Will investors be better or worse off under new housing tax changes? See what 18 years of data reveals

bymuratdeniz/Getty Images The federal government’s tax reforms are the most significant changes for housing investors Australia has seen since 1999 .

From July 1 2027, three things will change: negatively geared rental income losses won’t be deductible against non-investment income like wages, but will be deductible against capital gains the 50% capital gains tax (CGT) discount will be replaced with an inflation-based CGT deduction (similar to the pre-1999 system) and a minimum CGT rate of 30% will be imposed.

Some have called these housing tax changes broken promises , which risk crashing the housing market .

But others consider it long overdue change to level the playing field for first home buyers.

Amid so much heated debate, how many investors are actually likely to be worse or better off under these changes? That’s what we set out to shed light on.

Our new modelling draws on 920,000 pieces of individual property data – covering all residential sales in Australia and about 75% of new tenant rents – from July 2007 to June 2025.

We used that data to estimate how many of those investments would have ended up paying more or less tax in that 18-year period, if the reforms starting in July 2027 had already been in place.

What our modelling found After comparing the pre- and post-reform tax systems, we found that about 53% of property investments would have paid more tax in total under the new reforms.

This means a surprisingly high proportion, 47%, would have paid the same, or less, in total tax on housing investments.

Each investor’s “total tax” change is their change in rental income tax, plus their change in CGT.

While much of the public focus has been on negative gearing, we found the CGT changes have a bigger impact.

About 50% of investments are negatively geared : in other words, they make losses on rental income.

Most of those investments would have paid more rental income tax if the July 2027 tax changes had been introduced earlier.

But those rental income tax increases tended to be small relative to the CGT changes.