What the Federal Budget means for homebuyers

It’s Federal Budget time, so let’s cut to the chase. What’s in it for aspiring homeowners looking to purchase a property in 2025?

Here are some of the key takeaways that could affect you.

Purchasing property


Help to Buy scheme

Labor plans to boost its Help to Buy scheme by increasing income and property price caps.

Under the scheme, the Federal Government will provide an equity contribution of up to 40 per cent to support eligible homebuyers (around 40,000 Australians) to purchase a home with a lower deposit and a smaller mortgage.

Around $800 million will be allocated to lift the property price caps and income caps from $90,000 to $100,000 for individuals, and from $120,000 to $160,000 for joint applicants and single parents.


Infrastructure investment

The 2025–26 Federal Budget has allocated $17.1 billion to various road and rail infrastructure projects across the country. It’s a good idea to be across these if you’re planning to buy, as they may affect housing development and surrounding property markets.

Examples include:

  • $7.2 billion for safety upgrades on the Bruce Highway in Queensland.
  • Over $2.3 billion for critical infrastructure upgrades in the growing Western Sydney region.
  • A further $465 million for New South Wales to plan for regional projects and fix notorious choke points, including $250 million to upgrade Mona Vale Road and $115 million to reduce travel times on Terrigal Drive.
  • $2 billion to upgrade Sunshine Station in Victoria.
  • $350 million for the Westport – Kwinana Freeway Upgrades in Western Australia.

Read the full list here.


Foreign investors banned

The Government announced a temporary ban on foreign purchases of established dwellings for at least two years and said it would crack down on land banking.

From 1 April 2025 to 31 March 2027, foreign persons, including temporary residents and foreign-owned companies, cannot buy an established dwelling in Australia unless an exception applies.

The measure is intended to open up more opportunities for local property purchasers.


Prefabricated homes a priority

Labor will allocate $54 million towards the prefabricated and modular housing industry to boost home building.

Prefabricated homes are manufactured offsite in a factory, then transported to their final location for assembly. They’re said to take half the time to build as traditional brick and mortar homes.

The Government has also committed $120 million from the National Productivity Fund to incentivise states and territories to remove red tape preventing the uptake of modern methods of construction.


Incentives for housing construction tradespeople

Labor will introduce a new Housing Construction Apprenticeship stream, offering eligible apprentices in housing construction trades up to $10,000 in financial incentives. This measure is designed to address workforce shortages and boost housing supply.


Cost of living


New tax cuts and Medicare breaks

From 1 July 2026, the 16 per cent tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15 per cent. From 1 July 2027, it will be reduced to 14 per cent.

A worker on average earnings will get an extra $268 in their pocket in the first year, and $536 from the 2027–28 financial year.

The Government will also increase the Medicare levy low-income thresholds. As a result, more than one million Australians on lower incomes will be exempt from paying the Medicare levy or continue to pay a reduced levy rate.


More energy bill relief

The Government will extend energy bill relief to the end of 2025. Every household and around one million small businesses will receive two $75 rebates directly off their electricity bills through to 31 December 2025. 


Health

The Government plans to reduce the maximum cost of medicines on the Pharmaceutical Benefits Scheme (PBS) for everyone with a Medicare card and no concession card. From 1 January 2026, the maximum co‑payment will be lowered from $31.60 to $25 per script.


Cutting student debt

The Government will reduce all outstanding Higher Education Loan Program (HELP) and other student debts by 20 per cent, subject to the passage of legislation.

The Government will also increase the amount that people can earn before they have to start paying back their loans ($54,435 in 2024–25 to $67,000 in 2025–26).


Growing wages

The Government intends to ban noncompete clauses for low and middle income employees. This is expected to boost wages, with workers free to move to higher paying jobs. Aged care and childcare workers are set to receive wage increases.


Looking to buy a property?

There’s a lot to digest from the Federal Budget, but we’re here to answer your questions.



Get in touch if you need clarification about how any of the Federal Budget measures impact your property purchasing goals.

Are investors changing course after the new negative gearing reforms?

August 20, 2026
The Federal Government’s negative gearing and Capital Gains Tax (CGT) reforms represents a significant shift in how future property investments will be treated for tax purposes. For investors considering their next purchase, the changes may influence everything from the type of property they buy to how they assess cash flow and long-term returns. Legislated, many investors are reassessing their property purchasing plans and strategies. The core reforms have now passed Parliament, although some of the more detailed implementation rules are still being finalised ahead of their commencement. If you’re looking to buy an investment property down the track, here’s what you need to know about the reforms and how they change the playing field. What is changing? On 12 May, Treasurer Jim Chalmers handed down the Federal Budget , which included major changes to negative gearing and CGT rules. From 1 July 2027: Negative gearing for residential property investments will be limited to new builds. The 50 per cent CGT discount will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains. Properties held before the announcement (7:30pm AEST 12 May 2026) will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains accruing after 1 July 2027. How have the reforms affected the market and investors? When the changes were announced, Australia’s property market had already been cooling, driven by a combination of cash rate hikes, housing affordability constraints, the Middle East conflict, and cost-of-living pressures. But the Federal Budget reforms dampened the market even further, with auction clearance rates slipping to levels worse than during the pandemic, and investor confidence dropping. One survey of more than 1,400 Australian investors found that more than 80% believed residential investment property had become less attractive following the 2026 Federal Budget changes. At the same time, 51.5% said they planned to hold their existing investments and wait to see how the proposed legislation evolves. Overall, the survey offers a useful snapshot of investor sentiment, although it should not be taken as representative of every Australian property investor. Key shifts in strategy Since the announcement, there have been early signs that some investors are reconsidering where and how they invest, although it is too soon to say how the reforms will reshape the broader property market over the long term. New builds could attract more attention With negative gearing limited to new builds from 1 July 2027, there are signs that some investors are pivoting towards newly constructed properties. Data from property fund manager Oliver Hume shows the proportion of new-build sales to investors in Victoria has risen above 40 per cent for the first time since December 2024, for example. Experts say investors will likely switch to new units or houses on the outer city fringes, while suburbs in the middle of cities could experience a decrease in stock, potentially resulting in higher rents . Holding or grandfathering existing assets Investors with established properties purchased before 12 May 2026 may choose to retain those properties, as they are exempt from the negative gearing reforms and can continue to access the existing tax treatment that applies to grandfathered properties. These investors can keep negative gearing the property against their wage income and retain the full benefits until they sell. Cash flow could become an even bigger consideration Historically, negative gearing enabled investors to offset losses on established investment properties against their taxable income. But under the changes , investors purchasing established properties would no longer receive immediate tax relief on those losses. The changes may prompt some investors to focus more heavily on rental yield , cash flow and long-term returns when assessing investment opportunities. As a result, positively geared properties could become more attractive relative to investments that rely heavily on tax concessions to support returns. Some may also look for properties with the potential to transition to positive gearing over time as rental income grows. What about the changes to SMSF borrowing? In addition to the CGT and negative gearing reforms, there are new rules around self-managed super fund (SMSF) borrowing. From 10 August 2026, SMSFs can no longer use Limited Recourse Borrowing Arrangements (LRBAs) to buy residential property. Current LRBAs are grandfathered. SMSFs can still purchase residential property outright using cash , and LRBAs can be used to acquire business real property. The changes have been met with mixed reviews among investors, and some critics questioning whether it would make it harder for Australians to build retirement wealth . Some experts also believe that the changes could increase the appeal of commercial property among SMSF investors, although SMSF property investment can involve complex lending, tax and superannuation requirements, so specialist financial, legal and tax advice is particularly important. Considering an investment property purchase? The changes in the budget mean investors may need to think differently about the type of property they purchase, its cash flow and how the investment fits within their broader financial plans. While we can’t provide tax or financial advice, we can help you understand the lending side of the equation. We can review your borrowing capacity, compare suitable loan options and help you understand how different property and loan scenarios could affect your repayments and overall finance structure. If you’re considering your next investment property, get in touch! We can help you explore your finance options so you can make your next move with a clearer understanding.

What’s driving the drop in auction clearance rates?

July 20, 2026
After years of fierce competition, fast-rising prices and crowded auction weekends, the market is beginning to show signs of a shift. More properties are being listed for sale, homes are taking longer to sell, and buyers are becoming increasingly selective about what they’re willing to pay.