Investors brace for new property tax era as record 3,700 register for Ray White webinar

The webinar, Beyond the Headlines: Understanding the Federal Budget for Investors, attracted unprecedented interest, with 81 per cent of registrations coming directly from customers wanting to understand how the proposed changes to negative gearing and capital gains tax would affect their investment properties.

The level of concern and engagement was reflected in the more than 500 questions submitted by investors ahead of the event.

Hosted by Ray White Head of Property Management Zac Snelling, Chief Economist Nerida Conisbee and Economist Atom Go Tian, the webinar unpacked the implications of the federal budget measures and what they could mean for investors, renters and the broader housing market.

Mr Snelling said the volume of registrations and questions highlighted the significance of the proposed reforms.

"We've never seen this level of engagement from customers on a webinar before," Mr Snelling said.

"More than 500 questions were submitted ahead of the session, which shows just how much uncertainty these announcements have created for everyday property investors.

"The most common questions were incredibly consistent: Should I sell? Should I still buy? What happens to my existing investments? Will rents rise? And perhaps most importantly, is it law yet?"

Mr Snelling said the webinar also reinforced why property remained Australia's preferred investment vehicle despite changing policy settings.

"Investors continue to choose property because it's a tangible asset that provides rental income, long-term capital growth, leverage opportunities and equity creation," he said. "Those fundamentals haven't changed."

Everyday Australians at the centre of the debate

During the webinar, Ms Conisbee and Mr Go Tian highlighted the profile of Australia's investor market, noting that the overwhelming majority of investors are small-scale participants.

According to Ray White research presented during the session, 72 per cent of property investors own just one investment property, while 19 per cent own two.

Australia is also heavily reliant on private investors to house renters, with 83 per cent of rental properties supplied by private landlords. There are currently 2.9 million renter households, representing 31 per cent of all households nationally.

Nearly half of all investors, 48 per cent, currently utilise negative gearing.

Ms Conisbee said understanding who investors are is critical to understanding the potential consequences of the reforms.

"These changes aren't just about investors, they're about the rental market as a whole," she said. "Private investors provide the vast majority of rental housing in Australia, so any policy that changes investor behaviour will ultimately flow through to renters."

What changes are proposed?

The webinar outlined the government's proposed reforms to negative gearing and capital gains tax.

Under the changes, properties purchased before 7:30pm on 12 May 2026 would be fully grandfathered, meaning existing investors would retain access to current negative gearing arrangements for as long as they own the property.

For properties purchased after that date, standard negative gearing rules would continue until 30 June 2027. From 1 July 2027, losses on established residential properties would no longer be deductible against salary or other income and could only be offset against rental income or future capital gains from residential property.

Importantly, newly built homes would remain exempt from the proposed changes.

The webinar also examined proposed changes to capital gains tax, with the current 50 per cent discount on assets held for more than 12 months set to be replaced by inflation indexation from 1 July 2027.

Is it law yet?

One of the most frequently asked questions centred on whether the reforms are certain to proceed.

Mr Go Tian said investors should prepare for the changes while recognising some details could still evolve.

"We are expecting that the majority of the changes will go through," Mr Go Tian said.

"There may be some minor changes to the bill, but investors should be planning based on the expectation that the key reforms will be implemented."

He said the grandfathering provisions provided significant protection for existing investors.

"It is in favour of current investors to hold their properties given the grandfathering arrangement," Mr Go Tian said.

What does it mean for property values?

While investor demand is expected to soften, Ms Conisbee said fears of a major market correction may be overstated.

"We expect prices to moderate," she said. "We don't have a formal forecast, but Morgan Stanley has suggested around a 10 per cent decline. It's important to remember that a 10 per cent drop would only take prices back to around July last year in most areas.

"Overall, we don't expect a huge impact on property values, but growth will be far more moderate than it has been."

Ms Conisbee said investor demand for established housing would likely fall, with some investors redirecting their attention towards newly built properties that remain eligible for favourable tax treatment.

"There will be a drop in the availability of rental properties over time as fewer investors purchase established stock," she said.