onwards will lose the benefit after July 2027.

The 50% CGT discount is being replaced with inflation-adjusted indexation “to restore the taxation of real gains”. New-build homes will keep the discount. A minimum 30% tax rate will apply to capital gains from July 2027, and to discretionary trusts from July 2028.

This is a clear message on the housing crisis and intergenerational inequality. It’s also a clear shift pushing investment away from established property and towards productivity, innovation and new supply.

That is a signal to industry. The new Australia wants productivity, and the Government will partner to boost it.

To support that shift, the Budget’s productivity package will cut regulatory costs by $10.2 billion a year and, in Chalmers’ words, “help us attract and absorb more investment, make it easier and quicker to build, and slash compliance costs”. It backs business and R&D through a two-year loss carry-back for companies with up to $1 billion in turnover from July 2026, loss refundability for start-ups from July 2028, a permanent $20,000 instant asset write-off, and a broader R&D Tax Incentive overhaul from July 2028.

Key takeaways

• Negative gearing limited to new builds from July 2027; existing investors grandfathered
• Buyers of established property from 7.30pm on Tuesday lose the benefit after July 2027
• 50% CGT discount replaced with inflation indexation, except for new builds
• 30% minimum tax on capital gains from July 2027, and on family trusts from July 2028
• Investment is being redirected from housing to productive assets
• Two-year loss carry-back for companies with up to $1 billion in turnover from July 2026
• Loss refundability for start-ups from July 2028
• $20,000 instant asset write-off made permanent
• R&D Tax Incentive offset rates for core R&D up 25–50% from July 2028