The Same Rate Rise Costs Investors Different Amounts: What 0.25% Means by Property Class

On 29 September 2026 the Reserve Bank lifted the cash rate by 0.25% to 4.60%, its fourth rise this year. Three investors own the same $780,000 house in Queensland, each with the same $624,000 interest-only loan. If their lender passes the full rise on, all three pay $1,560 a year in extra interest, which is $30 a week. After tax, though, the rise costs them different amounts. The investor who bought before Budget night pays an extra $19 a week. The new-build buyer also pays $19. The investor who bought an established house after 12 May 2026 pays $19 for now, and the whole $30 from 1 July 2027, when the new loss rules start.

The bank charges all three the same rate, so the difference comes entirely from the tax treatment the 2026–27 Budget attached to each property class. Since that Budget, how much a rate rise costs you depends on when you bought and what you bought, as well as on the size of the loan.

Every figure below comes from Plintha's deterministic finance engine, the same code behind every analysis on this site. The exact inputs are published alongside this post, so anyone can re-run them.

The setup

One property, run through the engine nine times: three property classes, each at three interest rates.

• Purchase price: $780,000, an established-style house in Queensland (the new-build scenario uses the same price)
• Weekly rent: $640 ($33,280 a year, a 4.27% gross yield)
• Loan: 80% LVR, interest-only, $624,000
• Marginal tax rate: 37%
• Stamp duty: $28,125 on the engine's Queensland schedule. The Budget didn't change transfer duty, so it is the same in every scenario.

For interest rates we use 5.75% for "before this year's rises", 6.5% for "before September" and 6.75% for "now". These are illustrative investor rates, not quotes. Each assumes a lender passed every cash-rate move straight through. The cash rate went from 3.60% at the end of 2025 to 4.60% now, a total of 1.00% across the four rises (RBA cash rate table and the 29 September decision). Your own rate will be different. What matters here is the gap between scenarios, not the starting rate.

What the rises cost, after tax, per week

Over a year, the four rises add between $3,900 and $3,952 to the holding cost of both the grandfathered investor and the new-build buyer; the gap between those two figures is weekly rounding, not a real difference. The established post-budget buyer pays $6,240, which is every dollar of the extra interest.

Why the tax treatment changes the cost

Under the old rules, which grandfathered owners and new-build buyers keep, interest is deductible against salary. When the rate rises, the rental loss grows and so does the tax refund. At a 37% marginal rate, the refund covers 37% of each rise, so the investor bears about 63% of it. That is why $30 a week of extra interest becomes $19.

From 1 July 2027, an established dwelling bought after 12 May 2026 no longer gets that refund. Its rental losses are quarantined: they can only be offset against income from residential property, including capital gains, and any excess carries forward instead of reducing this year's tax on salary. For an investor with no other residential property income, as modelled here, none of the refund grows when rates rise, and they pay the full increase in cash, every week, until the property turns a rental profit or is sold.

The interest is still deductible eventually, so the rise isn't permanently more expensive in tax terms. But a carried-forward loss doesn't help with this month's budget. A carried-forward deduction doesn't cover a weekly shortfall, so the cash cost is what you have to fund.

These rules are law. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed both houses on 25 June 2026 (The Adviser). We cover the class rules in property classes after the 2026–27 Budget and negative gearing after the 2026–27 Budget.

The timing detail that matters this year

Quarantining starts on 1 July 2027, not on settlement day. For the rest of the 2026–27 financial year, an established property bought after Budget night still gets the full salary offset. On the engine's numbers, that investor's weekly cost at 6.75% is $214 for now, the same as the grandfathered owner's, and this year's four rises cost them $76 a week, not $120.

Then the offset ends. On the same loan at the same rate, the weekly cost goes from $214 to $416. The rate didn't move; the tax treatment did. Like every Plintha analysis, the table above models the position from 1 July 2027, because almost all of a multi-year hold falls after that date. For an established property bought in the past few months, the second number is the one that applies from 1 July 2027.

Stress-testing a further 1%

The gap gets wider under stress because the established buyer bears the whole of every further rise. Plintha's standard stress test adds 1% to the rate. From today's 6.75%, the engine puts the weekly cost at:

• New build: $197
• Grandfathered: $289
• Established, bought after 12 May 2026: $536

Before any further rise, the established buyer's holding cost is already roughly double the grandfathered owner's: $416 against $214, a $202 weekly gap. Rate rises widen that gap because the refund absorbs part of each rise for one investor and none of it for the other. At 5.75% the gap was $158.

The new build looks cheapest throughout. Part of that is the salary offset it keeps. The rest is depreciation: a brand-new building gets a larger depreciation deduction, which the engine counts in the refund. But a new build is a different asset with its own risks: off-the-plan settlement risk, an unproven estate, and a land share that is usually smaller. Its lower weekly cost doesn't make it the better investment.

What these numbers don't cover

• Pass-through. We assumed every rise was passed on in full. Lenders reprice investor loans on their own timing and sometimes by different amounts.
• Your bracket. The 63/37 split assumes a 37% marginal rate. On a lower bracket the refund covers less of each rise and the after-tax gap between classes narrows. On a higher one it widens.
• Rent. We held rent flat. If rents rise alongside rates, part of the increase is covered, and the established buyer, who has no refund, benefits most from a rent rise.
• Land tax. At this price, the engine's land-value estimate falls under Queensland's threshold for an individual, so land tax is $0 here. In other states, or at higher land values, land tax adds a cost that doesn't depend on interest rates.
• Principal and interest. On a P&I loan, the principal part of each repayment is not deductible at all, in any class. That is a separate calculation, covered in our interest-only vs P&I worked example.

Nothing here says established property bought after the Budget is a bad decision. It means that the same rate rise asks more of your cash buffer, and if you hold that kind of property it's worth knowing how much more before the next RBA meeting rather than after. To see what a rate move would cost on a specific property, with your price, rent and loan, you can run it through Plintha.

This article is general information, not financial, tax, credit or legal advice. It doesn't take into account your objectives, financial situation or needs. Figures use Plintha's engine with the assumptions stated above (80% LVR, interest-only, 37% marginal rate, Queensland duty, standard operating-cost model) as of 3 October 2026, and will change if any of those inputs change. Check your own position with a licensed tax agent or financial adviser before acting.