The Federal Government has unveiled a sweeping housing reform package in the 2026-27 Budget to reverse the decline in Australian home ownership by targeting negative gearing and capital gains tax concessions.
The measures are projected to help an additional 75,000 Australians purchase homes over the next decade.
Under the reforms, negative gearing tax instruments will be overhauled and the capital gains tax discount will be wound back.
The Australian Housing and Urban Research Institute’s head of development Tom Alves said the controversial tax changes would significantly reduce market pressure from property investors.
“The removal of the capital gains tax discount and the changes to negative gearing mean that younger households will be competing less with investors to access the property market,” Mr Alves said.
He added that the changes are intended to make it “easier for [young people] to be able to purchase homes over coming years.”
In the Budget reply, Federal Opposition Leader Angus Taylor described the measures as “intergenerational fraud,” and committed to repealing the tax changes if elected.
Additional support to housing supply includes a $2 billion Local Infrastructure Fund to assist local and state governments in connecting essential services, such as water and roads, for up to 65,000 new homes.
The government maintains that these shifts will have a minimal impact on the rental market, estimating rent increases of less than two dollars a week for the median tenant.
A key component of the budget is a $60 million investment dedicated to community housing for young people aged 16 to 24 who are at risk of homelessness.
Mr Alves highlighted this item as a critical measure that has “slipped under the radar,” in post-budget commentary, noting it will help cover the gap between youth incomes and the cost of providing social housing.
The funding is estimated to provide access to social housing for 4,000 young people currently excluded from the system.
Additional housing measures include an extension of the ban on foreign investors buying existing homes until mid-2029 and continued support for over 1.4 million renters through Commonwealth Rent Assistance.
These reforms sit alongside broader cost-of-living relief, including fuel excise cuts and new tax offsets for 13 million workers.
