Macquarie has given the market an early warning: the negative gearing debate is no longer just politics. It is now moving into credit policy.
The bank has told brokers it will no longer count negative gearing benefits in serviceability calculations for some established investment property purchases made after budget night, unless the property qualifies as a new build that adds to housing supply.
That matters because serviceability is where the real buying limit usually sits. Not the deposit. Not the headline price. The borrowing test.
If other lenders follow, the tax change could start shaping investor behaviour well before the new rules formally begin.
Australian Property Review has already covered why the negative gearing reset could squeeze small landlords and renters. This is the next layer: banks do not have to wait until 2027 to change how much they are willing to lend.
The bank move that changes the timing
The proposed policy shift is aimed at limiting negative gearing to new investment properties from mid-2027.
But Macquarie’s lending change brings the issue forward.
In plain English, if a lender no longer counts future tax losses as income support, some investors may qualify for a smaller loan today. That does not mean every investor is blocked. It means the numbers get tighter.
That is important because many property decisions are made at the edge.
A borrower might still have a deposit. They might still have strong income. They might still like the property. But if the bank says the rental loss can no longer help the serviceability test, their maximum loan size can shrink.
That can change the suburb they buy in, the dwelling type they target, or whether they buy at all.
Quick take:
This is not just a tax story. It is a credit story. If banks remove negative gearing from borrowing calculations, the policy starts biting through loan approvals before it bites through tax returns.
Why lenders are moving early
Banks do not just lend against what a borrower can afford today. They also have to assess whether the borrower can still afford the loan under reasonably foreseeable changes.
That is where responsible lending comes in.
If the government is signalling that negative gearing benefits will be limited for future established-property purchases, banks may decide it is risky to keep treating those tax benefits as reliable support.
Here’s the catch.
The tax law may not have started yet, but a 30-year loan will still be running when the rules change. For a lender, ignoring that future change could look loose.
This is why Macquarie’s move matters beyond its own loan book. Smaller and faster-moving lenders can set a tone. Larger banks may wait, watch and adjust later. If enough lenders change their calculators, the impact becomes market-wide.
Australian Property Review has made the same point in rate coverage before: borrowing power can shift quickly when lenders become more cautious, even if property prices do not immediately move. For related reading, see our piece on RBA rate pain and borrower options.
Investors may face two different markets
The government’s aim is clear enough: push investor demand away from established homes and towards new supply.
In theory, that could free up some established homes for first-home buyers.
In practice, the result is messier.
Established homes and new builds do not always serve the same buyer. A first-home buyer looking for an older unit near work is not always competing with the same investor looking at a new townhouse package on the fringe.
And if investors are pushed harder into new builds, they may end up competing directly with first-home buyers in the very market governments say they want to help.
Australian Property Review has already explored this in Labor’s new-build tax bet could backfire on buyers. The same issue applies here. Changing the tax incentive does not magically create more land, faster approvals, cheaper materials or more builders.
It changes who is bidding for the limited supply that exists.
The first-home buyer trade-off
There is a possible upside for first-home buyers.
If investors pull back from established properties, some auctions may become less crowded. That could help buyers in suburbs where investors have been strong competition.
But there is a second-order effect.
If fewer investors buy established rental properties, the rental pool can tighten. If some landlords sell and those homes become owner-occupied, tenants may lose available stock. That can add pressure to rents, depending on local vacancy, wage growth and supply.
So the first-home buyer could benefit as a buyer, but suffer as a renter before they get there.
That is the uncomfortable part of housing policy. The buyer market and the rental market are connected, but they do not always move in the same direction.
What could derail the impact
The effect will depend on three things.
First, whether the major banks follow. If only one lender tightens its calculator, borrowers may shop around. If most lenders move, the market changes.
Second, whether the final policy design gives clear transitional rules. Investors will want to know which contracts qualify, how refinances are treated, and what counts as a new build.
Third, whether new supply can respond. If planning delays, construction costs and labour shortages keep new housing constrained, pushing investors towards new builds may lift competition without lifting supply fast enough.
That is the main risk.
A tax reform designed to redirect demand can work better when supply can expand. If supply is stuck, the pressure simply moves.
What investors should do now
The practical next step is not panic. It is a borrowing-power check.
Investors looking at established property should ask their broker or lender to run the numbers twice:
- with negative gearing included in serviceability
- without negative gearing included in serviceability
The gap matters.
If the deal only works because the tax loss is counted, the margin may be too thin. That does not automatically mean the purchase is wrong. It means the investor needs a bigger cashflow buffer, a clearer rent assumption and a plan for higher holding costs.
For first-home buyers, the message is similar. Do not assume investor demand disappears. It may shift into new builds, different suburbs or different price points.
General info, not financial advice.
