13 May 2026
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The 2026 Federal Budget is out and for first home buyers, it’s a mixed picture. Government incentives like the 5% Deposit Scheme are continuing, which is good news. But changes in the investor space will have a flow-on effect that matters to you, even if you’re nowhere near thinking about investment properties.
Here’s what’s changing, what it means for renters and buyers, and where you stand.
Rents are likely to go up
The biggest budget change affects investors in established properties. From 12 May 2026, negative gearing on established homes is gone. In plain English: investors can no longer use losses on their property to reduce their tax bill each year.
New builds? They keep everything.
That gap matters, because when investing in established property becomes less profitable, landlords tend to look for their returns elsewhere. Usually, that means raising the rent.
On top of that, with the government now steering investors toward new builds, pressure on land availability is only going to increase. Less land. More demand. That affects you too.
So what has actually changed?
Under the old rules, the tax treatment between new and established properties was similar enough that the choice often came down to personal preference. That’s no longer the case.
Negative gearing For established properties purchased from 12 May 2026, losses can no longer offset your income tax each year. For new builds, negative gearing stays fully intact, meaning your real out-of-pocket holding costs are lower.
Capital gains tax When you sell an established property purchased after July 2027, the 50% CGT discount is gone, replaced by an inflation-indexed model. For a new build, you keep the 50% discount, or choose the indexed method if it works out better at the time of sale.
The gap between new and established has grown considerably. It means the economics of building new have pulled decisively ahead. Which is going to create an increased demand. Again.
“But my landlord doesn’t use negative gearing…”
It is hopeful to think that if your landlord is unaffected by the tax reforms that your rent won’t be hit.
However, what many are predicting that as some rents lift, the market as a whole will too. Rising median prices have a way of flowing through, and renters are always the ones who feel it first.
This isn’t a maybe. It’s a matter of when.
So what can you do to control your financial future?
Well, the best time to act is before July 2027. That time is now.
If you have been thinking that it is time to become your own landlord instead of funding someone else’s property, don’t wait for the policy to kick in to start moving. Don’t wait for the pain of the extra weekly rent to hit.
By then, the market will have caught up, property prices will have shifted, and your own home might be further out of reach.
It’s not all bad news
Despite the investor changes, the government is continuing to back first home buyers. The 5% Deposit Scheme and Help to Buy are both being extended.
The government says the reforms will help 75,000 Australians buy their first home. Combined with infrastructure spending and faster approvals, the budget is expected to put an extra 30,000 homes on the map over the next decade.
Also, in Western Australia, first home buyers building new may be eligible for (recently updated) stamp duty concessions that don’t apply to established properties. Depending on the value of your home, that’s a meaningful saving upfront.
Not sure where this leaves you?
That’s exactly what we’re here for. If this has raised more questions than answers, come and talk it through with our team. No jargon, no pressure, just a clear picture of where you stand and what your next step could look like.
We’ll guide you from your first question to your front door.
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