Australia Budget 2026 Property & Trust Changes
The Albanese government has unveiled a sweeping overhaul of Australia’s property‑related tax settings in the 2026 Budget, breaking its earlier commitment not to touch negative gearing or capital gains tax. Under the new framework, negative gearing will be limited to newly built homes, ending the long‑standing ability for investors to offset losses on established properties against their wage income. Treasury modelling suggests this shift will gradually push more investor‑owned homes into the hands of first‑home buyers, though it also predicts a reduction in new housing construction as investor demand cools. The government argues the changes are necessary to rebalance a system that has increasingly favoured investors over aspiring owner‑occupiers.
Capital gains tax rules will also be restructured from mid‑2027, replacing the current 50% discount with a model that taxes only gains above inflation, paired with a new minimum 30% tax rate to prevent high‑income earners from strategically minimising their tax burden. Pensioners and income‑support recipients will be exempt from the floor rate, and existing assets will be grandfathered so that gains accrued before the transition remain under the old system. The budget also introduces a 30% minimum tax on discretionary trusts from 2028, a move the government says will close a loophole used disproportionately by wealthier households. While critics warn the reforms could worsen rental pressures and deter investment, the government maintains that its broader housing package — including infrastructure funding and restrictions on foreign buyers — will offset supply impacts and deliver a fairer, more sustainable housing market.
