Can You Still Make Money Flipping Houses After the 2026 Federal Budget?
House flipping is not dead—but the new tax settings make buying well, controlling costs and understanding your tax treatment more important than ever.
The short answer: yes—but the margin must do the heavy lifting
The 2026–27 Federal Budget changes the numbers for investors. From 1 July 2027, losses on established residential properties acquired after 7:30pm AEST on 12 May 2026 will generally be deductible only against residential property income. Unused losses can be carried forward. Properties held before Budget night are exempt from this negative-gearing change.
The Budget also proposes replacing the 50% CGT discount with cost-base indexation and a 30% minimum tax on net capital gains from 1 July 2027. Only gains accruing after that date are affected.
For many genuine house flippers, the bigger issue is not the CGT discount. The ATO may treat a planned buy-renovate-sell project as a profit-making venture or business, meaning the profit is ordinary income—and GST may also need consideration.
Two current homes ripe for renovation
What this means for a flip
A short renovation followed by resale may generate little rental income, so viability comes from the gap between the finished sale price and total project cost:
Expected sale price − purchase price − stamp duty and legal costs − renovation − interest and holding costs − selling costs − tax = true profit.
A viable project needs a conservative resale estimate, building inspection, tested renovation allowance, contingency buffer and clear exit plan. Structural work, planning delays and premium finishes can quickly erase the margin.
Where flippers can still create an advantage
The best opportunities are often homes with problems that look worse than they are: dated kitchens, tired bathrooms, old flooring, poor presentation or an awkward but workable layout. These faults may discourage owner-occupier buyers, yet they can sometimes be corrected without the expense and approval risks of a major rebuild.
Location remains critical. A renovated home still needs strong buyer demand, convenient transport, schools, shops and a price ceiling high enough to reward the work. Before buying, compare the property with recently sold renovated homes—not optimistic asking prices. Then allow for stamp duty, finance, insurance, utilities, council rates, selling commission and the possibility of a slower sale.
A sensible contingency of at least 10–15% of the renovation budget can protect against hidden defects and material or labour increases. Flippers should also avoid overcapitalising: the most expensive kitchen in the street will not necessarily produce the best return. The aim is a finish that suits the suburb and target buyer.
So, is flipping still viable?
Yes, selectively. The measures do not remove the opportunity to manufacture value, but tax assumptions cannot rescue a marginal deal. Successful flippers must buy below renovated value, improve what buyers will pay for, finish quickly and obtain tax advice before purchasing.
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Published by:
Nick Karayanis B.Eng. UNSW (Civil)
Licensed Contractor NSW (Building)
Sources: Australian Government, Budget 2026–27 Tax Reform and Negative Gearing and CGT Tax Explainer; Australian Taxation Office, Are you in the business of renovating properties?. Property information sourced from the linked listings.
Disclaimer:
The content of this blog is for informational and educational purposes only and should not be considered professional financial, legal, or real estate advice. Every real estate transaction and renovation project is unique, and you should consult with qualified professionals, such as real estate agents, contractors, and legal advisors, to address your specific needs and circumstances. The information provided here is based on personal experiences and research and may not reflect current market conditions or regulations in your area. Readers assume all responsibility for decisions made based on the content of this blog.
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