05/06/2026
The Federal Budget Has Everyone Talking, But What Happens Next?
I have to admit, my initial reaction was, “Wow — this could have some serious implications for property investors, small businesses, and renters.” To be honest, I still believe it could. However, after speaking with our accountant, and another accountant as well, their first piece of advice was simple: none of these changes have passed Parliament yet. The reforms still need to pass both houses, and there may well be pushback or amendments before anything becomes law. At this stage, we almost have to wait and see.
The other thing I’ve noticed is the amount of discussion across social media, news outlets, and local Facebook community pages. It’s a reminder that very few of the people making strong statements are actually qualified to provide reliable advice on taxation, wealth planning, or the broader economic and social impacts these changes may create.
I’m probably one of those people too. I have what I believe is an educated opinion on what might happen, but by no means am I qualified to tell people what they should do financially or how these proposed changes will affect their personal circumstances. Everyone’s situation is different.
That’s why I strongly encourage people to seek professional advice. Speak with your accountant, financial adviser, and solicitor about how these proposed reforms could affect your individual plans and investments.
From my perspective, one thing remains clear — Australia currently has a housing shortage, and that shortage continues to drive property prices and rental prices higher. A shortage of homes for sale keeps property values strong, and a shortage of rental properties pushes rents up as well. At its core, real estate is still very much a supply-and-demand market. When supply is low and demand is high, prices rise.
So the million-dollar question is this: how does taxing investors more heavily increase housing supply?
If investors begin selling rental properties, what happens to the renters currently living in them? What happens to rental prices if supply tightens even further? These are important questions that need to be considered as part of the broader conversation.
As a side note, the majority of landlords we represent are what I would call “mum and dad” investors. Most are Baby Boomers with little to no superannuation. Their one or two investment properties — if they are fortunate enough to own them — effectively form part of their retirement plan or future pension.
These people have often made significant sacrifices over many years to get into that position. They are not large corporations, wealthy institutional investors, or overseas buyers. In fact, overseas investment into established residential property has become extremely difficult in recent years. Personally, I can say we do not have a single overseas investor on our books, and I would not be surprised if many other local agencies are in the same position.
One of the key themes from the Government is reducing intergenerational wealth inequality. I find that discussion interesting because, while I’m fortunate enough to own rental properties in regional Queensland that are positively geared, rising interest rates, insurance premiums, and council rates have certainly reduced those returns significantly.
At the end of the day, whatever wealth people manage to build over a lifetime will most likely benefit their children and grandchildren anyway.
The other point worth considering is superannuation. Many Baby Boomers have relatively modest super balances compared to younger generations who have benefited from compulsory superannuation throughout most of their working lives. It raises an interesting question: has anyone actually compared the projected retirement wealth of future generations, such as Gen Z, against the retirement position of many current Baby Boomers?
It’s an interesting equation because I’m not entirely convinced Baby Boomers are sitting on the level of future wealth many people assume they are.
Again, I cannot stress enough — before making any decisions, speak with qualified professionals about your personal situation and seek advice tailored specifically to you and your long-term plans.
- Proposed Federal Budget Changes (Subject to Parliamentary Approval)
- According to the Federal Budget announcements, the proposed changes include:
- Negative gearing on established residential properties would be limited from 1 July 2027.
- Investors purchasing new builds would still retain access to negative gearing benefits.
- Existing investment properties purchased before Budget night (12 May 2026) would be grandfathered under the current rules.
- The current 50% Capital Gains Tax (CGT) discount would be replaced with an inflation-indexed system from 1 July 2027.
- A minimum 30% tax on capital gains is proposed under the new system.
- Losses on established investment properties purchased after Budget night may only be offset against future property income or capital gains, rather than wages or salary income.
- The Government says the changes are aimed at improving housing affordability and encouraging investment into new housing supply.
Critics argue the reforms could reduce investor confidence, impact rental supply, and place upward pressure on rents.
Article written by David Wereszczuk
Sales/Business Owner of Remax Advanced
0407 657 455 | [email protected]
