What is Purchase / Contract Timing (Budget Reform Cutoff)?
Quick definition
Whether a property was purchased or contracted before or after 7:30pm AEST on 12 May 2026 — the Budget announcement time that determines which negative gearing rules apply.
InvestingGeneral
Overview
The 2026–27 Federal Budget announced that negative gearing restrictions on established residential properties would apply to purchases made after 7:30pm AEST on 12 May 2026 (Budget night).
Properties already owned, or where a contract was signed before that time, are grandfathered under the existing rules until the property is sold.
This timing also determines CGT treatment: existing holdings retain current CGT rules on gains accrued before 1 July 2027.
The proposed changes are subject to legislation and may be amended before they become law.
Why it matters
- Investors who contracted before the cutoff retain the ability to offset rental losses against salary income.
- Investors who purchased after the cutoff face quarantined losses that can only be offset against rental income or capital gains.
- The distinction affects after-tax cash flow estimates and should be reflected in any investment scenario modelling.