Markets are digesting the fallout from last week’s federal budget for the 2026 to 2027 financial year, with investors and industry leaders closely assessing what could be some of the most significant property tax reforms in decades.
Delivered against a backdrop of persistent inflation, mounting cost-of-living pressures and heightened global economic uncertainty, the budget unveiled sweeping changes aimed at reshaping Australia’s housing and investment landscape. Chief among them was the government’s decision to scrap the blanket capital gains tax (CGT) discount and limit negative gearing concessions exclusively to newly built properties.
The measures have sparked immediate debate across the finance and property sectors, with supporters arguing the reforms could improve housing affordability, while critics warn they may deter investment, raise rental prices and disrupt market confidence.
Australian Broker spoke to market participants and industry experts to gauge their reaction to the landmark announcements.
Chief executive of mortgages and commercial lending at non-bank lender Pepper Money
"With changes to capital gains tax, including a move from the 50% discount to inflation indexation from 2027, alongside tighter negative gearing settings, some investors may reassess the appeal of highly leveraged property investments held in personal names. As a result, brokers can expect more conversations about how investments are structured, not just what is being bought. For some investors, that will mean looking beyond individual ownership and becoming more comfortable with lending in companies, trusts and self-managed super funds (SMSFs). SMSF property investing, in particular, is likely to attract interest from a smaller group of sophisticated, longer-term investors, because SMSFs continue to benefit from relatively favourable tax treatment, including a one-third capital gains tax discount and potential tax-free outcomes in [the] pension phase.
That said, super fund lending remains a specialist strategy. It comes with strict compliance requirements, contribution limits and advice obligations, and it won’t suit every client. It’s likely some high-net-worth or strategic investors will at least explore super funds, or alternative ownership structures, to manage tax outcomes. That puts more responsibility on brokers to understand how these structures work, and to partner with lenders who can support them with helpful loan options.
The budget creates both urgency and evolution. In the near term, brokers who move quickly can help investors navigate change and lock in opportunities before transitional settings expire. Over time, success will increasingly depend on structural knowledge: understanding different ownership vehicles, lending outside personal names and when non-bank options make sense. Change brings complexity, but it also brings opportunity. Brokers who invest in capability now, communicate clearly with clients and choose the right lender will be well placed to support investor clients."
Chief executive officer at aggregator group Finsure
"Major housing-related tax changes in the federal budget through significant reforms to negative gearing and capital gains tax means the role of a broker has never been more important. Overall, the budget has not made the market easier, but reinforces the importance of brokers being proactive, not reactive. There are clear opportunities in first-time homebuyer activity, new-build lending, regional housing, small business finance and serviceability support. But major tax changes could also alter investor appetite, client behaviour and the way brokers discuss long-term property decisions. First-time homebuyers are likely to remain a key market, particularly if investor demand shifts and housing initiatives continue to shape buyer behaviour. Brokers should be tailoring their marketing, education and client engagement toward buyers who need guidance through deposits, grants, schemes, serviceability and lender selection.
Investor clients will need more strategic conversations. The shift in negative gearing and CGT treatment means brokers should not give tax advice, but they should be encouraging clients to seek advice early and consider how future settings may affect borrowing, refinancing, buying, selling or holding decisions. New builds will become more important. Brokers who understand construction lending, progress payments, land registration, valuation risk, builder due diligence and new-build investor policy will be better placed to capture demand."
Head of tax and legal at The Tax Institute
"This federal budget is one of the more significant budgets in some time when it comes to tax changes. There are some good ideas, some shocking bombshells, but overall, a mixed bag as far as tax policy is concerned. We’re pleased to see housing affordability in the spotlight, and some worthwhile simplifications are being implemented for workers and small businesses. It appears that the government has opened the door for a real discussion on reform. But overall, what was announced falls short of the holistic system-wide tax reform we sorely need. Some of [the] changes are likely to add further complexity to our tax system, and some will be highly controversial."
Executive director at aggregator group Connective
"This budget is trying to shift how Australians approach property, particularly when it comes to investors and long-term affordability. Changes to capital gains tax and negative gearing are expected to influence how people buy, invest and borrow. For first-time homebuyers, it means they could face less competition from investors in established properties. For investors, we’re likely to see more focus move towards new builds, where incentives still apply.
Clients are trying to make sense of a lot at once, and they’re looking for clear, practical guidance. Brokers who step in early, explain what’s proposed in plain terms and help clients work through their options will be the ones who build trust and stay ahead.”
Chief executive officer at Mortgage and Finance Association of Australia (MFAA)
"This is a significant budget with major changes across housing, tax, cost of living and small business. While we are still working through the details, there is no doubt many Australians will be asking what these changes mean for their household budget, borrowing capacity, investment decisions, refinancing options and small business plans. For many people, the question will not be what the budget means in theory, but what it means for their home loan, their investment property, their business, their cash flow or their future plans. The test for these reforms is whether they improve access to housing in practice without reducing the flow of investment into new supply. Any changes to negative gearing and capital gains tax need to be carefully calibrated to avoid unintended consequences for housing supply, rental availability and investor confidence. Brokers are often one of the first people borrowers, investors and small business owners turn to when policy settings change. Clear guidance, careful implementation and appropriate transitional arrangements will be critical.”
