Should You Sell Your Investment Property After the Budget? What the Numbers Actually Say

The question everyone is asking

Since the May 2026 budget landed, one question has been dominating conversations between investors and their accountants, financial planners, and anyone else they can get on the phone. Should I sell?

It is an understandable reaction. The changes to negative gearing and capital gains tax treatment are the most significant shifts to property investment policy in a generation, and the headlines have done little to calm nerves. When the rules change, the instinct to act, to do something, is completely natural.

But instinct and strategy are not the same thing. And right now, the gap between them is costing some investors significantly.

What a reactive decision actually looks like

An investor who sells in response to a policy change is making two bets simultaneously. The first is that selling is the right move based on their specific numbers. The second is that the timing is right. Both bets need to be correct for the decision to pay off. In the current environment, many investors making that call are getting at least one of them wrong.

Selling a property triggers a capital gains tax event. For investors who have held for several years, that gain can be substantial, and the revised CGT treatment introduced in the 2026 budget applies to disposals after 1 July 2027. Selling before that date means the existing rules still apply, but selling in haste also means absorbing transaction costs, agent fees, and the loss of any further capital growth on an asset that may have years of upside remaining.

The investors who sold during previous periods of policy uncertainty, including the debates around negative gearing reform in 2019 and the rate cycle of 2022 to 2023, largely underperformed those who held. That is not a guarantee of what happens next. It is a pattern worth understanding before making a decision that cannot easily be reversed.

The questions that actually determine the answer

Whether selling makes sense depends entirely on factors that are specific to each investor's situation. Generic advice in either direction, hold everything or sell now, misses the point entirely. The right answer sits inside a set of questions that most investors have not fully worked through.

What is the actual after-tax position if you sell today versus holding for another five years? How does the revised CGT and negative gearing treatment affect that calculation, and does the grandfathering of these rules actually make holding the property a better option? Is the property performing on its fundamentals, or was it always dependent on the tax treatment to justify the holding cost? What does your borrowing capacity look like after a sale, and does it improve or limit your ability to reinvest? These are not simple questions, and the answers are rarely what investors assume before running the actual numbers.

Some investors will find that selling is genuinely the right call. A property that was always marginal on fundamentals, held primarily for negative gearing benefits that no longer apply, may well be better exited and the capital redeployed. But that conclusion should come from analysis, not anxiety.

What the numbers tend to show

When investors work through a proper hold-versus-sell analysis, a few patterns emerge consistently. Properties in well-located suburbs with genuine rental demand and strong owner-occupier competition have historically continued to perform through policy changes because their value is driven by fundamentals, not tax settings. The budget changed the tax settings. It did not change the fundamentals of what makes a suburb desirable, what keeps vacancy low, or what drives long-term capital growth.

The carry-forward mechanism for rental losses also changes the calculation in ways most investors have not modelled. Losses quarantined under the new rules are not lost. They offset future income and capital gains. Over a ten to fifteen year hold, that recovery is meaningful. Selling to avoid those quarantined losses often crystallises a worse outcome than holding would have produced.
There are situations where the numbers do point clearly toward selling. But identifying them requires running the actual scenarios, not reacting to the headline.

The cost of getting this wrong

A property investment is typically the largest asset outside of a family home that an investor holds. The decision to sell or hold in response to a policy change deserves at least as much rigour as the original purchase decision. Most investors spent months researching before they bought. The hold-versus-sell decision often gets made in days, based on incomplete information and heightened emotion.

Getting it wrong in either direction has a real cost. Selling a fundamentally strong asset at the wrong moment locks in an outcome and removes optionality that can take years to rebuild. Holding a genuinely underperforming asset because of inertia or fear of crystallising a loss is equally damaging over time.

The investors who navigate periods like this best are not the ones who act fastest. They are the ones who get the clearest picture of their actual position before they move.
Before you make any decision about your investment property, get the numbers in front of you. brickstowealth works through hold-versus-sell analysis with investors every day, and the answer is rarely what people expect before they see it. Book a free consultation at brickstowealth.com.au and find out where you actually stand.