Australian Budget Changes Investor Tax Rules for Property Purchases

The Australian government reduced tax advantages for new property investments in its latest budget. Investors will no longer receive negative gearing on most future purchases and will face an inflation-adjusted capital gains tax rate. The changes affect future acquisitions only. 3 million properties.

More than half of homes listed for auction in Sydney during budget week failed to sell, the weakest result since April 2020, according to preliminary Cotality data. Ray White reported open-home attendance fell by one-sixth nationwide. Auctions have recorded a national clearance rate below 60 percent for much of the past two months.

2 percent in the first three months of 2026 compared with the prior quarter, the Australian Bureau of Statistics reported.

Economists from NAB, Macquarie, Barrenjoey, HSBC and UBS expect house prices to fall in the short term. Cotality data indicates the median price in capital cities has already begun declining. Treasury forecasts that only a small number of investors will exit the market, pushing average rents up by less than $2 per week and allowing about 75,000 people, or 1 percent of Australian renters, to enter home ownership.

Treasurer Jim Chalmers said the reforms address under-taxation of property investment and aim to slow the pace of price growth relative to incomes.