Federal Budget 2026–27: What It Means for Home Buyers, Investors and Mortgage Borrowers

The latest Federal Budget includes some major housing and tax changes that could affect first home buyers, property investors, homeowners and people looking to refinance.

The biggest housing announcements are aimed at making it easier for first home buyers to enter the market and encouraging more investment into new housing supply. The Government says its negative gearing and capital gains tax changes are estimated to support an additional 75,000 homeowners over the decade. (Australian Government Budget)

For the average borrower, the message is simple:

The Budget may change how investors buy property, but home buyers still need to focus on borrowing power, deposit size, interest rates and loan structure.

1. First home buyers may get more support

The Budget continues the Government’s focus on helping more Australians buy their first home.

The Government says it is supporting first home buyers through housing supply measures, the expanded 5% Deposit Scheme, and Help to Buy. (Australian Government Budget)

In simple terms, these programs are designed to help eligible buyers get into the market sooner, especially where saving a large deposit is the biggest problem.

What this could mean for first home buyers

Area	What it may mean
Deposit	Some buyers may need a smaller deposit to buy.
Borrowing power	Buyers still need to prove they can afford the loan.
Property choice	New homes may become more attractive because of tax and supply changes.
Competition	First home buyers may still face competition, especially in popular suburbs.
Timing	Buyers should check eligibility early before making offers.

The important point is this:

A government scheme can help with access, but it does not replace good loan approval, savings history and serviceability.

2. Negative gearing changes may affect property investors

The Budget proposes big changes to negative gearing for residential property investors.

From 1 July 2027, the Government plans to limit negative gearing for residential investment properties to new builds. (Australian Government Budget)

That means investors buying established homes may not get the same tax benefit in the future, while investors buying new properties may still be treated more favourably.

What is negative gearing?

Negative gearing is when the costs of owning an investment property, such as interest and expenses, are higher than the rental income.

At the moment, many investors can use that loss to reduce taxable income.

The proposed change means the tax benefit would be more focused on new housing, rather than existing properties.

What this could mean

Buyer type	Possible impact
First home buyers	Less investor competition for some established homes over time.
Investors	More reason to consider new builds.
Developers	Potentially more demand for new housing.
Existing investors	Need to check whether grandfathering or transition rules apply.
Borrowers	Banks may change how they assess investment-loan borrowing power.

Some lenders are already reportedly adjusting how they assess negative gearing benefits for new investor applications after the Budget announcement. (News.com.au)

3. Capital gains tax changes may affect investors

The Budget also proposes changes to capital gains tax.

From 1 July 2027, the Government plans to replace the current 50% CGT discount for individuals, trusts and partnerships with cost-base indexation and a 30% minimum tax rate on capital gains. (Australian Government Budget)

That sounds complicated, so here is the simple version:

Some property investors may pay more tax when they sell, depending on their income, ownership structure and how long they hold the property.

This does not mean every investor will be worse off. But it does mean investors should speak with an accountant before buying, selling or restructuring.

4. New homes may become more attractive

A major goal of the Budget is to encourage more housing supply.

The Government is investing $2 billion into housing-enabling infrastructure through a new Local Infrastructure Fund. This is designed to help fund things like roads, water, power and sewerage so more housing projects can proceed. (Prime Minister of Australia)

For borrowers, this could mean more focus on:

house and land packages
new apartments
townhouse developments
growth corridors
first home buyer estates
newly built investment properties

New homes may become more attractive because the Budget changes are designed to push more investment toward new supply.

5. Homeowners should still review their mortgage

Even if you are not buying or investing, the Budget is a good reminder to review your home loan.

Many borrowers are still paying more than they need to because they have not reviewed their rate, loan structure or repayment options.

Things to check

Question	Why it matters
Is your rate still competitive?	Lenders often offer sharper rates to new customers.
Are you on the right loan type?	Fixed, variable and split loans suit different borrowers.
Are you using your offset account properly?	Offset accounts can reduce interest without locking away cash.
Has your income changed?	You may be able to refinance or restructure.
Has your property value increased?	A lower LVR may help you access better rates.
Are you planning to invest?	Budget tax changes may affect your strategy.

A home loan review can be useful even if you do not plan to move lenders.

6. Property investors should get advice before buying

The Budget makes investment-property strategy more important.

Investors should think about:

whether to buy new or established
expected rent
cash flow
tax treatment
loan structure
interest-only versus principal and interest
ownership structure
long-term selling plans
borrowing capacity after lender policy changes

The wrong loan structure can cost money over time.

The wrong tax assumption can be even more expensive.

That is why investors should speak with both a mortgage broker and an accountant before making a decision.

7. What this means for borrowers in plain English

Borrower type	Simple takeaway
First home buyer	Check if you qualify for deposit support or first home buyer schemes.
Upgrader	Your borrowing power and deposit still matter more than Budget headlines.
Homeowner	Review your current loan and rate.
Investor	Tax rules may change, especially for established properties. Get advice.
New-build buyer	New homes may become more attractive under the proposed rules.
Refinancer	Lenders may change assessment rules, so compare options early.

8. What should borrowers do now?

Here is a simple checklist.

If you are a first home buyer

Check your borrowing power.
Find out what deposit you need.
Ask whether you qualify for government schemes.
Compare new and established property options.
Get pre-approval before making offers.

If you already own a home

Review your interest rate.
Check your loan structure.
Compare offset, redraw and fixed-rate options.
See whether refinancing could save money.

If you are a property investor

Speak with your accountant about the Budget changes.
Compare new-build and established-property strategies.
Check how negative gearing changes may affect cash flow.
Review your investment loan structure.
Do not assume your old borrowing strategy still works.

Final thoughts

The Federal Budget could change the property market over time, especially for investors.

First home buyers may benefit from policies aimed at improving access and increasing housing supply. Investors may need to think more carefully about tax, cash flow and whether they buy new or established property. Homeowners should use this moment to review their loan and make sure they are not paying more than they need to.

The most important point is this:

Budget changes matter, but your personal numbers matter more.

Your deposit, income, expenses, credit history, property type and loan structure will still decide what you can borrow.

Need help with your home loan?

Whether you are buying your first home, refinancing, upgrading or investing, a mortgage broker can help you compare lenders and understand your options.

Speak with a home loan broker today to review your borrowing power, loan structure and next steps.

Visit our website to explore your options: