Many of you may have questions about the 2026–27 Federal Budget and, in particular, how this year’s proposals may affect property investing.
Below you will find a summary of the key changes, along with our observations and what these measures could mean for your investment going forward.
Please note that many measures are still proposals only and have not yet become law.
2026 Federal Budget – Key Changes
Click to view the 2026 Federal Budget Changes table.
2026 Federal Budget Changes table here.
Capital Gains Tax on Investments
Current Rules:
50% CGT discount after holding assets > 12 months.
Proposed Changes:
From 1 July 2027, future gains may move to indexation + a minimum 30% tax.
Who May Be Affected:
Investors.
Negative Gearing
Current Rules:
Rental losses can offset salary income.
Proposed Changes:
Future purchases of established properties can no longer offset salary income.
Who May Be Affected:
Future property investors.
Existing Investment Properties
Current Rules:
Current rules apply.
Proposed Changes:
Eligible for negative gearing – expected to continue . Current CGT rules are expected to continue until 30 June 2027, with a combination of current and new provisions after 1 July 2027.
Who May Be Affected:
Current property owners.
New Build Properties
Current Rules:
Eligible for negative gearing.
Proposed Changes:
Expected to continue.
Who May Be Affected:
New property investors.
Family Trusts
Current Rules:
Flexible income distribution.
Proposed Changes:
Proposed minimum 30% tax from 2028.
Who May Be Affected:
Trust clients.
Individual Tax Rates
Current Rules:
Lowest tax rate currently 16%.
Proposed Changes:
Gradually reducing to 14%.
Who May Be Affected:
Employees.
Work-Related Deductions
Current Rules:
Receipts required.
Proposed Changes:
Up to $1,000 standard deduction without substantiation.
Who May Be Affected:
Employees.
Tax Offset
Current Rules:
None.
Proposed Changes:
New $250 Working Australians Tax Offset.
Who May Be Affected:
Employees and sole traders.
Small Business Asset Write-Off
Current Rules:
Temporary $20,000 threshold.
Proposed Changes:
Becoming permanent.
Who May Be Affected:
Small businesses.
Company Losses
Current Rules:
Limited relief.
Proposed Changes:
Loss carry-back reintroduced.
Who May Be Affected:
Companies.
Electric Vehicle FBT
Current Rules:
Significant EV concessions.
Proposed Changes:
Concessions reduced from 2029.
Who May Be Affected:
EV users.
Please Note
Currently, most measures are still proposals and have not yet been legislated, and may be subject to further change.
We will continue monitoring further announcements and legislative updates.
Our Concerns and What May Happen if These Changes Are Legislated
In our view, if these measures are legislated, rents are likely to rise as investor activity in the established property market decreases and rental supply tightens. The underlying issue driving high housing price and costs and rents is a shortage of supply. Rather than addressing this root cause, the proposed measures risk discouraging hard-working Australians who have saved diligently and chosen to invest in property.
As demonstrated in the enclosed video, Prime Minister Albanese appears to have broken his pre-election promise on this matter, which may have significant political consequences.
This will only diminish the saving power of aspiring first homeowners already scrimping and saving to get their first foot on the property ladder.
Further Reading & Videos
Liberal Party of Australia
https://www.facebook.com/reel/985654007256372
REIQ (Real Estate Institute of Queensland)
Tom Panos (Real Estate Agent influencer)
New Zealand already tested a version of this policy.
They removed key investor tax deductions with the promise that housing affordability would improve and first-home buyers would benefit. Instead, investor activity dropped, rental supply tightened, and rents increased.
So much so that they eventually reversed the policy and restored deductibility.
Now Australia is heading down a remarkably similar path.
