05/14/2026
**Here's why the 2026 Aussie tax rules may make shares and even crypto more attractive than property**
For generations, Australian investors have followed a familiar script: buy residential property, borrow heavily, collect rent, claim the losses against salary income, and rely on long-term capital growth.
It has been the classic wealth-building strategy for mum and dad investors.
But if the proposed post-2027 tax changes to residential property proceed in their current form, that long-standing hierarchy may be due for a reshuffle.
The irony is striking. In an effort to cool speculative property investment and improve housing affordability, policymakers may accidentally make leveraged share investing, and even some forms of digital asset investing, comparatively more attractive.
The key issue is not whether property remains a good investment. Residential real estate has delivered strong long-term returns in many Australian markets, particularly in south-east Queensland, where Brisbane, the Gold Coast and the Sunshine Coast have enjoyed powerful growth over the past decade.
The issue is whether property remains the most tax-efficient asset class for leveraged investors.
Increasingly, the answer appears to be no.
Under the proposed framework, investors purchasing established residential property would no longer enjoy the traditional benefits of negative gearing in the same way. Rental losses would effectively be quarantined rather than offset against salary income, sharply reducing the tax effectiveness of highly geared property strategies.
At the same time, changes to capital gains treatment for investment property would reduce another long-standing tax advantage.
Shares, by contrast, retain several structural benefits.
Borrowing to acquire income-producing equities generally remains 100% deductible under ordinary tax principles. Australian shares also continue to offer franked or fully-tax-paid dividend income, a feature many investors underestimate.
A $200,000 leveraged ASX 200 style portfolio yielding 4 per cent income, with most dividends franked, may not sound glamorous compared with a physical property. There are no open homes, no tenants, and no Saturday inspections.
But there is also no stamp duty, no leaking roof, no council rates, no insurance blowouts, and no property manager.
Most importantly, there is 100% easy liquidity.
A share portfolio can be partially or fully sold in minutes. Property investors can spend months exiting a position, often at considerable cost.
When the numbers are normalised for return on invested capital rather than simply headline asset size, the contrast becomes sharper.
Our scenario modelling suggests that a highly geared established property purchased under the proposed new rules becomes materially less attractive than many investors assume, largely because the annual cash burden remains high while the tax offsets weaken.
New-build residential property fares better, because current proposals preserve more favourable treatment, including continued negative gearing and depreciation benefits.
But the real surprise is how competitive ordinary Australian shares have suddenly become.
For investors seeking tax efficiency, diversified Aussie equities may emerge as the quiet winner.
Then there is crypto. Those four words alone will make some traditional investors splutter into their coffee.
To be clear, crypto remains the most speculative asset in this comparison. Volatility is extreme, regulatory frameworks continue to evolve, and capital preservation is far from assured.
But in a leveraged comparison, even modest assumptions can make digital assets look surprisingly competitive, largely because they offer strong long-term growth potential with comparatively low capital commitment.
That does not make crypto safer than property. No; it simply means the old assumptions about relative efficiency may no longer hold.
The lesson is not that Australians should abandon property. Property remains a powerful inflation hedge, offers leverage on terms unavailable to most other assets, and provides diversification benefits that listed markets do not.
*The smarter conclusion is diversification.*
A portfolio containing quality Australian shares, carefully selected property exposure, and a modest allocation to higher-risk growth assets may prove far more resilient than an all-in bet on any single sector.
For decades, Australians have treated property as the default path to wealth. The post-2027 tax landscape may demand a more nuanced approach. The era of “property first, everything else later” may be ending.
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# Assumptions, methodology and caveats
This analysis is based on scenario modelling rather than personalised tax advice.
Illustrative assumptions included:
# # Investor profile
* Australian resident PAYG household
* joint ownership (50/50)
* household incomes of $120,000 and $65,000
* no dependants
* standard marginal tax assumptions
# # Financing
* interest-only borrowing
* property debt at 7 per cent
* shares and crypto at 9 per cent
# # Asset assumptions
# # # ASX 200 proxy
* 4 per cent dividend yield
* 80 per cent franked
* 5.75 per cent annual capital growth
# # # Existing south-east Queensland residential property
* $500,000 purchase
* 4.2 per cent gross rental yield
* 1.8 per cent operating costs
* 6.25 per cent capital growth
# # # New-build residential
* lower maintenance
* depreciation benefits
* 5.75 per cent capital growth
# # # Crypto
* diversified digital asset exposure
* 12 per cent annual growth assumption
* 10 per cent staked at 5 per cent yield
# # Important caveats
* Property tax reforms referenced are based on currently understood proposals and interpretations, not enacted final law.
* Crypto taxation depends heavily on circumstances and ATO treatment.
* Actual borrowing rates, vacancy periods, maintenance costs, and market returns will differ materially.
* Historical returns do not guarantee future outcomes.
* Property’s leverage advantage remains significant, as lenders typically allow far larger exposure than margin lending or crypto borrowing.
The conclusion is comparative rather than absolute. Under these assumptions, leveraged shares and growth assets become relatively more attractive than established residential property under the proposed tax settings.
ROI ranking after ten years
| Rank | Asset | ROI |
| ---- | ----------------- | ---- |
| 🥇 | Crypto | 167% |
| 🥈 | ASX stocks | 67% |
| 🥉 | New Build | 61% |
| ☠️ | Existing Property | 5% |
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(c) 2026 Steve Ruby, BostonTrading
