Major lenders are moving quickly to update their investor lending policies following the Federal Government’s negative gearing changes that took effect on 12 May 2026.
NAB has confirmed that for contracts exchanged after 12 May 2026, negative gearing deductions will only be recognised for new build properties. Their updated servicing calculators are set to go live on 27 May 2026. NAB’s executive Lin Lu described the policy shift as a response to “foreseeable change” in the regulatory landscape, reinforcing the bank’s commitment to responsible lending.
What counts as a “new build” under the updated rules?
NAB defines a qualifying new build as an off-the-plan purchase, a duplex arising from a knockdown-rebuild, a new dwelling constructed on vacant land, or a property on-sold within 12 months of completion. Renovations, extensions, like-for-like replacements, granny flat additions, and properties occupied for more than 12 months before sale do not qualify.
How are other lenders responding?
Connective Horizon has announced that conditional approvals and approvals-in-principle will be reassessed under the new framework. The good news: unconditional approvals already issued will be honoured and will not be revisited.
Westpac has signalled that its current investor policies remain steady for now, with changes expected once the legislation is finalised in Parliament.
Macquarie Bank was the first major lender to act, stripping negative gearing add-backs from its servicing calculations on 18 May 2026.
What does this mean for you?
If you are considering an investment property, these changes could affect how much you can borrow. The distinction between new builds and established properties is now a critical factor in your lending strategy. If you have a conditional approval in place, it is worth checking with your broker whether it may be reassessed.
Every investor’s situation is different. The right approach depends on your income, existing commitments, and property goals.
Want to understand how these changes affect your borrowing capacity? Call Daniel on 0430 11 11 88 or visit finhub.net.au for a personalised assessment.
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