This month has been one of the most significant in recent memory for Australian property owners and buyers. With another interest rate and major Federal Budget announcements, the landscape is shifting quickly.

Related to the key changes on Federal Budget 2026-2027, there are some information you need to know. Handed down on 12th May, the Federal Budget introduces several reforms impacting property owners, investors and businesses.

 

NEGATIVE GEARING & CAPITITAL GAINS TAX

Effective from 1st July 2027, below new rules will be applied to residential property investment:

  • Negative gearing on established properties will no longer be deductible against personal income.
  • New builds remain exempt, continuing to benefit from current 50% CGT discount.
  • Properties owned before 12 May 2026 – 07:30PM AEST (entered, even if not yet settled) are grandfathered under existing rules until sold.
  • CGT will be in transition to an inflation-adjusted system with minimum of 30% tax rate.
  • Changes apply only to gain accrued after 1 July 2027.

Tip : discuss with your accountant or financial advisors to understand how this affects your business and situation.

 

FOR 1ST HOME BUYER

The support for 1st home buyers will be continued as below:

  • 5% deposit Home Guarantee Scheme remains in place – no LMI (Lenders Mortgage Insurance) required.
  • $2 billions investment into housing infrastructure to deliver 65,000 new homes.
  • Continue ban on foreign investors to purchase existing homes – this is to help reduce competition in the established housing market.

 

PROPERTY MARKET PERFORMANCE

Market conditions are starting to soften. According to research, affordability constraints and rising borrowing costs are continuing to weigh on demand.

  • National home values rose by 0.3% in April. This is the slowest growth in over a year.
  • Sydney and Melbourne are declined by 0.6%, dragging down overall performances.
  • Mid-sized capitals are also losing momentum.

With these policy changes, rising interest rates and a slowing market; it is more important to stay informed and make strategic decisions.

Whether you are reviewing your current home loan, planning your next home purchase or simply trying to understand your position, ZIP REALTY is ready to help you navigate your next step with confidence.