Federal Budget 2026: Why New Apartments Could Become the Future of Property Investing

Australia’s 2026 Federal Budget has sparked one of the biggest conversations around property investing in years.

With proposed reforms to negative gearing and capital gains tax (CGT), the way Australians invest in property may be about to change. And while many headlines have focused on what investors could lose, there is another side to the story: new apartments and off-the-plan developments may become increasingly attractive if the proposed policies are implemented.

For buyers considering an apartment with Finbar, the changes could create new opportunities in the years ahead.

What’s Actually Changing?

The proposed reforms introduce two major shifts:

• established properties purchased after July 2027 will no longer be able to negatively gear; and

• the existing 50% CGT discount would be replaced with an indexation-based model and minimum tax rate from July 2027.

However, one category largely retains existing benefits: newly built residential property.

Under the proposed framework, new builds continue to retain:

• full access to negative gearing;

• and access to more favourable CGT outcomes compared to established properties.

The Investment Focus May Shift Towards New Apartments

For decades, established homes dominated investor demand because tax settings treated most residential investments similarly.

The new reforms could change that.

If investors can no longer access the same tax advantages on established homes, demand may begin to favour:

• off-the-plan apartments;

• newly completed developments;

• and newly completed homes.

Why Off-the-Plan Apartments Could Benefit

Off-the-plan apartments already offer several advantages for investors:

• Ability to apply for Government off-the-plan stamp duty concessions;

• modern finishes and lower maintenance costs;

• strong depreciation benefits;

• energy efficiency;

• and appeal to renters seeking lifestyle-focused living.

If implemented, the proposed tax changes may benefit investors by offering them:

• the ability to choose between the current 50% Capital Gains Tax discount, or use the new inflation indexation method proposed in the 2026 Federal Budget;

• and the ability to access negative gearing that will no longer be accessible for established housing

These additions could reshape where investors put their money in the future.

Perth’s Apartment Market Is Already Supported by Strong Fundamentals

The broader Perth market also continues to benefit from:

• a tight rental market;

• strong population growth;

• housing undersupply;

• and relative affordability in some market segments compared with larger eastern states markets.

At the same time, apartment living is becoming increasingly attractive to:

• downsizers;

• young professionals;

• interstate migrants;

• and renters seeking proximity to lifestyle and employment precincts.
  

This combination of limited supply and strong demand continues to support the long-term outlook for quality new apartments.

The Future of Property Investing May Look Different

The 2026 Federal Budget may ultimately represent more than a tax change; it may signal a broader transformation in how Australia approaches property investment.

Australia’s property market has historically rewarded ownership of existing housing stock. The next phase may increasingly reward investment that creates additional housing supply.

That is a very different investment environment.

In this emerging landscape, off-the-plan purchasing could become increasingly attractive to investors.

For investors considering their next move, understanding where policy, supply, and demand are heading could become more important than ever.

Disclaimer: This article is provided for general information only and comments on publicly announced government policy settings as at the date of publication. The proposed reforms remain subject to legislative process and may change. The potential implications for housing demand, investor behaviour and new apartment supply are uncertain and may be affected by a range of factors, including interest rates, lending conditions, construction costs, taxation settings, foreign investment rules, buyer confidence and broader economic conditions. This article does not constitute financial product advice, taxation advice, legal advice or a recommendation to buy, hold or sell Finbar securities or any property. Investors and purchasers should obtain their own independent professional advice.