The Federal Budget 2026

Following the Federal Budget announcement delivered on 12 May 2026, there has been significant discussion surrounding housing affordability, investment property taxation and future housing supply across Australia.

Several proposed changes have attracted particular attention across the property market, particularly surrounding capital gains tax, negative gearing and future housing construction incentives. While legislation and implementation details continue evolving, the proposed changes are already influencing conversations surrounding future property decisions.

Importantly though, broad national commentary does not always reflect what we continue seeing throughout the 4017 bayside suburbs. Across Sandgate, Shorncliffe, Brighton, Bracken Ridge and Deagon, property decisions often continue being shaped as much by lifestyle, long term ownership, community connection and limited housing turnover as broader economic conditions.

Change 1 | Capital Gains Tax

Under the proposed changes, the current 50% capital gains tax discount for assets held longer than 12 months would be replaced by an inflation indexed system from 1 July 2027. In simple terms, future gains would first be adjusted against inflation before tax is applied. The proposed changes appear designed to encourage longer term ownership and new residential construction over shorter-term speculative investment activity.

For longer term property owners, inflation indexing may reduce the taxable portion of gains accumulated over longer holding periods depending on inflation and market conditions. Shorter term investors may experience a reduced taxation advantage compared with the current system.

Importantly, many existing investment properties purchased prior to the proposed implementation dates are expected to retain their current taxation treatment under grandfathering provisions, meaning the current rules would continue applying to existing owners.

Change 2 | Negative Gearing

Another widely discussed proposal involves future limitations surrounding negative gearing for newly purchased investment properties.

Under the proposed changes, negative gearing deductions against wage and salary income for newly purchased residential investment properties would become limited to new builds from 1 July 2027. This means future investors purchasing established residential investment properties may no longer receive the same taxation deductions currently available under existing arrangements.

Importantly, properties purchased prior to the proposed implementation dates are expected to retain their current taxation treatment under grandfathering provisions. The proposed changes appear designed to encourage investment into new residential construction and future housing supply.

Change 3 | Foreign Resident CGT Rules

The Federal Budget also proposed broader foreign resident capital gains tax reporting and compliance changes surrounding certain property interests and ownership structures.

The proposed changes include expanded reporting obligations and changes to how certain assets and ownership interests are assessed for capital gains tax purposes. Under the proposals, some foreign residents disposing of high value property interests may also face additional notification requirements prior to transactions being completed.

These proposed changes are primarily directed toward larger scale foreign ownership structures and compliance oversight rather than most local owner occupiers throughout 4017.

Change 4 | Discretionary Trusts

The Budget additionally outlined proposed future taxation changes surrounding discretionary trusts from 1 July 2028. Under the proposed changes, a minimum 30% tax rate may apply to some discretionary trust structures, potentially reducing some of the flexibility historically associated with trust-based investment arrangements.

While exemptions may apply in certain circumstances, the proposed changes are likely to prompt many investors and property owners using trust structures to seek further accounting and taxation advice as additional detail continues unfolding.

Property Conversations Across 4017

Homeowners & Sellers

For sellers and long-term homeowners, much of the current conversation is centred around timing, future planning and how evolving market conditions may influence broader buyer activity moving forward. Throughout Sandgate, Shorncliffe, Brighton, Bracken Ridge and Deagon, lifestyle, location and long-term security are likely to remain the primary drivers of decision making.

After several years of accelerated growth across Brisbane, buyers are also becoming increasingly measured in their decision making, often taking longer to assess value and compare opportunities before committing.

First Home Buyers & New Construction

For first home buyers, the proposed changes may reduce investor competition across some established property segments over time should investor demand soften.

For those considering building or purchasing newly constructed property, the proposed changes may increase future focus on new residential construction as incentives continue shifting toward additional housing supply.

Across parts of Brighton, Deagon and Bracken Ridge in particular, ongoing conversations continue reflecting interest surrounding renovation, rebuilding and longer-term family planning as housing needs evolve over time.

Investors & Renters

For investors, future housing supply, rental demand and evolving taxation policy are likely to remain key considerations as legislation and implementation details continue unfolding.

While broader Brisbane commentary has increasingly focused on slowing market momentum, current conditions across much of 4017 appear more reflective of a market returning to more sustainable settings rather than experiencing a significant downturn.

Limited housing turnover, ongoing renovation and rebuild activity, and continued lifestyle demand throughout the bayside continue supporting activity across many parts of Sandgate, Shorncliffe, Brighton, Deagon and Bracken Ridge.

For renters, much of the broader conversation continues focusing on future housing supply, rental availability and how evolving investment conditions may influence the rental market over time.

Across 4017, demand surrounding quality rental properties has remained relatively consistent amid limited available stock, with renters often becoming increasingly prepared and decisive when suitable homes become available.

Local Market Context

While broader policy conversations continue nationally, much of the day-to-day activity across Sandgate, Shorncliffe, Brighton, Bracken Ridge and Deagon continues reflecting a market shaped by long term ownership, limited housing turnover and ongoing lifestyle driven demand.

Buyers are generally becoming more measured in their decision making, often taking longer to assess value and compare opportunities before committing. At the same time, tightly held housing supply, ongoing renovation and rebuild activity, and continued community connection throughout the bayside continue supporting local buyer and renter demand across 4017.

As always, every property decision depends on individual circumstances, financial position, timing and long term goals.

If you would like to discuss the current market, your property plans or what these broader conversations may mean across 4017, Aarthi and Brock are always happy to assist.

Official Federal Budget Information

For those wanting to review the official Federal Budget tax reform overview directly, additional information is available via the Australian Government website.

Disclaimer: This article is intended as general market commentary only and should not be considered financial, taxation or legal advice. The proposed Federal Budget changes remain subject to legislation and implementation detail. Independent professional advice should always be sought regarding your personal circumstances.