Your Home's Value Is About to Change. Have You Locked Yours In?
- Kevin Leong
- Jun 24
- 3 min read
Updated: Jun 25
Rising interest rates, softening home values, and the biggest property tax shake-up in years. Here's what Australian property owners need to know, and do, before July 2027.
Australia's Property Market Has Entered a New Phase
Australian property owners are facing one of the most significant market shifts in recent years. In May 2026, the RBA raised the official cash rate to 4.35%, the third hike of 2026, while the Federal Budget introduced substantial property tax reforms expected to influence investor behaviour and property values across Australia.
Source: RBA Monetary Policy Decision, 5 May 2026 — rba.gov.au
What Changed in the 2026 Federal Budget?
Two reforms take effect from 1 July 2027:
Negative gearing will be limited to newly constructed properties. Investors who purchased established residential properties after 7:30pm AEST on 12 May 2026 will no longer be able to offset rental losses against wage income, losses can only be applied against future rental income or capital gains. Properties held before that date are fully grandfathered.
Capital Gains Tax — the 50% CGT discount will be replaced with a cost base indexation model and a 30% minimum tax on capital gains. Only gains accruing after 1 July 2027 are affected. Investors in new builds can choose whichever arrangement is more favourable.
Sources: ATO — ato.gov.au/negative-gearing-cgt-reform | Budget 2026–27 — budget.gov.au/content/04-tax-reform.htm
The Market Is Already Responding
National home values have begun softening, with Sydney dwelling values down 0.9% and Melbourne down 1.5% over the quarter to April 2026. Auction clearance rates in both cities have hit year-to-date lows, Sydney fell to 58.0% in June 2026, compared to 75.7% over the same week last year, a clear sign of reduced buyer confidence in the Australian property market.
Sources: Cotality Monthly Housing Chart Pack, May 2026 | Property Update — National Weekly Auction Report, June 2026
CBA, AMP, ANZ and Westpac have all revised housing forecasts lower, with expectations ranging from slower growth to moderate price declines through 2026–27. CBA's economics team sees rates on hold for the remainder of 2026, while Westpac has flagged further hikes in June and August as possible — either scenario pointing to continued pressure on borrowing capacity and property prices.
Sources: CBA Newsroom, May 2026 | Westpac IQ, May 2026
Why Property Valuations Matter More Than Ever
A professional property valuation helps owners understand their equity position, refinancing opportunities, borrowing capacity, and future planning options, before market conditions change further. In a softening market with major tax changes on the horizon, knowing your current equity baseline is the starting point for every decision that follows.
What Smart Property Owners Are Doing Now
Many property owners are taking action now rather than waiting. The most common steps include:
Obtaining a current property valuation to establish their equity position
Reviewing available equity and assessing refinancing options at current rates
Modelling the July 2027 tax changes against their specific investment property situation
Speaking to a mortgage broker before the deadline narrows their options
The Bottom Line
Understanding your property's current value is becoming an essential part of financial planning for Australian homeowners and investors. Taking action today, before the July 2027 deadline, may provide greater flexibility and better decision-making opportunities in the future.
General Advice Disclaimer
The information provided in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It should not be considered financial, tax, or legal advice. You should seek professional advice tailored to your individual circumstances before making any financial decisions.
To understand what options may be suitable for your situation, book a consultation with Lendcap today.
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