Federal Budget 2026: What it means for home buyers, homeowners and property investors.

The 2026 Federal Budget has introduced some of the biggest proposed property and tax changes we’ve seen in years — particularly for investors and future home buyers.

From changes to negative gearing and capital gains tax through to expanded first home buyer support and housing supply initiatives, housing is firmly in the spotlight.

So, what does this actually mean for Australians looking to buy, invest, refinance or get ahead financially?

Here’s a breakdown of the key changes – and how they could affect your property plans.

Major changes for property investors

One of the biggest announcements in the Budget is the proposed overhaul of negative gearing and capital gains tax concessions.

Negative gearing changes
From 1 July 2027, negative gearing is proposed to:
• remain available for newly built properties, but
• no longer apply to established investment properties purchased after Budget night.

What this means
If an investor purchases an established property after the changes commence:
• losses can still be offset against rental income,
• but those losses can no longer be deducted against other income such as wages.

Unused losses can still be carried forward into future years.
Importantly, existing investment properties held before Budget night remain unaffected, and investors purchasing new builds will continue to receive full negative-gearing benefits.

Capital gains tax (CGT) changes.
The Government has also proposed changes to the current 50% CGT discount from 1 July 2027.

Under the proposed reforms:
• the 50% CGT discount would be replaced with an inflation-adjusted method,
• and a minimum 30% tax rate would apply to gains.
However, investors purchasing newly built dwellings would still be able to access the existing 50% CGT discount arrangements.

Why this matters for investors
These changes are likely to shift investor demand toward:
• newly constructed properties,
• house-and-land packages,
• and off-the-plan developments.

For investors, finance strategy and ownership structure may become more important than ever.

Now may be a good time to review:
• borrowing capacity,
• cash flow,
• long-term investment goals,
• and whether a new-build strategy could make sense moving forward.

This is where mortgage brokers can work alongside accountants and financial advisers to help clients plan strategically.

Good news for first home buyers

The Budget changes are also designed to improve accessibility for owner-occupiers and reduce competition from investors in some parts of the market.

Expanded 5% deposit scheme
The Budget confirms continued support for the 5% Deposit Scheme, helping eligible buyers purchase a property with:
• as little as a 5% deposit,
• and without paying Lenders Mortgage Insurance (LMI).

For many Australians, avoiding LMI could potentially save tens of thousands of dollars upfront.

Reduced investor competition
By limiting tax incentives on established investment properties, the Government says the reforms aim to:
• level the playing field for owner-occupiers,
• reduce investor competition,
• and help around 75,000 additional Australians become homeowners over the next decade.

What buyers should be doing now?
Many buyers still assume they need:
• a 20% deposit,
• perfect finances,
• or years of savings before entering the market.

In reality, there are often more options available than people realise.

Even if you’re not ready to buy today, understanding your borrowing capacity and available government schemes early can help you create a clearer plan for entering the market.

More housing supply could create opportunities.

Housing supply remains another major Budget focus.

The Government announced:
• a new $2 billion Local Infrastructure Fund,
• investment in utilities and infrastructure,
• and support for up to 65,000 additional homes over the decade.

There is also continued funding toward:
• social and affordable housing,
• housing-enabling infrastructure,
• and faster development approvals.

What this means for the market
While supply improvements won’t happen overnight, these measures may:
• create more opportunities for buyers over time,
• support construction activity,
• and increase opportunities in growth corridors and new developments.

For buyers considering building, purchasing land or investing in new developments, understanding how lenders assess construction loans and progress payments will become increasingly important.

What self-employed and small business owners should know

The Budget also introduced several measures aimed at improving cash flow for small businesses and self-employed Australians.

Key measures include:
• extension of the $20,000 instant asset write-off,
• loss carry-back rules,
• startup tax relief,
• and more flexible PAYG instalment options.

Why this matters for home loans
Self-employed borrowers are often one of the most misunderstood groups when it comes to lending.

Improved business cash flow and tax flexibility may help strengthen:
• business financials,
• servicing position,
• and overall borrowing readiness.

Many business owners don’t realise there are lenders who:
• use alternative income verification methods,
• assess only one year of financials,
• or specialise in self-employed lending.

Cost of living relief and borrowing capacity

The Budget also includes broader cost-of-living measures, including:

• tax offsets for workers,
• instant tax deductions,
• and household relief measures.

While these may not seem directly related to mortgages, they can influence:
• disposable income,
• savings ability,
• and borrowing power.

For some borrowers, even small improvements in monthly cash flow can improve loan servicing outcomes.

Why reviewing your loan matters more than ever
With lending policies, interest rates and tax settings evolving, many Australians are reassessing their financial position.

A home loan that suited you two years ago may no longer be the best fit today.

A mortgage review could potentially help:
• reduce repayments,
• improve cash flow,
• access equity,
• consolidate debts,
• or better position your finances for future goals.

For investors especially, reviewing structures before the proposed 2027 tax changes could become increasingly important.

Thinking about your next move?

With so many proposed changes on the table, it’s understandable that many Australians are wondering what it all means for their next move.
Whether you’re buying, investing, refinancing or reviewing your current loan, getting the right advice early can make a big difference.
If you’d like to understand how the 2026 Federal Budget could impact your mortgage, investment strategy or future buying plans, we’re here to help.