What does "grandfathered" mean for negative gearing?

Grandfathered means your property keeps the negative gearing rules that existed before the 2026 reform — indefinitely, for as long as you own it.

The exact cutoff

A property is grandfathered if the purchase contract was signed before 12 May 2026, 7:30pm AEST. It's the contract date that matters, not the settlement date — so if you exchanged contracts before the cutoff but settled afterward, you're still grandfathered.

What staying grandfathered actually means

Nothing changes. A grandfathered property keeps working exactly as negative gearing always has: if your deductible expenses (interest, depreciation, repairs, management fees, and so on) exceed your rental income for the year, that loss can offset your other income — including salary and wages — reducing your overall taxable income for that year.

This status doesn't expire, isn't reviewed, and isn't affected by anything that happens to the property later — refinancing, renovating, changing tenants, or changing how you use it. It's locked in at the moment the contract was signed.

What it doesn't cover

Grandfathering is about the negative gearing treatment of rental losses specifically. It doesn't exempt you from other tax obligations — capital gains tax still applies when you eventually sell, land tax still applies where relevant, and you still need to keep proper records of income and expenses regardless of which regime your property sits in.

This guide reflects the announced reform rules as a general explainer and isn't a substitute for advice from your accountant about your specific situation.