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The 2026-27 Federal Budget announced two changes effective 1 July 2027. First, negative gearing for residential property will be limited to new builds only, so investors buying established properties after 12 May 2026 can no longer offset rental losses against other income. Second, the 50% CGT discount is being replaced with cost base indexation and a 30% minimum tax rate on capital gainsfor properties bought after 12 May 2026. Properties held before 7:30pm AEST on12 May 2026 are fully grandfathered, and new builds remain exempt from both changes.
Dominion builds new dwellings from the ground up, and new builds are explicitly exempt from the negative gearing changes. More to the point, the model is positively geared from day one. A net yield of 8.5% and above means the property makes money the moment tenants move in. Negative gearing is a tool for investors losing money and hoping capital gains bail them out, which is not the position a Dominion investor is in. And because the approach, particularly the Legacy framework, is built around holding assets long term for passive income rather than selling, the CGT changes are largely irrelevant.
By stripping tax benefits from established property investors, the government is explicitly favouring new supply. Purpose-built co-living is new supply. Dominion sits exactly where the policy is pointing.
The budget changes do not affect whether to invest in co-living. They do make how you hold the asset slightly more important than before. The right structure, whether personal name, company, or family trust, depends on your circumstances, your existing portfolio, and your income. Thatis a conversation worth having with your accountant or financial advisor before you commit, and Dominion can introduce you to specialists who understand the asset class if you need a starting point.
Where to from here. If you would like an introduction to specialists who understand the co-living asset class, get in touch and we will point you in theright direction.
This article discusses generalmarket observations and is not financial or legal advice. Investors should consult their accountant or financial advisor regarding their personal tax situation and asset structuring.
