The Greens–Labor tax deal explained: what investors actually got (and gave up)

G'day.

I covered the headline tax changes in yesterday's landlord brief. Overnight a lot more detail dropped about the actual horse-trading between Labor and the Greens — including a piece most property reporting missed: the NDIS angle. Here's the cleaner explainer of what was on the table, what got swapped, and what the final bill looks like before it clears the Senate this week.

What just happened, in 90 seconds

The Albanese government's first tranche of budget tax changes — restricting negative gearing and trimming the CGT discount — went through a Senate inquiry across mid-June. Business groups (Property Council, HIA, REIA) lined up against it; a clutch of independent economists defended it. The bill was stuck without crossbench support.

On Tuesday 23 June, the Greens announced they would vote it through, with three conditions Labor accepted:

1. Close the SMSF residential property loophole — self-managed super funds can no longer acquire residential investment property going forward.
2. Extend the Senate inquiry into NDIS cuts — the separate inquiry into Labor's proposed NDIS spending reforms gets more time and a broader terms of reference.
3. A statement on the public record that grandfathering of existing investor portfolios will be reviewed in the next parliament (no commitment to change it, but it's now formally on the agenda).

What the Greens didn't get: making the CGT and negative gearing changes retrospective. Senator Nick McKim floated this at the inquiry on 15 June; Labor refused to move on it. Existing portfolios remain grandfathered.

The NDIS link — why it matters even if you're not on NDIS

This is the bit worth understanding because it tells you about the political pricing of future property tax changes.

The Greens' core leverage in this parliament is that Labor needs them in the Senate. They chose to spend that leverage on two things at once — a property-investor loophole (SMSFs) and an NDIS inquiry extension. The signal: housing tax reform and social-spending reform are now formally linked in the negotiation room. Expect the same pattern on tranche two (which Treasury has flagged for 2027): any further tightening of investor tax concessions will likely be paired with a Greens demand on welfare or housing spending.

For investors, this means future changes are more likely to come in packages, not one-offs. Plan your 5-year horizon assuming the policy environment keeps moving in one direction, not that this round is the end of it.

The final bill — what's actually in it

For new investment property contracts signed on or after 1 July 2027:

• Negative gearing — restricted to one investment property per taxpayer. Losses from a second (or third, or fifth) property can't be deducted against salary income; they're quarantined and only deductible against future rental income or capital gains.
• CGT discount — reduced from 50% to 35% on the disposal of new investment assets.
• SMSF residential property — prohibited. SMSFs that already hold residential property can keep it; no new acquisitions.

Grandfathered (no change):

• Every investment property under contract before 1 July 2027.
• The full 50% CGT discount on those existing holdings — for the life of the asset.
• Existing SMSF residential holdings.

What I'd actually do this week

1. Document your acquisition dates. Pull the contract of sale for every property and store the date somewhere you can find in 5 minutes. Grandfathering will hinge on contract date, not settlement date.
2. If you have an SMSF that was planning to acquire residential property — that window is closing. Talk to your SMSF accountant this week, not next month.
3. Don't panic-sell. Flat 2026 price forecasts (Westpac, CBA) plus grandfathered concessions mean existing holdings are still the most tax-efficient version of themselves they will ever be. Selling now to "lock in" the 50% discount only makes sense if you were already planning to sell within ~24 months.
4. Re-run any new purchase modelling under the post-2027 regime if you're buying after grandfathering closes. The maths is different — particularly for second-and-beyond purchases — but not broken.

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General information only — not tax, financial or legal advice. Get personal advice before making changes to your portfolio.