For 1st July 2026 – Your need-to-know guide for Property Buyers and Real Estate agents – This is your refined Real Estate Market Update. Significant issues –
- What 4.35% Means for Your Contracts – First-home buyers relying on the FHGS, may be closer to their borrowing limits than they may realise.
- Valuation gaps are widening. Be aware of pre-approval expiry. With Reserve Bank meetings now eight times per year, pre-approvals obtained before a rate movement can expire mid-contract. Always check validity periods.
- Joint Tenancy vs. Tenants in Common — why it matters more than ever; and Co-Ownership Agreements — What a Good Agreement covers; and updates on Ownership Structures & Asset Protection.
Conveyancing Home Qld understands the name on the contract has irreversible tax and legal consequences. We have the expertise to point our conveyancing clients toward the best professional advice and flagging what needs to be resolved before exchange. Ensure you are guided by legal property professionals, with multilingual lawyers – CALL 073236 2852 | e: info@conveyancinghome.com.au | 8/320 Adelaide Street, BRISBANE
Rates Up, Market Splitting, Tax ClockTicking —
The June quarter has crystallised what was emerging earlier in the year: this is no longer a simple two-speed market. National dwelling values rose just 0.6 per cent over the quarter, reflecting a market that has moved decisively from broad-based growth to a more selective environment — and Melbourne recorded the steepest quarterly decline of any capital at 2.3 per cent, with Sydney not far behind at 2.1 per cent. At the other end of the country, Darwin and Perth continue to outperform significantly.
The overall picture reinforces a selective market narrative, where affordability, migration patterns, local supply conditions, and relative value appear to be driving stronger outcomes outside the most expensive capital city markets. For Conveyancing Home Qld, we are acutely aware of settlement timelines, valuation risk, finance clause adequacy, and price protection mechanisms that all need to be calibrated to the specific market a property sits in.
Sales activity remains below recent Brisbane averages ( 12 – 14% ) while listings have increased in weaker markets such as Sydney and Melbourne — meaning clients in those markets face different negotiating realities than clients in Perth or Adelaide, and due diligence timelines may actually be slightly more forgiving for buyers in the southern capitals right now.
Interest Rates & Lending
The Reserve Bank raised its cash rate by 25 basis points to 4.35% at its May 2026 meeting — the third consecutive increase this year, fully unwinding the easing cycle of 2025. The decision was made in an 8–1 vote, reflecting strong consensus, driven by a material pickup in inflation in the second half of 2025 and the impact of higher fuel costs flowing from geopolitical tensions. At the June RBA meeting — Commonwealth Bank economists expected a pause following May’s hike, while NAB recently removed its forecast for an August rate rise and now believes the next move is more likely to be downward, though timing remains uncertain. NAB does not expect an imminent cut, forecasting the cash rate to reach 3.6% by end of 2027 through a gradual easing cycle.
What 4.35% Means for Your Contracts
Finance clauses need extra protection. At 4.35%, serviceability buffers of 3% above the rate push assessment rates above 7%. Many buyers — particularly first-home buyers relying on the FHGS — are closer to their borrowing limits than they may realise
Valuation gaps are widening. In softer markets, lenders are valuing conservatively. Ensure finance conditions in contracts contain adequate time for valuations to be reviewed and shortfalls to be addressed — rushed settlement clauses are the most common source of conveyancing disputes in the current market
Pre-approval expiry. With meetings now eight times per year, pre-approvals obtained before a rate movement can expire mid-contract. Always check validity periods and build buffer into settlement timeframes
Taxation — 2026 Budget Reforms
Negative Gearing & CG
The May 2026 Federal Budget introduced the most consequential changes to property investment taxation in a generation. The reforms are not yet law — but they are already reshaping every investor conversation happening in your reception area. Understanding the precise mechanics is essential because the critical dates differ between negative gearing and CGT and conflating them is already generating client confusion
Negative Gearing — The New Rules
Negative gearing for established residential properties will be abolished from 1 July 2027 for properties purchased after 7:30pm on 12 May 2026. Investors affected by the changes will no longer be able to offset rental losses against salary or other personal income — instead, losses can only be offset against residential rental income or carried forward against future capital gains from rental properties
Existing property owners — including those already under contract before the announcement — are grandfathered and can continue to access negative gearing under current rules. Eligible new builds remain exempt, with investors still able to access both negative gearing and the 50% CGT discount
Capital Gains Tax — The New Framework
The Government will replace the 50% CGT discount for individuals, trusts, and partnerships with cost base indexation and a 30% minimum tax rate on capital gains from 1 July 2027. The impact on existing investments will be limited: properties held at the announcement time will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains that accrue after 1 July 2027
Transitional arrangements limit changes to gains arising on or after 1 July 2027, while prior gains remain subject to the current CGT discount. Investors in new residential property may choose between the existing CGT discount or the new regime on disposal. This election right is significant and needs to be flagged to investor clients buying new builds in the current window
After 1 July 2027 (new purchases)
Rental losses quarantined to property income only
CGT: CPI indexation + 30% minimum tax on real gains
New builds: still eligible for full negative gearing
Existing investors: grandfathered on negative gearing
Critical Date for Contract Review: 12 May 2026 7:30pm AEST
For negative gearing, the critical time is 7:30pm AEST on 12 May 2026. If an established investment property was already held at that time — including where a contract had been signed but not yet settled — the investor can continue to negatively gear until the property is sold. If an established investment property is bought after that time but before 1 July 2027, negative gearing may still be available until 30 June 2027, but not beyond.
Any investor client who entered a contract for an established property on or before that timestamp needs written confirmation of their grandfathering position. This is a document retention issue now — contracts, exchange records, and evidence of the signing time all matter.
“The combination of higher interest rates and quarantined negative gearing losses will materially change after-tax cash flow for new investors in established property. Investors need their numbers to work at current interest rate levels, accounting for the new rules.”
Refined Real Estate Market Update, June 2026
The dominant effect of the budget is the removal of negative gearing for established properties. The CGT change reinforces the shift by reducing the tax advantage attached to strong nominal capital gains. The combined effect is expected to lower established dwelling prices relative to the previous baseline, modestly increase rental pressure over time, and reduce turnover — while providing some relative support for new construction.
The key point for investor clients is that tax depreciation schedules and CGT valuations are not becoming less important — they are becoming more important under the new tax system. Under cost base indexation, the precise cost base recorded at acquisition becomes even more significant to the eventual after-tax outcome. Conveyancers play a direct role here: the documentation captured at settlement is the foundation for that cost base.
Co-Ownership Structures
Joint Tenancy vs. Tenants in Common — Why It Matters More Than Eve
Joint home loans between friends and family rose 33% from August 2024 to July 2025, and that trend has continued into 2026 as affordability constraints push buyers toward co-purchase arrangements. The choice of co-ownership structure — joint tenancy or tenants in common — carries profound implications for taxation, estate planning, and asset protection that are increasingly relevant given the new CGT framework
Joint Tenancy
In a joint tenancy, all co-owners hold an equal and undivided interest in the entire property. The defining feature is the right of survivorship: when one co-owner dies, their interest automatically passes to the surviving joint tenant(s), regardless of any will — interests cannot be gifted through a will. This makes it common for married couples, but it removes flexibility that investors, family groups, and property friends often need.
Tenants in Common
Tenants in common can specify equal or unequal shares in the property, and those shares can be distributed to any beneficiary upon death. Each co-owner can freely sell or bequeath their independent share. If a tenant in common wants to sell their share, they can do so without the agreement of the other owners — and interests can be transferred independently
Under the new CGT regime, the ability to hold unequal shares in tenants in common arrangements takes on added weight. Structuring ownership percentages to reflect income positions — for example, allocating a larger share to the lower-income partner — can influence how gains (and losses) are allocated for tax purposes. This is a conversation clients increasingly want to have before, not after, exchange
Co-Ownership Agreements — What a Good Agreement Covers
Ownership shares: The precise percentage held by each co-owner, whether equal or unequal, and the rationale for any variation
Decision-making: How decisions about the property — renovations, leasing, sale — are made and what happens when owners disagree
Exit provisions: What happens if one co-owner wants to sell, including first right of refusal, valuation methodology, and forced sale mechanisms.
Death and incapacity: How a co-owner’s share is handled on their death or loss of capacity — particularly important in tenants in common arrangements where survivorship does not apply automatically
Mortgage obligations: How joint loan obligations are managed if one co-owner stops contributing — a frequently overlooked risk in ‘property pal’ arrangements
Partition rights: The legal right to seek a court-ordered partition exists in Australian law and is a backstop if co-ownership breaks down. A well-drafted agreement sets out preferred dispute resolution mechanisms that avoid this
Co-ownership agreements — sometimes called a Tenants in Common Agreement, a Co-Ownership Deed, or a Property Sharing Agreement depending on the jurisdiction — are not required for title registration, but their absence is a significant risk for co-owners who are not spouses. As conveyancers, the settlement process is an ideal moment to raise this with clients and ensure they have (or are directed to obtain) appropriate advice
Ownership Structures & Asset Protection
Trusts, Companies, SMSF — The Structure Conversation is Back
The budget reforms have reignited client interest in ownership structures in a way not seen since the post-COVID period. Investors who previously held established properties in individual names for simplicity are now running spreadsheets on whether trust structures, company ownership, or SMSF acquisition might change their position — particularly in light of the quarantining of negative gearing losses and the new CGT framework.
In Melbourne’s high-value property market — and the same logic applies nationally — the question of how you own property is just as crucial as what you own. The ownership structure chosen is a foundational decision with profound, long-term implications for tax position, asset protection, borrowing capacity, and eventual estate planning.
Key Structures in the Current Environment
Individual Ownership
Simplest to establish. Access to the main residence exemption and the personal marginal rate system. Under the new regime, investors in established property will have negative gearing losses quarantined — so losses cannot reduce salary income. The cost base indexation system will apply to gains accruing from 1 July 2027.
Conveyancing note:
Confirm how the title is to be held — individual, joint tenancy, or tenants in common with specified shares — at the earliest possible point. Changes after settlement attract stamp duty in most jurisdictions.
Discretionary (Family) Trusts
Flexibility in income distribution remains the primary attraction — especially for clients with multiple beneficiaries on different marginal rates. However, the CGT changes apply broadly to trusts and partnerships, so the 50% discount on future gains (post-1 July 2027) is also removed for trust-held properties
Asset protection advantage: Trust-held assets may be protected from personal creditor claims in certain circumstances — a significant consideration for business owners and professionals. Trust purchases require careful review of the trust deed to confirm trustee powers to acquire real property. Some older deeds have restrictions. Stamp duty treatment of trust acquisitions varies by state
Company Ownership
Flat tax rate (currently 25–30%) may be advantageous for high-income investors. However, companies do not access the CGT discount at all — under old or new rules. With the new cost base indexation system replacing the 50% discount, companies lose less relative ground on CGT, but the pre-existing absence of any discount remains.
ASIC checks on corporate capacity to purchase, execution requirements for corporate entities, and foreign investment considerations (for foreign-owned companies) all require specific attention at the contract stage.
SMSF Property Ownership
SMSFs remain attractive for property investment given that superannuation earnings are taxed at 15% (10% on capital gains on assets held 12+ months in accumulation). The new budget CGT changes do not affect the CGT concession for superannuation funds — that discount is expected to remain unchanged.
Limited Recourse Borrowing Arrangements (LRBAs) for SMSF property purchases carry specific documentation requirements. The contract must be in the SMSF trustee’s name, and bare trust arrangements need to be correctly established before or at settlement. Errors here cannot easily be corrected post-settlement.
Conveyancing Home Qld understands the name on the contract has irreversible tax and legal consequences. We have the expertise to point our conveyancing clients toward the best professional advice and flagging what needs to be resolved before exchange. Ensure you are guided by legal property professionals, with multilingual lawyers – CALL 073236 2852 | e: info@conveyancinghome.com.au | 8/320 Adelaide Street, BRISBANE #ConveyancingHomeQLD #QLDProperty #PropertyLaw #BrisbaneRealEstate #Co-OwnershipAgreements #QueenslandHousing #propertymarket2026 #ConveyancingLawyers #Spanishspeaking #JapaneseLawyers #ChineseLawyers #KoreanLawyers