A changing landscape for property and lending
The 2026 Federal Budget, announced on 12 May 2026, marks one of the most significant shifts in property and lending policy in recent years. At its core, mainly through tax reform, the Budget is focused on improving housing affordability and reshaping how Australians approach property ownership and investment. But for clients, there is more to unpack. At The Brokerage, we believe the policy changes place a great emphasise on structure and strategy moving forward.
The key policy changes impacting property:
- Investor incentives are shifting
The most notable change is the reform of negative gearing and capital gains tax (CGT).
From 1 July 2027:
- Negative gearing will be restricted primarily to new builds and existing assets held prior to 12/05/2026
- Extension of the ban on foreign investors buying existing homes
- The 50% CGT discount will be replaced with an indexation-based model with a minimum 30% CGT tax payable. Investors in new builds will have the option of choosing the indexation arrangement or the old 50% CGT discount
In theory, these changes are designed to reduce investor demand for existing property and encourage investment in new housing supply.
What this means:
Investor strategies will need to shift particularly for those focused on established residential property.
- More support for owner-occupiers
The Government has indicated these reforms are expected to support more Australians entering the housing market, with the Treasurer saying these changes “should help an extra 75,000 first home buyers enter the property market over the next decade.” Alongside this, the Government introduced cost-of-living measures relief for working Australians through a $250 offset, with an aim to support households managing repayments.
What this means:
The balance of the property market may gradually see a tilt back toward first home buyers and owner-occupiers in the long term.
- A long-term push to increase supply
The Budget also included $2.1bn investment in housing infrastructure and planning reforms, aimed at unlocking new housing supply. Funding is expected to support the delivery of up to 65,000 new homes across Australia over time.
What this means:
This is a long-term play. Any meaningful increase in housing supply will take time, but it will influence development opportunities and lending demand.
- Continued support for businesses and commercial borrowers
For business owners and commercial clients, the Budget includes:
- Ongoing tax incentives such as the $20,000 instant asset write-off for businesses with turnover up to $10 million a year
- Broader investment and productivity measures aimed at supporting business growth
What this means:
There are still opportunities to invest, expand, and structure lending efficiently but cost pressures and interest rates remain a key factor.
Residential clients
Whether you are a first home buyer, upgrading, or investing, this environment requires a more strategic approach:
- First home buyers may benefit from reduced investor competition over time
- Investors will need to reassess structure, tax outcomes, and property type
- Existing borrowers should review whether their current lending still aligns with their long-term goals
Commercial and business clients
For our commercial clients, we expect:
- Continued demand for refinance and restructuring solutions
- Greater focus on cash flow and capital efficiency
- Ongoing opportunities in development, asset finance and business investment
The bigger picture: strategy over rates
One of the most important takeaways from this Budget is that lending decisions are no longer just about interest rates, they’re about structure, timing, and long-term strategy. At The Brokerage, our role is to help our clients make informed, intelligent decisions that maximise their outcomes while minimising risk. That means understanding not just what has changed, but how those changes apply to your individual position.
For many clients, this Budget will raise more questions than answers particularly around how to approach property investing moving forward. What we’re focusing on at The Brokerage is helping clients understand their options early, so they can move with confidence, rather than react later once the market shifts. At The Brokerage, we believe the policy changes place a great emphasise on importance of structure and strategy moving forward.
What should you do next?
If you are considering:
- Buying your first or next home
- Reviewing your investment strategy
- Refinancing or restructuring existing lending
- Exploring commercial or business finance
Now is the right time to review your position. At The Brokerage, we provide tailored lending solutions across residential and commercial finance, designed to align with your goals and evolving market conditions.
Speak with our team
Our team of experienced brokers is here to guide you through every step of your finance journey with clarity, structure, and a strategy that works for you.
Contact us today or speak with your broker to understand what these changes mean for your situation.