The grandfathering deadline: a pre-1 July 2027 portfolio checklist

Grandfathering is the most valuable, least understood provision in the 2026 Budget package. Any residential investment held — or contracted — before 7:30pm AEST 12 May 2026 retains negative gearing and the 50% CGT discount for the life of the asset. Any new purchase settled before 1 July 2027 retains pre-Budget treatment under transitional rules.

That two-tier deadline structure creates a narrow, high-leverage window. Used well, it locks in decades of tax optionality. Used poorly, it traps capital in assets that will underperform the post-2027 framework.

One: Is each existing position still the highest and best use of the capital it ties up, even with grandfathering preserved? Two: Are there contracts in flight that should be accelerated to clear the 1 July 2027 settlement deadline? Three: Where established stock is being retired, is the recycled capital being directed into Budget-compliant new builds rather than left idle? Four: Has the ownership structure (individual, trust, SMSF) been re-tested against the new CGT regime?

Most portfolios we review fail at least two of those four. The most common failure is question one — investors assume grandfathering is a reason to hold, when it is only a reason to evaluate.