Labor proposes two-year extension for property tax rules

• The Albanese government published draft legislation to preserve negative gearing on inherited or split investment properties.
• Developers now receive 24 months instead of 12 months to sell new homes under qualifying tax rules.
• The proposed changes resolve unintended tax penalties for deceased estates and support longer sales cycles for new apartments.

The Albanese government released draft property tax fixes extending qualifying new build timelines from 12 to 24 months.

These changes address criticisms of tax reforms passed in June that restrict negative gearing benefits exclusively to new builds.

The updated rules preserve negative gearing eligibility when investment properties pass to spouses through inheritance or relationship breakdowns.

Without this fix, transferred properties were classified as new acquisitions, stripping owners of favourable negative gearing arrangements.

The proposal also clarifies tax rules for managed investment trusts, deceased estates, deferred capital gains, and temporary residents.

Property industry groups previously warned that completed apartments frequently take longer than one year to sell to buyers.

The legislative draft ensures buyers can still access negative gearing incentives when purchasing newly built Australian homes.