Federal Budget 2026
What It Means for Property Owners, Investors & Buyers
Key Changes At a Glance
Negative Gearing Changes
From 1 July 2027, negative gearing will be limited to new residential builds.
Existing investment properties held before Budget night will be grandfathered, meaning current investors will keep their existing arrangements until the property is sold
Capital Gains Tax Changes
The current 50% capital gains tax discount will be replaced with a new inflation-based model from 1 July 2027.
These changes will affect future investment decisions, particularly when it comes to established investment properties
More Support for New Housing
The Government is aiming to encourage more investment into new homes by keeping stronger tax benefits in place for new builds.
This will make new homes, townhouses and apartments more attractive from a tax perspective for some investors.
Housing Infrastructure Funding
Funding has also been announced to help deliver infrastructure such as roads, water, sewerage and power, supporting the delivery of more homes over time
What This Means for Investors
For investors, the biggest shift is that future tax benefits will be directed more towards new builds rather than established properties
Existing investors with properties held before Budget night will not need to make immediate changes to their current negative gearing arrangements However, future purchases should be reviewed carefully with an accountant or financial adviser
Investors looking at established properties will need to place more focus on rental yield, cash flow, holding costs and long-term capital growth
The strategy will shift from simply relying on tax benefits to assessing whether the property makes sense on its own fundamentals.
Investor Takeaway
Property investment will become more strategy-driven, with cash flow, property type and long-term fundamentals becoming even more important
New builds will receive greater attention from a tax perspective, but they still need to be assessed carefully based on location, quality, rental demand and long-term growth potential.
What This Means for Property Owners
For current property owners, these changes will influence buyer behaviour, investor demand and future market conditions
If you already own an investment property that was held before Budget night, the grandfathering rules mean your existing arrangements will remain unchanged until the property is sold
For owner-occupiers, the impact will be more indirect If investor demand for established homes reduces, some first home buyers and owner-occupiers may face less competition from investors.
However, this does not mean demand for property will disappear. In strong local markets, demand is likely to shift from investors to owner-occupiers
Interest rates, borrowing power, stock levels and local buyer confidence will continue to play a major role in property prices and sales activity
Owner Takeaway
You do not need to rush into a decision, but it is worth understanding how your property is positioned in the current market
If you are thinking of selling, it will be helpful to understand whether your likely buyer pool is made up of investors, first home buyers, families, downsizers or owner-occupiers.
What This Means for Buyers
For buyers, the Government’s aim is to make it easier for more Australians to enter the property market by reducing some of the advantages investors have when purchasing established homes
This is designed to create more opportunity for some first home buyers, particularly if investor competition reduces in certain price points or suburbs
However, affordability remains a major factor Borrowing capacity, interest rates, deposit size, income, available stock and lifestyle needs will continue to influence what buyers can purchase
The impact will also vary depending on location, supply, demand and market conditions.
In areas where stock remains tight, buyer competition may still be strong, even if investor activity reduces
Buyer Takeaway
The Budget will change some market dynamics, but smart buying still comes down to affordability, location and long-term goals
Buyers should still focus on purchasing quality property in the right location, with a clear understanding of their budget and future plans.
Why New Builds Matter
The Budget is designed to direct more investment into new housing supply.
This will make new homes, townhouses and apartments more attractive from a tax perspective for some investors
By keeping stronger tax benefits in place for new builds, the Government is aiming to encourage more housing construction and increase supply over time
However, new supply takes time. Planning approvals, construction costs, labour availability, infrastructure and development timelines all influence how quickly new housing can actually reach the market.
A new property also needs to be assessed carefully Just because a property is new does not automatically mean it is the right investment
Location, build quality, rental demand, body corporate fees, developer reputation, land component and future resale appeal should all be considered
New Build Takeaway
New properties will become more appealing from a tax perspective, but they still need to be assessed carefully based on location, quality, rental demand and long-term growth potential
Rentvesting: What Buyers Need to Know
Rentvesting has become a popular strategy for younger buyers and first home buyers who want to enter the property market without giving up their preferred lifestyle location
This strategy usually involves buying an investment property in a more affordable suburb while continuing to rent in an area closer to work, family, lifestyle or transport.
The negative gearing changes will make this pathway more challenging for some buyers who are relying on established investment properties as their entry point into the market
If tax benefits are reduced for established homes, buyers will need to place more emphasis on cash flow, rental yield, deposit size and long-term growth potential
New builds will become more attractive for rent-vestors from a tax perspective, but they still need to be assessed carefully.
Rentvesting Takeaway
Rentvesting can still be a useful strategy, but buyers will need stronger advice, clearer numbers and a better understanding of whether a new build or established property suits their goals
First home buyers should also seek advice around eligibility for any government schemes, as some incentives may not apply if the property is being purchased as an investmen
How These Changes Will Influence the Market
While the Budget is designed to improve housing affordability and direct more investment into new housing supply, the flow-on effects will be felt differently across the market.
For some first home buyers, reduced investor competition for established homes may create more opportunity
For investors, established properties will need to be reviewed more carefully, particularly if tax benefits are reduced or losses can no longer be offset against broader income in the same way
For renters, the impact is more complex. If fewer investors purchase established rental properties, some areas may experience tighter rental supply.
For property owners, the key question is whether the likely buyer pool for their property changes
Some established homes may attract stronger owner-occupier demand, while other properties that traditionally appeal to investors may need to be positioned more carefully
Market Takeaway
These changes will not remove demand for housing overall.
Instead, they are likely to shift demand between investors, owner-occupiers, first home buyers, renters and new-build purchasers
Key Terms Explained
Negative Gearing
Negative gearing occurs when the costs of owning an investment property are higher than the income it produces
For example, if an investor receives $800 per week in rent but their loan interest, rates, insurance and other holding costs total $1,000 per week, the property is running at a loss.
Under current arrangements, many investors have been able to offset that loss against other taxable income, such as wages
The Budget changes are designed to limit this benefit for established properties and keep stronger tax support in place for new residential builds
Capital Gains Tax
Capital Gains Tax, often called CGT, is the tax payable on the profit made when an asset is sold
For property, this generally applies to investment properties, not a person’s main home
Under the current system, individuals who hold an investment asset for more than 12 months can usually access a 50% CGT discount.
The Budget replaces this with an inflation-based model from 1 July 2027, where gains are adjusted for inflation rather than receiving a flat discount.
Grandfathering
Grandfathering means existing arrangements continue to apply to people who already held an asset or investment before the new rules were introduced
For property investors, this is important because existing investment properties held before Budget night will continue under the current tax settings until the property is sold.
This is designed to reduce market shock and avoid forcing immediate changes on current property owners.
Inflation Indexation
Inflation indexation means adjusting a property’s purchase price to reflect inflation over time
Instead of applying a flat 50% CGT discount, the new model will tax gains above inflation.
This means investors will be taxed on the “real” gain, rather than the portion of growth that simply reflects rising prices across the economy
New Build
A new build generally refers to a newly constructed residential property that has not previously been lived in or sold as an established home
Under the Budget changes, new builds will retain stronger tax benefits to encourage investment into new housing supply
Why Local Market Conditions Still Matter
National policy changes will influence buyer and investor behaviour, but property markets are still highly local
A suburb with strong population growth, limited housing supply, good schools, employment access, lifestyle appeal and rental demand may respond very differently to a suburb with oversupply or weaker demand
This is why property decisions should not be based on tax changes alone
For owners, the key question is how your property is positioned in the current market
For buyers, the key question is whether the property fits your budget, lifestyle and long-term goals
For investors, the key question is whether the numbers still work after tax, holding costs, rental income and future growth potential are considered.
Local Market Takeaway
The Budget will change the strategy, but the fundamentals still matter
Location, supply, demand, cash flow and timing remain central to every good property decision
What Should You Do Next?
The Budget does not mean you need to rush into a decision.
It does mean staying informed is important.
Before buying, selling or investing, consider speaking with your accountant, financial adviser or property professional to understand how the changes apply to your situation
If you already own an investment property, it is worth reviewing your current position and understanding how the grandfathering rules apply to your current property or investment position
If you are thinking about buying, consider whether an established property or new build better suits your goals.
If you are thinking about selling, it is useful to understand how buyer demand is shifting in your local area.
At REMAX Aspire, we are here to help you understand the local market and make confident property decisions
Important Reminder
This information is general in nature and is intended to provide a broad overview of the Federal Budget housing changes
It should not be relied upon as financial, tax or legal advice.
Before making any property, investment or taxation decisions, we recommend speaking with your accountant, financial adviser or solicitor.
We’re Here to Guide You
Whether you own, invest or are planning to buy, the latest Federal Budget will influence the property market over the coming years
For a clear, local perspective, reach out to the REMAX Aspire team
We can help you understand:
How your property is positioned in the current market
What buyer demand looks like in your area
How investor activity is shifting
Whether now is the right time to buy, sell or hold
What local property trends could mean for your next move WANT