Property investors have until Tuesday evening to lock themselves into the tax breaks current landlords enjoy before they are reduced or scrapped entirely in a seismic reform.
But senior real estate figures have warned it’s either too late or too risky for buyers to try and beat the deadline, as the hourglass runs out before Treasurer Jim Chalmers’s official reveal.
The Albanese government is set to reform tax laws for property investors in Tuesday’s budget, in what has been described as an effort to rectify intergenerational wealth inequalities and bring more first-home buyers into the market.
It is understood investment properties bought after federal budget night would still be eligible for the same tax scheme currently in place – but only until next year.
Some real estate figures have told news.com.au that clients have brought forward the exchange of contracts to secure long-term negative gearing and capital gains (CGT) discounts.
Auctioneer Tom Panos, however, said he had received hundreds of messages on social media from people asking if they should buy an investment property before Tuesday.
His answer was simple, “absolutely not”, unless they were already deep into the sale process.
“It’s not like ordering Uber Eats,” he said.
Mr Panos called the reforms an “ambush” after Anthony Albanese repeatedly stated there was no intention to pursue the changes on the campaign trail ahead of last year’s election.
On Sunday, news.com.au revealed negative gearing tax concessions – which allow losses on rental homes to be offset against income – would be scrapped for existing properties but remain in place for new-build dwellings.
Current landlords and investors would be spared from the changes, which would be grandfathered to before budget night.
Mr Albanese explained on Monday “any responsible government” would act on the issue of young people being locked out from getting “a crack at home ownership”.
Jennie Tonner, president of the Australian Institute of Conveyancers’ NSW division, said leaks over the weekend had calmed down some investors who had been intent on selling.
“I definitely have had an uptake with clients wanting to try and get their investment property sold before the budget,” she said.
“There’s definitely been a lot of concern about what Labor was going to do.”
Mr Panos and Real Estate Institute of NSW president Tom McGlynn said changes to negative gearing would all but kill off the trend of younger Australians building wealth via rentvesting.
The Australian Financial Review on Monday reported the government would allow existing properties bought after Tuesday to be negatively geared – but only until July 2027.
It also reported a similar scheme would apply in regards to CGT, which is due to be wound back to a pre-1999 indexation model.
Investors would still be able to claim the current 50 per cent CGT discount on properties bought after budget night until next July.
Under tax laws, an asset must be held for 12 months before the CGT discount can apply, meaning there would only be a small window for existing properties to be bought – and sold – in order to benefit from this concession.
‘No benefit’ of grace period
The move has been referred to as a “transition period” to prevent a rush on the market, but anyone who does buy after Tuesday would only receive the tax benefits for a matter of months.
Ms Tonner disagreed with the reforms, believing they would smash investors and create barriers to climbing the property ladder.
But as for a late flurry of people trying to do a deal before Tuesday, she said: “I think it’s too late now, to be honest with you.”
Mr McGlynn also did not expect a buyer boom before or immediately after Tuesday’s budget, saying the reforms would dampen consumer sentiment.
He said the leaked “grace period” would be no more than a short-term sweetener to make the changes more palatable for an already suffering electorate.
“I don’t see the benefit of this whatsoever,” he said.
“No one is going to be buying an investment property just to be able to get one year worth of tax savings.”
Louise Hethorn, a conveyancer at Your Property Lawyers, said one client had brought forward contract exchanges for a sale to get in before Tuesday’s deadline.
“I did have some (other clients) return over the weekend and I’ve referred them to other colleagues because I’m at capacity,” she said.
Ms Hethorn said she did not expect a huge shift in the market, saying her workload had been down compared to this time in 2025: “There’s a lot of investors out there that don’t sell property”.
“That’s their golden rule. They don’t sell property,” she said.
“And there’s $12.5 trillion worth of property (in Australia) and a lot of that is equity.”
Not the desired effect
Mr McGlynn said that although many landlords were in a “comfortable position” they were ‘by no means extremely wealthy”.
He did not believe the changes would have the desired effect of allowing more young people to buy a home, adding that a lack of supply was the most pressing issue.
“The younger generation is only just getting their grips on some different strategies to be able to get them into the market. And then things are changed again,” he said.
“And you can’t really address this intergenerational unfairness unless you look at the other end of the spectrum, things like stamp duty.”
Speaking on Sky News over the weekend, Mr Chalmers was pushed on whether the changes represented the biggest broken promise since Julia Gillard’s no carbon tax pledge.
“The status quo in housing and in tax is unfair and unacceptable, and so any responsible government like ours will respond to that,’’ he said.
Ms Tonner was concerned about how the reforms would impact housing markets in regional areas, which were popular investment destinations for younger people trying to break into the market.
She also said the majority of people who owned investments had bought one or two in order to fund their retirement, and were nowhere near the super wealthy class.
“I just don’t understand why you would change that,” she said.
Mr Panos said everyone was still speculating on the final details, and it was possible investors might find the new settings appealing.
“You might actually find that the new rules are so attractive that you want to buy a brand new property,” he said.
Broker Lachlan Williams expected mum and dad investors of Australia to be the most affected by the changes, while the “mega investors” who use trusts and companies as vehicles would be able to hoover up homes in a cooling market.
“It’s going to be a pullback in the market, maybe not a crash per se, but clearly it’s a buyer’s market,” he said.
“And that just gives opportunity for some of these big guys.
“Just like anything really, it’s always the ones with the cash that benefit.”