We were planning to invest into a house, and eventually retire in it, and be negatively geared to help with the repayments. It is now gone.
I was wondering, as a new investor, if I buy an existing property, and I transform into a duplex, can it be negatively geared?
Thank you
Transform? Probably need to do more than that.
Needs to be an eligible new build to negatively gear.
From the budget papers for examples of an eligible new build.
"A duplex constructed through a knock-down rebuild replacing a single, free-standing house. "
Check the Community link.
Federal Budget 2026-27 | ATO Community
Follow the hyperlink 2026-2027 Budget papers > Tax Reform > Negative gearing >Tax Explainer PDF > Table 2
That's all anyone knows. The proposed changes have not yet been legislated.
ATO defines new build for substantial renovation, mostly when structural work is involved.
Link for that?
In budget papers is the following
"Knock-down rebuilds or substantial renovations that do not increase supply will not be eligible."
So the assumption may be that substantial renovations that does increase supply will be eligible.
Until there is a definition of new build in ATO guidelines then there is no surety.
Hi @isisore12,
The measures announced in the 2026 Federal Budget are not yet law. It's too early for us to be able to comment, but you can read more about the proposed changes in the 2026-27 Budget papers.
For the latest law and policy updates, visit https://www.ato.gov.au/.../latest-news-on-tax-law-and-policy.
I agree we need it to be written in the law.
In the meantime, it is not possible to invest in a property when even the ATO doesn't know the taxation of it.
21 May 2026 · 4 min read time
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