If you own an investment property, or you are simply chipping away at your own mortgage, the past few months have handed you plenty to think about. The May 2026 federal budget took a knife to negative gearing. Victoria keeps widening its land tax net. And interest rates are still sitting higher than most borrowers would like. Holding costs are up, and some of the tax perks that used to soften them are on the way out.
So it is a fair question to ask. With the rules shifting, is now the time to take a hard look at your home loan? Here is what has changed, and where refinancing fits in.
What is actually changing with negative gearing?
Negative gearing let investors deduct a rental property’s losses against their wages, trimming their tax bill while they waited for the property to grow in value. That is being wound back.
Under changes announced in the 2026-27 federal budget and now law, negative gearing on established residential properties will be abolished from 1 July 2027 for any property bought after 7.30 pm on budget night, 12 May 2026. From that point, losses on those properties can only be offset against rental income or a future capital gain, not your salary.
There are carve-outs. Anything you already owned before budget night is grandfathered, so you can keep negatively gearing it until you sell. Brand-new builds stay exempt too, keeping both negative gearing and the 50 per cent capital gains discount, which is a deliberate nudge towards new housing supply. Still, for anyone eyeing an established home to rent out, one of the biggest tax advantages of the past few decades is quietly disappearing.
And what is happening with land tax?
State governments have been busy as well, and Victorian owners have felt it more than most. The COVID Debt Levy, introduced in 2024 and locked in until mid-2033, lowered the threshold and added surcharges to holdings that never used to attract land tax at all. Expect $500 on landholdings between $50,000 and $100,000, and $975 plus a higher rate once you pass $300,000.
From 1 January 2026, the Vacant Residential Land Tax reaches further again. It now applies right across Victoria to homes left uninhabitable, or stuck under construction or renovation, for more than two years. Previously it targeted only the inner and middle suburbs of Melbourne.
Holiday homes and other properties that are not your main residence are also copping a higher fire services levy from 1 July 2026.
None of these is huge on their own, but stack them on top of a mortgage, and the yearly cost of holding property keeps climbing.
Where does refinancing come in?
Here is the part you can actually control. Tax settings and state levies are fixed by government. Your mortgage is not.
The Reserve Bank has lifted the cash rate three times this year and held it at 4.35 per cent in June, so a lot of borrowers are paying more than they were twelve months ago. But lenders do not all move in step, and they are certainly not obliged to hand you a sharp rate just because you have stayed loyal. According to Canstar, dozens of lenders are still advertising owner-occupier variable rates under 6 per cent. If your loan starts with a 6 or a 7, there may be room to move.
That is exactly where refinancing your home loan with a trusted broker like Orange Home Loans is worth a look, as switching to a better rate, or restructuring the loan itself, can claw back some of the ground you are losing to higher holding costs and thinner tax breaks. On an average mortgage, even half a percentage point adds up to a substantial amount over a year.
What should you weigh up first?
Refinancing is not free, and it is not automatically the right move. Break fees, application and valuation costs, and lenders’ mortgage insurance can all eat into the saving, so the sums need to stack up. It is also worth thinking about whether you want a variable rate, the certainty of a fixed one, or a split of the two, especially with the next RBA decision due on 11 August and economists divided on which way it will go.
Investors have an extra layer to consider. If you are weighing up an established property against a new build, the tax treatment now looks very different, and that belongs in the conversation before you commit to anything. A mortgage broker or a good accountant can run your actual numbers rather than the averages.
The takeaway for property owners
The ground under property owners has shifted, and more of the cost now sits squarely on your shoulders. You cannot rewrite the tax code or the land tax rules. You can make sure your loan is not quietly costing you more than it should. An afternoon spent comparing rates might be the most useful thing you do with your property all year.
None of the above is financial advice, so check your own position with a licensed broker or adviser before you make the call.
