2026 Federal Budget and What it Means For Property Investors
An image of the Australian Federal Budget for 2026-27
Last night's Federal Budget delivered one of the most significant shifts to property investment policy in over a decade. Combined with WA's own changes already in effect from 7 May, the landscape looks materially different depending on where you sit.
Here's a clear breakdown, no jargon, just the facts.
Federal Changes Effective 1 July 2027
These changes apply to properties acquired after Budget night, 12 May 2026. Existing portfolios are grandfathered.
Negative gearing is now limited to new builds only. If you purchase an established property after last night, you can still deduct losses — but only against other residential property income, carried forward. You can no longer offset those losses against your wage.
Capital gains tax is also being restructured. The existing 50% CGT discount is being replaced with an inflation-based discount, with a minimum 30% tax applying to gains arising after 1 July 2027. New-build investors get a choice between the new regime and the 50% discount — a meaningful advantage for those buying new construction.
For those holding property in discretionary trusts, a minimum 30% tax will apply from 1 July 2028, with three-year rollover relief available from July 2027.
WA Changes Already in Effect from 7 May 2026
Western Australia moved ahead of the Federal Budget with its own set of changes, and for buyers in this state, they're largely positive.
First Home Buyer stamp duty thresholds have increased by $100,000. The First Home Owner Grant cap rises to $800k (up from $750k) and has been decoupled from duty concession eligibility. The off-the-plan concession has been extended to 30 June 2028, offering 100% relief up to $800k and tapering to $900k, and now includes survey-strata properties such as duplexes, triplexes and villas. A new foreign buyer duty exemption also applies where the dwelling adds to housing supply.
What this means for you
Existing property owners (purchased before 12 May 2026): Your portfolio is grandfathered. The new rules don't apply to what you already hold. Direct any specific questions to your accountant.
First home buyers: This is genuinely one of the strongest positions first home buyers have been in for years. WA and Federal incentives can be stacked, and new builds and off-the-plan properties in the $800k–$900k range represent a compelling opportunity right now.
Investors buying new builds: The tax-advantaged path remains open. Full negative gearing is maintained and you get the choice of CGT regime. New construction continues to be a strong strategic play under the new rules.
Investors considering established property (post-12 May 2026): This is where the detail matters most. Losses will be ring-fenced to residential property income from July 2027 — they can no longer be used to offset wages. Before moving forward, thorough cash-flow modelling with your accountant is essential.
Developers: Federal policy now explicitly favours new builds, and WA's off-the-plan concession has been extended. Both levels of government are signalling a demand tailwind for new stock.
Trust-held portfolios: A minimum 30% tax applies from July 2028. You have approximately 12 months to have a meaningful restructure conversation with your accountant — don't leave it too long.
Our Take
Budget nights create noise. The headlines are already dramatic. But for property investors who approach this with the right strategy, there is still a very clear path forward.
The fundamentals haven't changed — long-term wealth creation, income replacement, financial freedom through property. What has changed is the structure of how you get there, and that makes quality advice more important than ever.
We're not tax advisers, and we'll always refer you to your accountant for anything specific to your structure or situation. But if you want to understand what opportunities exist under the new landscape, our team is here.