Persona 06 — Elena, three-property landlord

Profile

• Age: 47
• Occupation: Hospital administrator, $145,000 income (PAYG)
• Family: married, no dependants
• Investment property A — Bondi 1-bed unit, purchased 2018 for $720k. Currently negatively geared by ~$8,000/yr.
• Investment property B — Newcastle townhouse, purchased 4 March 2026 for $620k. Negatively geared by ~$11,500/yr.
• Investment property C — Geelong house, contract signed 18 May 2026, settlement 12 August 2026, $580k. Projected loss $9,000/yr.

Their universe of policies

• Theme 04 §4.2.3 — Negative gearing limited to new builds
• Theme 04 §4.2.4 — Transitional rules / new-build exemption
• Theme 04 §4.2.1 — CGT indexation
• Theme 04 §4.2.2 — 30% min tax on capital gains

Scenarios

Scenario A — Property A (purchased 2018)

• Policy: §4.2.4 transitional — properties held at announcement (7:30pm AEST 12 May 2026) keep negative-gearing rights for life.
• Mechanic: Elena keeps her current $8,000/yr rental loss deduction against her hospital salary. No change. When sold, gains accrued before 1 July 2027 use the 50% CGT discount, gains after use indexation + 30% min.
• Source: tax-explainers-negative-gearing-capital-gains-tax.docx — "Michael" cameo.

Scenario B — Property B (purchased 4 March 2026, before announcement)

• Policy: Same as Scenario A — held at announcement → grandfathered.
• Mechanic: Full negative gearing preserved for life. Bought before 12 May 2026, no change.

Scenario C — Property C (contract signed 18 May 2026, after announcement)

• Policy: §4.2.3 — purchased between announcement and 30 June 2027 → can be negatively geared during that window but not from 1 July 2027.
• Mechanic: Elena can deduct the $9,000 loss in 2026-27 against her salary (saves ~$3,330 at 37% marginal). From 1 July 2027, the loss can only offset other residential-property income (her properties A and B's net rents, or carry forward). If A and B remain net loss-makers, all of C's losses carry forward.
• Outcome from 2027-28: ~$3,330/yr of tax benefit she would have had under old settings is lost on Property C; carries forward indefinitely as a deduction against future residential property income.

Scenario D — She sells Property A in 2032

• Policy: §4.2.4 transitional CGT — gains accrued before 1 July 2027 use 50% discount; gains after use indexation + 30% min tax.
• Source: Treasury "Jane" cameo in tax-explainers-negative-gearing-capital-gains-tax.docx.
• Mechanic: Elena uses the ATO valuation tool to determine Property A's value at 1 July 2027 (or uses the apportionment formula). Pre-1 Jul 2027 gains: 50% discount. Post-1 Jul 2027 gains: indexed cost-base + 30% minimum. At 37% marginal she's already above 30% min so it doesn't bite.
• Numbers (illustrative): $720k → $1.1M sale 2032. Apportioned: $200k pre-1-Jul-2027 gain, $180k post-. Pre-: 50% × $200k = $100k taxable. Post-: $180k less indexation @ 2.5%/yr × 5y = ~$23k, taxable $157k. Total taxable: $257k @ 37% = $95,090. (Stylised — use the calculator for live numbers.)

Scenario E — Could she pivot to new builds?

• Policy: §4.2.4 — new builds keep both full negative gearing and the choice of 50% discount or indexation + min tax at sale.
• Decision: Elena considers selling Property C and replacing with a new off-the-plan apartment. Under the new-build exemption she keeps negative gearing. (She's a "subsequent purchaser" of any new build occupied >12 months before sale loses the exemption — has to buy genuinely new supply.)

Bottom-line annual impact (vs status-quo / pre-2026 settings)

Calculator settings

Open calculator/index.html:

• Property tab: add 3 properties with the right "purchase date" so the engine grandfathers A and B.
• For Property C, set "purchase date = 2026-05-18" — the tool flags it as transitional and stops counting the loss against salary from 1 July 2027.
• For each property set an expected sale year and growth rate to see CGT under both the 50% discount and the new indexation + min-tax regime.