r/AusHENRY

As per budget paper (quote below), there will be a minimum 30% tax on capital gains after being indexed. Only capital gains up to July 2027 will be given the 50% discount.

Well there goes that strategy of holding CG assets until retirement lol. Unless you can claim the pension (so that means you max out your PPOR?)

Also, I only saw a mention of killing negative gearing for established houses. I assume this means you can still debt recycle and claim negative gearing on shares?, still available as pointed out below.

>Commercial property and other asset classes, such as shares, will remain subject to existing arrangements

That makes super all the more important given you'll probably want to max out the transfer balance cap in the transition to retirement. Concessional contributions will be gold.

>Introducing a 30 per cent minimum tax on real capital gains

>The Government is also introducing a 30 per cent minimum tax on real capital gains income earned from 1 July 2027. The minimum tax will reduce incentives to defer the sale of assets to periods when other income and marginal tax rates are low. This will support a more consistent taxation of lifetime income by aligning the tax rate on real capital gains with the marginal tax rate faced by the average worker on incomes from $45,000 to $135,000.

>Income support recipients, including pensioners, will be exempt from the minimum tax, ensuring people with low income and low wealth are not disadvantaged. The capital gains of people who are already subject to at least the 30 per cent marginal rate on their non-capital gains income will not be affected by the minimum tax. The 30 per cent minimum is aligned with the minimum tax being introduced on discretionary trusts.

>The minimum tax rate reduces the benefits of timing the realisation of capital gains to minimise tax paid. This ensures that affected taxpayers are subject to a tax rate that is closer to the marginal rate they faced during their working life. If applied in 2022–23, over 95 per cent of net capital gains income would have been earned by people who are either not affected by the minimum tax or who had a marginal tax rate of more than 30 per cent during their working lives. In 2022–23, about 70 per cent of salary and wage earners faced a marginal rate of 30 per cent or higher.

>The minimum tax on real capital gains also mitigates against potential lock-in effects that can result in prolonged holding of assets to reduce tax. The minimum tax reduces incentives for investors to delay selling assets to when they have lower marginal tax rates, for example at retirement, improving the allocation of resources across the economy and supporting productivity growth.

https://budget.gov.au/content/bp1/download/bp1_2026-27.pdf

Theres been a lot of talk about the proposed new changes under the budget, particularly the change to discount on CGT for shares and ETFs.

Now it's been announced, how does it impact your strategy?

For those that are DCA ETFs weekly is that now no longer viable for you? Do you focus more on super? Are you going to pivot to new build investment properties?

Curious hearing opinions that aren't just arguing over what it actually means or just complaining about the changes.

Will you sell before 2027? Hold your negative gear IP? And then what once it’s positive? Will you now start to invest in new builds? Or will the demand for new builds increase further driving building prices up, no longer making this a viable investment?

We will try to limit any posts on the budget/potential CGT changes to 1 a day unless it is a novel discussion that hasn't already been answered to death.

Posts will generally get removed as a duplicate question.

We've also banned 4 accounts over the last day or two for abusive or disrespectful language. We've locked the comments on a thread that was starting to derail.

Please keep conversations respectful and please continue to report any comments that don't fit this.

Happy to take any feedback or questions you may have on the modding approach here.

Afterall it is a community effort to keep this place safe for respectful conversations.

Everyone is losing their mind overnight... Let's run the actual numbers before we panic.

The headlines are screaming about the end of negative gearing and the CGT discount. What they're missing is an important mechanic buried in the budget paper, your quarantined losses don't disappear. They accumulate and come back to offset your capital gain at exit. That changes the math.

Here's what the reform actually does:

• Negative gearing losses can no longer reduce your wage income immediately. They get quarantined and carried forward.
• The 50% CGT discount is replaced with CPI indexation, you only pay tax on the real gain above inflation.
• A 30% minimum tax floor applies at exit.

I've worked out two investment scenarios with different growth rates and holding periods and calculated the impact to the total return to the investor under the old and new tax regime.

Open to hear people's thoughts on this?

__________________________________________________________________________________________________

Scenario 1 - Assumptions

• $650k property, $100k deposit, $550k loan @ 6.5%
• Interest: $550k × 6.5% = $35,750/yr
• Rent: $650k × 5% = $32,500/yr (5% yield)
  • Less expenses $6,750 = $25,750 net rental income
  • Shortfall: $35,750 − $25,750 = $10k negatively geared
• 5 year hold
  • 20% CAGR, sale price $1.3m
• Marginal rate 47%, CPI 2.5%
• Indexed cost base: $650k × 1.025^5 = $735.4k

 Pre-Reform

• Annual tax refund on shortfall: $10k × 47% = $4,700/yr
  • Effective out of pocket: $10k − $4.7k = $5,300/yr
  • Total hold costs over 5 years: $5,300 × 5 = $26,500
• Nominal gain: $1.3m − $650k = $650k
  • CGT: $650k × 50% discount × 47% = $152,750
• Net equity at sale: $1.3m − $550k (loan) − $152,750 (CGT) = $597,250
• Net wealth: $597,250 − $100k (deposit) − $26,500 (hold costs) = $470,750

 Post-Reform

• No tax refund,  losses quarantined, zero immediate benefit, full $10k out of pocket every year
• Total hold costs over 5 years: $10k × 5 = $50,000
  • At exit, losses come back and hit the gain first
• Real gain after indexation: $1.3m − $735,400 = $564,600
• Less quarantined losses: $564,600 − $50,000 = $514,600 taxable
• CGT: $514,600 × 47% = $241,900 (47% exceeds 30% floor so full rate applies)
• Net equity at sale: $1.3m − $550k (loan) − $241,900 (CGT) = $508,100
• Net wealth: $508,100 − $100k (deposit) − $50k (hold costs) = $358,100

The damage

• Net wealth: $470,750 vs $358,100 = $112,650 worse off

__________________________________________________________________________________________________

Scenario 2

Now, lets assume 50% total growth over 3 years (16.6% CAGR). Ultimate sale price of $975k

Pre-Reform

• Annual tax refund on shortfall: $10k × 47% = $4,700/yr
  • Effective out of pocket: $10k − $4.7k = $5,300/yr
  • Total hold costs over 3 years: $5,300 × 3 = $15,900
• Nominal gain: $975k − $650k = $325k
  • CGT: $325k × 50% discount × 47% = $76,375
• Net equity at sale: $975k − $550k (loan) − $76,375 (CGT) = $348,625
• Net wealth: $348,625 − $100k (deposit) − $15,900 (hold costs) = $232,725

 Post-Reform

• No tax refund, losses quarantined, zero immediate benefit, full $10k out of pocket every year
• Total hold costs over 3 years: $10k × 3 = $30,000
  • At exit, losses come back and hit the gain first
• Real gain after indexation: $975k − $700k = $275k
• Less quarantined losses: $275k − $30k = $245k taxable
• CGT: $245k × 47% = $115,150 (47% exceeds 30% floor so full rate applies)
• Net equity at sale: $975k − $550k (loan) − $115,150 (CGT) = $309,850
• Net wealth: $309,850 − $100k (deposit) − $30k (hold costs) = $179,850

 The damage

• Net wealth: $232,725 vs $179,850 = $52,875 worse off

The negative gearing changes will get most of the headlines, but the CGT changes are probably the sleeper issue. From 1 July 2027, it looks like the 50% CGT discount is being replaced with indexation for CGT assets more broadly, not just investment properties.

That matters because a lot of renters trying to buy are not sitting on piles of cash in a savings account. Many are using ETFs and shares to try and build their deposit faster while house prices are moving.

So while the policy is framed around helping younger Australians into housing, there’s an awkward trade off here. The same person renting, saving aggressively and investing to build a deposit will pay much more tax under the new rules.

I get the argument for reducing distortions in property. But applying the CGT change more broadly feels like a pretty big punch in the gut for the exact cohort trying to close the deposit gap without relying on the government guarantee.

How do I get to a mill in my account?

*Single parent of a toddler, $50k in debt (consolidated personal loan), renting, professional earning $146k before taxes, hoping to go up to $250k + a year by 2028. Thank you.

Just wanted to celebrate with a community that understands - hit a super milestone this pay that I’m really proud of but feel awkward sharing with friends/family, $500k 41F! Yay! Come from a working class family, worked hard, contributed extra since my first pay outta uni (thanks for the advice mum and dad!).

Now the cgt discount has disappeared does it make more sense to build your portfolio in a business, so your tax is effectively capped at the business rate?

Hi HENRYs,

My name is Izzy and I’m the founder of Henry Advisory, a financial advice firm in Australia built specifically for HENRYs.

This community actually played a big role in shaping the business. In short, your feedback on financial advisers resonated - blanket ongoing fees, no one-off services, people being pushed into model portfolios which are expensive and don’t perform, the lack of property advice within the space. So I took the leap and started my own firm which aims to provide superior and transparent advice with a pricing methodology which aims to price at the point of most impact - not diminish your long term returns.

The mods have kindly invited me to run an “Ask Me Anything” and with the budget being announced tomorrow we will host it next Tuesday. This session will primarily focus on the budget - but feel free to ask about:
- investing
- super
- asset allocation
- strategies
- mistakes I see HENRYs making
- what is Henry advisory

Ask away.

AMA happening on Tuesday 19/05/26 at 4pm-7pm.

51 now. Corporate background but recently changed to minimum wage job in retail sales. Really enjoying job now so I'm not going back. But...

368k in super, own house outright, no debt. Small super contributions now, approx 800 a month from job. Am hoping to retire in 9 years - do u think this is actually doable or am I off with the fairies. Not looking to travel the world and such just a comfortable retirement- eat out from time to time, gardening, I'm mainly a stay at home type.

Everybody is complaining about CGT changes, but id reckon abolishing negative gearing is going to affect the market and Henrys more.

As an example under current regime.

lets say an investment property purchase for $ 1 mill

tack on another $50k for stamp duties et all.

Interest costs on that amount is approx $72k/year assuming interest only ( yes i know people might borrow less, but then at the end of the day even if you borrow 80%, the remaining funds are coming out of either another offset or if held in cash, there is the opportunity cost) .

Assuming $700/week rental , that is around $27k net rental ( assuming occupancy for full 52 weeks, almost a holy grail)

Assuming general upkeep as another $5k, thats $50k/year as holding costs .

With negative gearing , and with the aid of a dep schedule, that holding costs for a 47% tax bracket would be $26,500p.a .

So say after holding for 5 years and you sell it for $ 1.3 mill, you are still looking at a loss , as these last 5 years has a holding cost of $250k in total, so that measly $50k is going to be eaten up in selling costs.

With neg gearing the holding costs would have been $132k, so a much more palatable $168k profit

If you sell for $1.5 mill, or after a 50% gain, that would be $500k gain, assuming inflation at 5%, that would be 25% CGT rebate or a taxable profit of $400k, net profit of $220k or thereabouts after tax , still a loss as the last 5 years holding costs were $250k.

With negative gearing and current 50% cgt discount, the profit would have been much higher , around $120k tax , and a net gain of $380k.

Am i on the right track, anything Im missing here?

35M, married, two kids, trying to work out what to actually do with these new budget changes.

The core question I couldn't find a straight answer to: is it still worth buying an established investment property, or should I be looking at knock-down/rebuild, parking cash in offset, going heavy on shares, or some combination? Every calculator I found either ignored the new CGT/negative gearing rules or was too simple to model anything realistic.

So I built one.

It models your PPOR mortgage with offset, investment properties (standard rental and KDR with the new Budget 2026 tax treatment, established vs new build vs grandfathered), shares with DRP and franking credits, capital works and repairs, and CGT cost base correctly split at the July 2027 transition. You can stack multiple properties and run them side by side.

Link

I'm not a financial advisor, I'm just an IT Project Manager. The irony of all this scope creep on a 'quick calculator' is not lost on me.

There are probably bugs. If you find one, drop it in the comments and I'll fix and push a new version.

Would be so happy to make something useful for the community, especially with all this uncertainty!

Tonight's Budget announced that negative gearing will be limited to new builds from 1 July 2027, but with grandfathering for all properties "HELD before Budget night" (12 May 2026).

My situation: I bought my house ~5years ago. I rented it out for the first 4 years (and negatively geared it during that time). For the last 1 year I've been living in it as my primary residence — so I'm not currently negatively gearing it.

My question is: if I move out and rent it again after 1 July 2027, will I still have access to full negative gearing under the grandfathering rules?

How do these changes affect existing PPOR owners who have held their properties BEFORE 12 May 2026, however are yet to rent out their properties? I am assuming there would be thousands of people who purchased their houses with the view of renting it out in the future due to life changes etc.

Hi, looking for some guidance on how to simplify the situation and get some breathing space. I am 43M, single income, wife SAHM, one toddler. Moved to Australia 8 years back.

Current salary is A$343k pa + super + 10k RSUs. Though base is 250k paid fortnightly. Have two IPs, both being negatively geared cost me in total 25k pa (of which i get 20% or so back in tax refund - as properties are jointly owned by me and my wife). Both the properties were bought as PPOR but when I moved cities they became IP. The properties are worth 2.2m, with outstanding loan of 1.1m. I rent currently in a 3rd city. Have a shares portfolio of 40k as well.

The problem is that with this inflation, i still find myself struggling to make ends meet month by month, unless I dig into my savings (from the annual bonus that I get, close to 35-45K after tax). Do not feel HIE at all.

I have tried to get some professional financial advice, but one FA told me that we can only help you if you can spare a $1000 a month, and another said that we can not advice on property but can advise you on your finances and tax. I am looking for someone who can help me take some good decisions to 1)- create some breathing space in my monthly expense 2)- Advise on if I should carry the two IPs or simplify/cash out.

PS: i am very grateful and understand that there are so many people who are much worse off and are finding it difficult to buy everyday essentials. My frustration is that even with my income i am living paycheck to paycheck, so what do i need to do differently.

Hi all,

I just checked and my current IP is hovering on neutral or just positively geared. Any ideas whether this will affect grandfathering? If it’s calc’d at eofy, I still have time to withdraw funds to make sure it’s negative for the FY.

Can’t seem to find info about it. Thanks in advance.

If the contract was paying 24.2% more AFTER tax and AFTER accounting for 12 public holidays, 5 sick and 20 AL, would you take it?

Contact is with Department of Education - 12 months

I had a quick look around and have seen consistent feedback around not paying off your PPOR. This is the complete opposite of what I'm attempting and now I'm wondering what others would do in our situation.

My husband is on around 270 base and usually gets around 150k bonus or so

I am on 230 base plus eligible for 50 percent bonus yearly. It never is 50 usually 30-45 percent

I'm in my early 40s and I want to be a stay at home wife. I absolutely hate what I do but I'm good at it. This is why I was thinking of working for 3-5 years to cover the PPOR (we don't have offset but unlimited redraw). Plan was minimum repayment from his salary and live off the rest. All of mine goes into the mortgage. All bonuses to go into the mortgage. Once I have the security of no mortgage the rest to go into a high interest savings account or ETF.

Mortgage at the moment is around 1.23 house is worth around 2.6

Essentially my goal is to do my bit and then enjoy mooching off my husband.

I'd love to hear opinions.

There is a lot said in here about Division 293. I'm well read on it.

My question, is do exams and professional development costs and courses that are tax deductible also reduce division 293 liability? I've had to spend substantial amounts on these things this financial year (about $30-40,000 worth). Trying to decide if that makes it a good time to use up all carry-forward concessions remaining. I'd be paying 293 on all of that normally, but likely not if these deductible claims reduce my 293 liability below the $250,000 threshold.