Last updated: 12 May 2026
2026-27 Federal Budget
2026-27 Federal Budget: Property and Tax Changes Explained
Treasurer Jim Chalmers handed down the 2026-27 Budget on 12 May 2026, announcing what Treasury calls the most significant transformation of Australia's tax system in more than a quarter of a century. For first home buyers, property investors and renters, three measures sit at the heart of the package: negative gearing limited to new builds, the 50% CGT discount replaced with cost base indexation and a 30% minimum tax, and an extended ban on foreign purchases of existing homes.
The headline numbers
- 75,000 additional owner-occupiers over the next decade
- $19,000 saving for a buyer at the national median price
- $3.6 billion raised from negative gearing and CGT reforms over the forward estimates
- $4.5 billion raised from the discretionary trust minimum tax
- $2 billion new Local Infrastructure Fund (65,000 homes supported)
- $250 Working Australians Tax Offset for 13 million workers
- Foreign investor ban on existing dwellings extended to 30 June 2029
Key dates at a glance
| Date | Measure takes effect |
|---|---|
| 7:30pm AEST 12 May 2026 | Grandfathering date for existing negatively-geared property investors. |
| 1 July 2026 | $1,000 instant tax deduction begins. $20,000 instant asset write-off becomes permanent. |
| 1 April 2027 | Electric car FBT discount steps down from full exemption to 25% for EVs over $75,000. |
| 1 July 2027 | Negative gearing limited to new builds. CGT discount replaced with cost base indexation + 30% minimum tax. WATO begins. |
| 1 July 2028 | 30% minimum tax on discretionary trusts begins. |
| 30 June 2029 | Extended foreign investor ban on established dwellings ends. |
Read more
Negative gearing limited to new builds from 1 July 2027
Established rentals lose negative gearing. Existing investors are grandfathered. Losses on new investments will be quarantined.
Tax50% CGT discount replaced with indexation and a 30% minimum tax
Cost base indexation returns from 1 July 2027 and a 30% minimum tax on real capital gains is introduced.
First home buyersWhat the 2026-27 Budget means for first home buyers
75,000 extra owner-occupiers, a $19,000 saving on the median home, and the FHBG and Help to Buy expanded.
InvestorsProperty investors: what changes for your portfolio
A decision matrix across grandfathered, transitional and post-2027 purchases. What to model now.
LandlordsExisting landlords: how grandfathering actually works
What you keep, what you lose, and what triggers a loss of grandfathered treatment. Refinance, transfer, knock-down rebuild.
RetireesDownsizers and retirees: family home unchanged, pensioners exempt
Main residence exemption preserved, pensioners exempt from 30% CGT minimum, plus $3.7 billion aged care package.
RentersWhat renters get from the 2026-27 Budget
CRA up 50% since 2022, BTR pipeline of 80,000 homes, and a Treasury rent impact estimate of under $2 per week.
Market impactWhat the Budget does to house prices
Treasury models 2% slower growth and a $19,000 buyer saving at the national median. Where the price effect lands.
Foreign investmentForeign investor ban on existing homes extended to 30 June 2029
The temporary ban on foreign purchases of established dwellings is extended by two years and three months.
Supply$2 billion Local Infrastructure Fund to unlock 65,000 new homes
Water, power, sewerage and roads to support new estates – conditional on planning and zoning reform by the states.
Tax cutsWorking Australians Tax Offset (WATO): $250 cut from 2027-28
A new $250 offset targeted at income earned from work, raising the effective tax-free threshold to $19,985.
Tax cuts$1,000 instant tax deduction explained
From the 2026-27 income year, 6.2 million workers can claim $1,000 without receipts. Average benefit: $205.
RentalBuild-to-rent: 80,000 new rental homes planned over a decade
Strengthened affordability standards for tax measures supporting BTR developments, plus rent assistance increases.
Tax30% minimum tax on discretionary trusts from 1 July 2028
Trustees pay 30% on taxable income. Beneficiaries (other than corporates) get non-refundable credits.
See which schemes you qualify for
Answer a few questions and get a personalised strategy showing every scheme you can stack, how much you could save, and what to do first.
Start the free calculator2 minutes. No sign-up required.
Frequently asked questions
When was the 2026-27 Federal Budget handed down?
Treasurer Jim Chalmers handed down the 2026-27 Budget on 12 May 2026. Most property and tax measures take effect on 1 July 2027, with the discretionary trust minimum tax delayed to 1 July 2028.
What are the biggest property changes in the 2026-27 Budget?
Negative gearing is being limited to new builds from 1 July 2027, the 50% CGT discount is being replaced with cost base indexation and a 30% minimum tax on real capital gains, and the foreign investor ban on existing dwellings is extended to 30 June 2029. The Budget also adds a $2 billion Local Infrastructure Fund for housing-enabling infrastructure.
Are existing property investors affected by negative gearing changes?
No. Properties held at 7:30pm AEST on 12 May 2026 (Budget night) are grandfathered. The changes only apply to established residential properties bought after Budget night, and only from 1 July 2027 onwards.
How many first home buyers will the Budget help?
Treasury estimates an additional 75,000 owner-occupiers will enter the housing market over the next decade as a result of the tax reforms. Combined with the supply measures, the package is expected to support up to 30,000 new homes over the same period.
Will house prices fall because of the Budget?
Treasury modelling suggests house price growth will be around 2% lower over a couple of years compared to no policy change. That's a slower rate of growth, not an outright fall. At the current national median, a buyer would save around $19,000.
Source: Budget Paper No. 1, Statements 1 and 4, Australian Treasury, 12 May 2026.
Disclaimer: This information is general in nature and does not constitute financial, legal, or tax advice. Calculations are estimates only and may not reflect your exact circumstances. Eligibility criteria and dollar amounts may change without notice. Always verify with the relevant government authority, your mortgage broker, or a licensed financial adviser before making decisions.