Budget. Tax Change. No Housing Supply Change. 

On May 12 the Government released a budget that had more focus than any in recent years. The Treasurer says the reforms are aimed at affordability and intergenerational equity. Critics argue the changes may reduce investment appetite and slow housing supply over time. It’s a little hard to understand what problem the government is trying to solve and what impact they expect to have. 

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🕒 The 60-Second Snapshot

• The Federal Budget confirmed that negative gearing will be restricted to new builds from July 2027, while the current 50 percent CGT discount would be replaced with indexation under the proposed reforms. 
• Treasury modelling released alongside the Budget estimates the changes could result in 35,000 fewer homes being supplied over the next decade, despite the reforms aiming to improve affordability and ownership access. 
• AFR commentator Christopher Joye argued that the reforms risk discouraging investment and aspiration, describing Canberra as “a greedy python squeezing the Australian dream”. 
• ABS data shows investor lending volumes remain elevated into 2026, however over the March quarter numbers began to drop. It will be interesting to see if this trend continues

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What this means for landlords right now:

Three rate hikes, tax changes, and potentially less supply. There is some uncertainty in the market, but if you already own a property your position hasn't changed. If you're considering buying, the numbers may look different than they did six months ago. Either way, high rental demand isn't likely to be reduced in the short term.

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🏘️ Rental Market Data - National Vacancy Rates

Recent SQM Research data shows vacancy rates remain extremely low across most capital cities, particularly Perth, Adelaide and Darwin.

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Source: SQM Research, April 2026 Vacancy Rates release, 12 May 2026

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📋 Regulation & Compliance Watch

• NSW: Smart Rental Bonds launching mid-2026.The NSW government's portable bonds scheme is coming mid-2026, tenants will be able to transfer their bond directly to a new property without funding a second one upfront.
• VIC: Rent freeze bill introduced, not yet passed. The Greens' Residential Tenancies Amendment (Rent Controls) Bill 2026 was introduced on 1 April 2026, proposing an immediate rent freeze. It has not passed and existing rules still apply. Victorian landlords with rent reviews due can act within current rules.
• WA: Phase 2 rental reforms includes changes to replace without grounds terminations with a list of reasonable grounds for termination

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😄 The Property Punchline

Australian Government trying to solve cheaper housing, stronger supply, lower inequality and less speculation:

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