u/Classic-Rice-1977

Been running suburbs through an investment scoring model (yield + SEIFA + demand + affordability, scored 0-100). Here's what came out.

4556 -- Maroochydore, Sunshine Coast QLD

• Score: 54.3/100 (Good)
• Net yield: 2.08% | Rent: $725/wk
• 5yr projected capital gain: 38.3%
• 5yr total return estimate: $546k
• SEIFA: Decile 8 | Mortgage stress: 15.9%

People write off the Sunshine Coast as a lifestyle market. The fundamentals don't agree. SEIFA 8 means solid owner-occupier neighbours, lower tenant risk, and the 5yr return projection is the highest I've seen so far.

3030 -- Werribee, VIC

• Score: 51.4/100 (Good)
• Net yield: 1.99% | Rent: $560/wk
• 5yr projected capital gain: 31.9%
• 5yr total return estimate: $374k
• SEIFA: Decile 7 | Mortgage stress: 13.2%

Best result in VIC from what I've run. Cheaper entry than anything inner, decent infrastructure, the score backs it up.

6065 -- Wanneroo / Perth northern corridor, WA

• Score: 44.9/100 (Fair)
• Net yield: 1.95% | Rent: $600/wk
• 5yr projected capital gain: 25.2%
• 5yr total return estimate: $341k
• SEIFA: Decile 8 | Mortgage stress: 12.9%

Good demographics but softer cap gain projections than QLD. Makes sense if you're already Perth-based.

Honest takeaway: nothing is scoring brilliantly right now. Every suburb I've run comes back "extremely unaffordable" for new buyers. But the gap between 54 and 45 is real when you're making a 30-year call.

Source: proppulse.dev/suburb/4556 swap the postcode for any suburb you want to check, pulls from ABS and ATO data, free to use.

Happy to look up any suburb you're weighing up, drop a postcode below.

Most coverage tonight is treating property investors as one group. The impact of both reforms varies significantly by income bracket, and one of them is being widely misunderstood.

Who the NG change actually hits

Scope first: if you own investment property today, or signed contracts before 7:30pm tonight, nothing changes. Full NG preserved indefinitely. The restriction only applies to new buyers of established properties from tonight.

For those buyers, from 1 July 2027: rental losses can no longer be offset against wages. The property can still offset losses against its own rental income, but the tax benefit most investors are actually claiming disappears. Full policy detail at the Budget 2026-27 tax reform page.

The cost of losing that benefit varies with income because marginal rates vary with income. Modelled on a $650k established property, 80% LVR, 6.5% interest-only, 4.5% yield: Annual rental loss: $11,550

The highest earners were extracting the most from NG and lose the most from tonight. A $200k earner loses $5,429/year in tax benefit. An $80k earner loses $3,985.

New builds are fully exempt. If you want leveraged property exposure post-budget, a new build is the only path to keeping full NG.

The CGT change is being misread

Replacing the 50% discount with inflation indexation sounds like bad news. At current CPI it might not be.

Worked example: $650k property, sold after 10 years for $1,200,000.

Nominal gain: $550,000

Old method (50% discount): taxable gain = $275,000

New method (indexation at 4.6% CPI compounding 10 years): indexed cost base = ~$1,019,000. Taxable gain = ~$181,000.

Tax comparison at $120k income (34.5% marginal rate):

Old method: $275,000 × 34.5% = **$94,875**

New method: $181,000 × 34.5% = **$62,445**

New method saves $32,430 in this scenario.

For the new method to be worse you need either very low inflation (cost base barely moves) or property growing well above CPI (the nominal gain outpaces the indexation benefit). In an environment where property grows 5-7% annually against 4-5% CPI, indexation is roughly comparable or better. The era where property was growing 15% and inflation was 2% was when the 50% discount was genuinely superior.

The 30% minimum tax floor only stings investors earning under ~$45k (below that, their marginal rate is under 30%). For most investors it is irrelevant.

The one thing most investors are getting wrong regardless of tonight

Separate to the budget: most NG calculators apply a flat 30% or 32.5% rate. That is inaccurate for anyone earning over $135k. The table above shows the real numbers using actual ATO 2025-26 brackets.

For a $150k earner, a flat-rate calculator underestimates the annual NG saving by ~$520. At $200k the gap is nearly $2,000/year. If your model is wrong on that input, every suburb comparison you run is off.

Check your actual marginal rate here: [Individual income tax rates (ATO)](https://www.ato.gov.au/rates/individual-income-tax-rates/)

Full breakdown of what qualifies as deductible: [ATO negative gearing](https://www.ato.gov.au/individuals-and-families/investments-and-assets/rental-properties/negative-gearing)

Have been running suburb-level comparisons through [PropPulse](https://proppulse.dev) which calculates at actual marginal rates rather than a flat estimate. Happy to run the numbers on a specific scenario in the comments if useful.

Caveats

- Legislation has to pass Parliament. Announced tonight, not yet law.

- Contract vs settlement timing for the 7:30pm cutoff needs to be confirmed in the bill when it drops.

- CGT modelling assumes consistent CPI across the hold period. Real inflation is not linear.

- All figures are interest-only. P+I loans reduce the deductible interest portion over time as principal pays down.

- Not financial advice. Run your specific numbers with your accountant.

**TLDR:** NG restriction only applies to new established-property buyers from tonight existing owners untouched. Higher earners lose more because they were getting more. The CGT indexation change is probably better than the 50% discount at current inflation rates for most hold periods, not worse. Separate tip: if you are modelling NG on a property, check the calculator is using your actual marginal rate and not a flat 30% for anyone over $135k the gap is $500-2,000/year.

Negative gearing

If you already own investment property or exchanged contracts before 7:30pm tonight: nothing changes. Full negative gearing preserved on established properties.

If you buy an established property after 7:30pm tonight: from 1 July 2027 you can still deduct losses against rental income but can no longer offset those losses against your wages or other income. That is the core of what NG means for most investors and it is gone for new established-property purchases from tonight.

New builds are exempt. Government-backed housing is exempt. Existing owners are exempt.

CGT

The 50% CGT discount is being replaced from 1 July 2027 with cost-base indexation plus a 30% minimum tax floor.

Properties acquired before today: fully exempt, old rules apply.

New builds acquired after tonight: buyers can choose between the old 50% discount or the new indexation method.

Established properties acquired after tonight: new indexation method only.

Indexation is not automatically worse for long-term holders. If inflation stays elevated, adjusting the cost base for CPI reduces the nominal gain significantly. It removes the blunt 50% discount that mostly benefited short-to-medium term holders.

Inflation context

CPI hit 4.6% in the 12 months to March 2026. Treasury forecasts it peaks around 5% mid-2026 and returns to the RBA band mid-2027. That matters for the new CGT method: higher CPI means a bigger cost-base adjustment and a smaller taxable gain. The same inflation environment making cash flow harder is also making the new indexation method more favourable than it first sounds.

Why the NG calculation still matters for existing holders and new build buyers

For investors still eligible to claim NG, getting the exact saving at your actual income level is the critical number. Most tools calculate it at a flat 30% or 32.5% rate. That is wrong for anyone earning over $135k.

Ran the numbers on a $650k property, 80% LVR, 6.5% interest-only, 4.5% gross yield:

Annual rent: $29,250

Annual interest: $33,800

Rates, insurance, PM fees, maintenance: ~$7,000

Annual loss (the negative gearing amount): $11,550

What that is worth at different incomes using ATO 2025-26 rates including Medicare levy:

Flat 30% estimate for a $200k earner: $3,465/year. Real number: $5,429/year. $1,964 annual difference. Now that NG is being wound back for new entrants on established property, the investors who retain it need to know exactly what it is actually worth at their rate.

Caveats before someone does it for me

- Legislation still has to pass. Budget night announcements are not law until Parliament votes. Labor has the numbers in the lower house but Senate detail matters.

- The "owned before 12 May 2026" exemption wording needs to be read carefully when the bill drops. Timing of contract vs settlement could be a factor.

- These are interest-only figures. P+I loans reduce deductible interest over time as the principal drops.

- Depreciation not included and can materially change the loss figure for newer properties.

- This is not financial advice. Tax situation varies. Talk to your accountant before making any decisions off the back of tonight.

ATO marginal rate brackets: [Individual income tax rates](https://www.ato.gov.au/rates/individual-income-tax-rates/)

What qualifies as deductible under negative gearing: [ATO negative gearing](https://www.ato.gov.au/individuals-and-families/investments-and-assets/rental-properties/negative-gearing)

Running suburb comparisons through [PropPulse](https://proppulse.dev) for anyone working out what the numbers look like at their actual income. Happy to look up a specific postcode here if it helps.