Federal Budget 2026: All the positives and negatives for homeowners

The family home has been protected from property tax changes in Jim Chalmers’ Federal Budget – albeit rising interest rates are making life tough servicing the Great Australian Dream.

But Mums and Dads hoping to build wealth by buying an investment property have a bit to think about, after the goal posts changed on Tuesday night.

Anyone who currently has an investment property won’t be affected by new negative gearing changes.

But the negative gearing tax break for investors will no longer be available on established properties come July 1 next year.

Negative gearing will instead only apply to new builds, like houses and land packages and new apartments.

And it’s no point rushing out to buy an investment property over the next 14 months to get in before the July 1 changes: any investment property bought after budget night will be affected by the new rules.

The 50 per cent capital gains tax discount will also be abolished come July 1 – replaced by a discount based on inflation-adjusted indexation.

Treasurer Jim Chalmers says the budget is about levelling the playing field for young Australians wanting to buy a home – better able to compete against cashed up investors buying up multiple homes.

Building new homes is a central theme of the budget.

“This is about building more homes, helping more Australians realise the dream of home ownership and giving younger Australians a leg up in the housing market,” the budget says.

But housing industry experts are wondering where the skilled and unskilled labour will come from to build those homes.

In WA, the Albanese-Cook governments have joined forced to create 34,000 new homes during the next eight years – 11,000 just for first home buyers.

And in Tuesday’s Federal Budget, another $2 billion has been set aside to build another 65,000 homes across the nation by providing councils and state utilities with money for infrastructure to unlock land for housing.

Housing Industry Association WA boss Michael McGowan says WA is already behind a Commonwealth target of 1.2 million new homes between 2024 and 2029.

“Under the Housing Accord target of 1.2 million homes nationally, WA should be aiming to complete 25,000 homes per year,” Mr McGowan said.

“Through the first two years WA has completed about 42,000 of the 50,000 home target.

“As an industry we need to continue to deliver and grow to meet the target.”

While welcoming money in the Federal Budget for important infrastructure to unlock undeveloped land – potentially providing new housing for thousands – Mr McGowan said WA still desperately needed skilled and unskilled labour.

“Federal funding of homes and infrastructure provides certainty to industry, certainty to invest in systems, build methodology and people to help grow their business,” Mr McGowan said.

“We now need more tradies, apprentices, and skilled workers from interstate and overseas to help turn these policy statements into new homes for Western Australians.”