The 2026 Federal Budget just dropped some of the most significant property and tax changes we've seen in years. Whether you're an investor, a first home buyer, or just trying to figure out what it all means for you — here's the plain-English version.
Quick heads up: Most of these changes are still proposed — they haven't passed into law yet. That said, they're significant enough that it's worth understanding now so you can plan ahead, especially anything coming into effect from 1 July 2027.
The big investor changes
If you own investment properties — or are thinking about buying one — this is the section you need to read carefully. The Government has proposed some fairly major changes to negative gearing and capital gains tax.
Negative gearing is changing
From 1 July 2027, negative gearing will only fully apply to newly built properties. If you buy an established investment property after Budget night, the rules are different.
Properties you already own are safe
Any investment property you held before Budget night is completely unaffected. Nothing changes for your existing portfolio.
New builds still get full negative gearing
Buy a newly constructed property and you keep all the current negative gearing benefits. House-and-land packages and off-the-plan purchases are still fully in play.
Established properties purchased after Budget night
If you buy an established investment property now, losses can still be offset against rental income — but you can no longer deduct them against your other income like wages. Unused losses can still be carried forward to future years, they just can't reduce your salary income.
Capital gains tax is also changing
The current 50% CGT discount — which investors have relied on for decades — is also being overhauled from 1 July 2027.
Buying a new build?
Good news — the existing 50% CGT discount arrangements still apply to newly built dwellings.
- 50% discount stays in place
- Same rules as today
- Powerful incentive to buy new
Buying established?
The 50% flat discount is replaced with an inflation-adjusted method, plus a minimum 30% tax rate on gains.
- No more flat 50% discount
- Inflation-adjusted instead
- 30% minimum tax rate on gains
What does this mean in practice? Investors are going to be steered toward new builds — both the negative gearing and CGT concessions are designed to make new construction more attractive than buying established. If you're an investor, your strategy, ownership structure, and finance setup matter more than ever. Talk to your mortgage broker, accountant, and financial adviser before making a move.
Good news for first home buyers
While investors navigate new rules, the Budget has some genuinely positive news for people trying to get into their first home.
The 5% Deposit Scheme is continuing
Eligible buyers can still purchase with just a 5% deposit and skip Lenders Mortgage Insurance entirely. LMI can easily cost tens of thousands of dollars, so this is a meaningful saving. If you've been waiting to hit the 20% mark, it's worth checking whether you already qualify.
Less investor competition in established properties
By reducing tax incentives for established investment properties, the Government says the reforms should help around 75,000 additional Australians become homeowners over the next decade. Less investor competition in that part of the market could mean more opportunities for owner-occupiers.
A common mistake: Many buyers assume they need a 20% deposit, perfect finances, or years more savings before they can enter the market. In reality, there are usually more options available than people realise. Even if you're not ready to buy today, understanding your borrowing capacity and what government schemes you qualify for can help you make a concrete plan.
More housing supply on the way
The Budget also puts serious money into building more homes — which matters for buyers and investors alike over the medium term.
| Initiative | What it means |
|---|---|
| $2 billion Local Infrastructure Fund | Funding for the roads, water, and utilities that unlock new housing developments — particularly in growth corridors. |
| 65,000 additional homes | Investment in infrastructure to support up to 65,000 new homes over the decade. |
| Social and affordable housing | Continued funding for below-market housing, including housing-enabling infrastructure and faster development approvals. |
| Faster approvals | Support for cutting through planning delays that slow down new supply from reaching the market. |
None of this happens overnight — but for anyone thinking about buying land, building new, or investing in growth corridor developments, these measures create a longer-term tailwind worth paying attention to.
Self-employed? Here's what changed for you
The Budget included several measures aimed directly at small business owners and the self-employed — and they have implications beyond just your tax return.
Instant asset write-off extended
The $20,000 instant asset write-off has been extended, giving small businesses another tool to manage cash flow and reduce taxable income.
- $20,000 threshold maintained
- Reduces taxable income immediately
- Helps manage cash flow
More flexibility on PAYG instalments
More flexible PAYG instalment options plus loss carry-back rules mean better cash flow management for self-employed borrowers.
- Flexible PAYG options
- Loss carry-back rules
- Startup tax relief
Why this matters for your home loan: Self-employed borrowers are consistently one of the most misunderstood groups in lending. Better business cash flow and improved financials can meaningfully strengthen your servicing position. And there are lenders who specialise in self-employed applications — using alternative income verification, or assessing just one year of financials. If you've assumed a home loan is out of reach as a business owner, it's worth having a fresh conversation.
Cost of living relief and borrowing power
The Budget also includes broader cost-of-living measures — tax offsets for workers, instant tax deductions, and household relief measures. These might not seem directly connected to mortgages, but they can shift things in a meaningful way.
Even modest improvements in monthly cash flow can improve how a lender assesses your loan servicing. More disposable income means more savings capacity. More savings capacity means a stronger application. It's not dramatic, but every bit helps in the current environment.
Is your current loan still right for you?
With lending policies, interest rates, and tax settings all shifting at the same time, a lot of Australians are taking stock of where they stand. A home loan that made sense two years ago might not be the best fit today.
You might be able to reduce your repayments
Rates and lender appetites have shifted. A mortgage review can identify whether there's a better rate or product available to you right now — often without much disruption to your day-to-day.
You might have more equity than you think
Property values have moved in many markets. If yours has grown, you may be able to access equity for renovations, an investment property, or other goals — without refinancing your whole loan structure.
Investors especially should review before 2027
With the proposed negative gearing and CGT changes coming into effect from 1 July 2027, reviewing your investment structure now — not two weeks before the deadline — gives you time to make informed decisions about your portfolio strategy.
Not sure where to start? You don't need to have everything figured out before you reach out. Whether you're buying, investing, refinancing, or just trying to understand what these Budget changes mean for your situation — getting the right advice early almost always makes a difference to the outcome. We're here to help you work through it.
