Negative Gearing and CGT Overhaul Becomes Law — What Property Investors and Self-Employed Borrowers Should Watch

What happened

Australia's long-debated overhaul of negative gearing and capital gains tax (CGT) has now passed into law, according to reporting from Australian Broker. Treasury has indicated that around 85% of the additional tax revenue from the package is expected to come from property investors.

The exact transitional rules and timing will determine how individual investors are affected, and borrowers should confirm specifics with a registered tax adviser. But the direction of travel is clear: the tax treatment of investment property is shifting, and the after-tax economics of holding an investment asset are being recalculated across the market.

Why this matters for borrowers

Negative gearing and CGT settings sit at the heart of how many Australians model an investment purchase. When those settings change, the headline rental yield and the long-term capital position both have to be re-examined. That doesn't make property a worse or better investment in itself — but it does mean the finance behind a purchase carries more weight.

Three practical implications stand out:

• Serviceability becomes the anchor. If tax benefits shift, an investment needs to stand more firmly on its own rental and income footing. Lenders will keep testing borrowers against buffered rates — currently against a backdrop of the RBA cash rate at 4.35% and inflation at 4.0%.
• Loan structure matters more. Interest-only periods, offset arrangements, fixed-versus-variable splits and refinancing timing all influence cash flow once tax assumptions change.
• Self-employed investors face extra complexity. Business owners often hold property inside a mix of personal, trust and company structures. A tax overhaul makes clean, well-documented finance arrangements more valuable.

The MPFG view

MPFG Capital does not provide tax advice — and in a period of legislative change, the first step for any investor is a conversation with their accountant. What we do is structure finance around the real numbers once that tax picture is clear.

For self-employed and small-business investors — including many of our Chinese-community clients — that means Alt Doc and commercial solutions that recognise genuine income across BAS statements, accountant declarations and business cash flow, rather than forcing every investor into a standard PAYG template. As the tax landscape resets, having a lender who can match the loan to the borrower's real structure matters more, not less.

This article is general information only and does not constitute financial, credit or tax advice. Tax outcomes depend on individual circumstances — consult a registered tax adviser. Lending criteria, rates and approval are subject to assessment. Sources: Australian Broker, Australian Treasury, RBA, ABS (June 2026).