Changes to negative gearing and capital gains tax are being discussed largely as a property investor issue. But for western Sydney, the implications extend well beyond landlords.
From 1 July 2027, negative gearing for residential property will be limited to eligible new builds. Investors purchasing established properties after the 2026 Budget announcement will no longer be able to offset property losses against salary or other non-property income, while existing investments are protected under transitional arrangements.
Capital gains tax arrangements are also changing, altering the after-tax equation for some property investors.
Importantly, the reforms create a stronger incentive to invest in new housing – potentially directing more private capital towards increasing housing supply.
And that matters to business. New housing generates activity across a substantial local supply chain: developers, builders, trades, engineers, planners, suppliers, conveyancers, accountants, mortgage brokers and property managers all benefit when housing moves from planning to construction.
For a rapidly developing region like Western Sydney, the bigger question is whether we can turn that investment appetite into actual housing.
If policy is encouraging private capital towards new residential development, we also need the planning pathways, infrastructure and development capacity to deliver it. For business owners who also invest in property, the changes are another reason to look closely at where capital is working hardest. Money invested in property is capital that cannot simultaneously be invested in a business, equipment or other opportunities.
The fundamentals remain the same: understand the numbers, borrowing capacity, cash flow and risk before committing.