The Federal Government’s sweeping property tax changes will reshape investor behaviour and reinforce the family home as one of the most valuable long-term assets in Australia, according to Place Estate Agents Chief Executive Officer Damian Hackett.
Under the changes announced in the 2026 Federal Budget, investors purchasing established residential property after 1 July 2027 will no longer be able to deduct rental losses against their wage income, while qualifying new residential builds will retain negative gearing concessions.
The Federal Government also announced changes to Capital Gains Tax, while the principal place of residence will remain exempt.
“The Budget isn’t removing demand from property, it’s changing where people choose to invest and how they build long-term wealth,” Mr Hackett said.
“For some, that will mean upgrading the family home, while for others it will mean shifting focus toward new houses and new apartments that still qualify for negative gearing concessions under the new framework.”
Mr Hackett said existing landlords would remain protected under the announced grandfathering provisions.
“If you’re a current landlord, your negative gearing remains protected. The reforms are aimed at redirecting future investor demand rather than penalising existing landlords,” he said.
Mr Hackett said the changes would create a gradual shift across different segments of the market rather than trigger widespread price falls.
“We will see less investor competition for some established homes over time, particularly at the entry level, creating more opportunity for first-home buyers,” he said.
“At the same time, investor demand will increasingly move toward new houses and new apartments where negative gearing concessions remain available.”
Mr Hackett said Brisbane and South East Queensland were positioned strongly under the changes due to population growth, interstate migration, infrastructure investment and ongoing housing undersupply.
“Brisbane continues to have some of the strongest long-term fundamentals in the country and is one of the best-positioned markets nationally under these changes,” he said.
“Treasury modelling points to slower price growth rather than a significant market correction, with Brisbane’s property market continuing to be underpinned by strong demand and limited supply.”
Mr Hackett said the reforms would create one of the strongest development environments in years.
“Developers delivering new apartments, townhouses and houses will benefit from increased investor demand as negative gearing incentives remain tied to qualifying new residential builds,” he said.
“At the same time, the principal place of residence remains exempt from Capital Gains Tax, reinforcing the long-term value of the family home and encouraging more families to view upgrading their home as a long-term investment strategy.”
“Not all investors negatively gear properties anyway, with some focused on positive cash flow rather than tax benefits alone.”
Having spent decades in the property industry across changing economic cycles and policy reforms, Mr Hackett said Brisbane’s property market had historically proven resilient and adaptable.
“Property markets evolve constantly,” he said.
“Experienced buyers, investors and developers will continue looking for opportunity, and Brisbane remains one of the strongest long-term growth stories in the country.”
Key Points:
- Brisbane families will increasingly focus on upgrading their family home under the new tax framework
- The principal place of residence remains one of Australia’s most tax-effective long-term assets
- Existing landlords remain protected under grandfathering provisions
- All capital gains accrued prior to 1 July 2027 will still receive the existing 50 per cent Capital Gains Tax discount under the grandfathering provisions
- Changes to Capital Gains Tax are expected to encourage more investors to hold assets long term
- Investor demand will increasingly shift toward new apartments and new houses where negative gearing concessions remain
- The reforms will provide a major boost for developers, with investors targeting new apartments, townhouses and houses
- Less investor competition will create more opportunities for some first-home buyers purchasing established homes
- Prestige property markets are expected to be less impacted, with high-end buyers typically driven more by lifestyle and long-term wealth creation
- Brisbane’s upgrader market will strengthen under the new framework
- Tight rental conditions will continue placing pressure on Brisbane’s rental market
- Brisbane and South East Queensland remain among the best-positioned markets nationally due to population growth, infrastructure investment and ongoing housing undersupply
- The changes are not expected to dramatically reduce property prices
- Brisbane’s long-term growth story remains strong despite the tax changes