Does grandfathered negative gearing survive if ownership changes?
This is one of the most pressing questions for investors with grandfathered properties — and as of mid-2026, it has not been definitively answered by legislation or formal ATO guidance. Here is what is known and what the key risks are.
What triggers a potential loss of grandfathering?
Based on how similar grandfathering provisions have worked in the past (including the pre-1999 CGT regime), the following events may risk grandfathered status:
1. Transfer of ownership If you transfer the property to a new owner — including a spouse, trust, or company — the new owner is acquiring the property after the grandfathering date. The grandfathered treatment belongs to the original owner, not the asset. The new owner would likely be subject to the new rules.
2. Adding or removing co-owners If you add a co-owner (for example, bringing in a partner or spouse), the co-owner's interest is acquired after the cut-off. Their share may be subject to the new rules even if yours is grandfathered.
3. Refinancing This is the most uncertain area. If you refinance the loan on a grandfathered property — even to the same lender at a higher amount — it is not yet clear whether this would affect grandfathered status. The rules have not been confirmed, and this will likely be addressed specifically in the legislation.
4. Death and estate distribution If the property passes to beneficiaries under a will after the grandfathering date, the beneficiaries may be acquiring the property at that point — which could affect grandfathering.
What the government is expected to address
These "continuity" issues are standard considerations in grandfathering legislation. Most commentators expect the legislation to include provisions addressing:
- Whether the death of an owner affects grandfathering for the estate or beneficiaries
- Whether refinancing within commercial parameters affects the status
- Whether spousal transfers trigger a loss of grandfathering
What to do now
- Do not assume changes to ownership or financing are safe until the legislation is confirmed
- If you are planning to refinance, add a co-owner, or restructure — seek specialist advice before proceeding
- Monitor announcements from Treasury and the ATO closely as the legislation develops