2026 Budget: What It Means for Investors

The 2026 Federal Budget has introduced some of the most significant changes to property tax settings in years, with major updates to negative gearing and capital gains tax set to reshape how investors approach the market.

Under the new plan, negative gearing will no longer apply to most established properties bought after budget night. Instead, tax deductions for investment losses will mainly be limited to newly built homes. Existing investors won’t be affected straight away, with “grandfathering” rules protecting current arrangements.

Capital gains tax is also being reworked. The current 50% discount on long-term investment gains will be replaced with a system that adjusts for inflation. The aim is to tax real gains more fairly rather than nominal increases. These changes are expected to apply from July 2027.

The Government says the reforms are about improving housing affordability and encouraging more housing supply. By shifting investor incentives towards new builds, they hope to support construction and help more Australians enter the market.

Not everyone is convinced. Some in the property industry believe the changes could reduce investor activity in established homes, which may flow through to the rental market and tighten supply in already competitive areas.

For markets like Perth, where demand is already strong and rental stock is tight, the impact will be closely watched. Any shift in investor behaviour could influence both rental availability and new development activity over the next few years.

While the full effects will take time to play out, the direction is clear — housing policy is now firmly in the spotlight, and both buyers and investors will need to adjust to a changing landscape heading into 2027.