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Proposed Federal Budget Housing Reforms 2026: What Buyers Need to Know

Industry News 29 May 2026
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This communication is for general information purposes only and reflects proposed Federal Budget measures that are subject to change and have not yet been legislated. It does not take into account your personal objectives, financial situation, or needs and should not be relied upon as financial, taxation, or investment advice. You should seek independent professional advice before making any property or investment decisions.

The 2026–27 Federal Budget includes a range of proposed housing and taxation measures with an emphasis on boosting housing supply and supporting access to home ownership. While several measures may affect property buyers and investors, many remain subject to parliamentary review and legislative approval.

At Satterley, we are closely monitoring the proposed reforms and their potential impact on buyers, investors and the delivery of new communities across Australia, and we’ve outlined some key impacts:

For Owner-Occupiers:

  • No Capital Gains Tax: The main residence exemption is unchanged. You will not pay any capital gains tax when you sell your own home.
  • Negative gearing: Not applicable when you live in the property yourself.
  • Deposit Help: The expanded 5% Deposit Scheme continues to be available, helping you purchase a home with a smaller deposit and without paying lenders mortgage insurance. The $2 billion Local Infrastructure Fund is designed to help bring new communities to market faster.
  • Potential indirect benefit: Restrictions on investor tax breaks for established homes may reduce some competition from investors at the point of purchase.
  • Tax relief: A permanent $250 Working Australians Tax Offset will apply from the second half of 2027, and a new $1,000 instant tax deduction for work-related expenses takes effect from 2026–27.

Under the proposed framework, negative gearing concessions for residential property investment may be limited to newly constructed homes from July 2027. If enacted, eligible investors purchasing new homes or land to build may continue to offset investment losses against taxable income, while established properties may no longer receive the same treatment.

  • Capital Gains Tax (CGT):  For newly built homes, investors may have the flexibility to use either the existing 50% CGT discount or the new cost-base indexation method with the minimum 30% tax, whichever delivers the better financial outcome. Final details will depend on legislation and individual circumstances.
  • Negative Gearing: Fully retained. This means investors may be able to offset rental losses against their income when purchasing new residential properties, subject to final legislation.

For first home buyers or those re-entering the property market (Owner-Occupiers only), this scheme provides extra assistance by reducing the amount of money needed to purchase a property by sharing the cost with the government.

This means lower up-front cost, a smaller mortgage and lower repayments. Purchasers can buy with as little as 2% deposit (including the FHOG) and no Lenders Mortgage Insurance (LMI).

Eligible participants in Perth can purchase homes up to $850,000, and for the rest of WA it’s up to $600,000 (does not currently apply to residents in QLD, VIC, NT and NSW).

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New builds may hold stronger long-term appeal

With the proposed reforms expected to favour newly built homes, buyers entering the market now may well be positioned ahead of any future policy changes. Purchasing land in a masterplanned community also provides flexibility to create a home designed for modern lifestyles and future demand.

Designed for life within reach

With the Australian Government establishing a $2 billion Local Infrastructure Fund to help local governments and state utilities build essential infrastructure to support new housing, it will assist in connecting essential services such as water, power, sewerage and roads to key growth corridors. This funding will support up to 65,000 homes over the decade.

Satterley communities are carefully planned in locations selected for long-term growth, with access to schools, parks, transport connections, retail and lifestyle amenities that shape the way communities come to life. We support connection, liveability and lasting value for both homeowners and investors.

 

 

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