1. Why investors are moving toward new builds

2. What this could mean for buyers and the market

What the 2026 Budget Tax Changes Mean for Property Investors

The 2026 Federal Budget made some significant changes to how property investment is taxed in Australia, and most investors we speak with are still working out what it means for them. So we wrote it down.

New data reported by the Australian Financial Review, drawn from Oliver Hume's own research, shows the share of new-build sales going to investors in Victoria has risen above 40% for the first time since December 2024. Over the same period, first home buyer activity has cooled, dropping from 66.7%of sales in April to 54.9% in June.

Why investors are moving toward new builds

The shift follows changes to capital gains tax (CGT) and negative gearing settings. CGT is the tax paid when a property sells for more than it was bought for, with a 50 per cent discount potentially available if it's held for more than 12 months. Negative gearing is when rental income comes in lower than property costs, and that shortfall may be used to reduce taxable income.

Under the Budget changes, investors in new builds retain access to the existing CGT and negative gearing regime. Investors in established properties do not. That distinction appears to be steering investor demand toward new homes and away from existing stock, particularly on the outer city fringe.

Our Chief Economist Matt Bell, whose research underpins the reported data, expects this to represent a structural shift rather than a short-term reaction, with a proportion of investors filtering into the new home market over time. He noted that investor sales across Oliver Hume's national projects could rise by around 10 per cent, though as with any market forecast, there are no guarantees on timing or scale.

What this could mean for buyers and the market more broadly

For owner-occupiers, an increase in investor activity in new-build markets may mean more competition in areas where new supply is limited by approvals, water access, or infrastructure timing. Established property in middle-ring suburbs could also see reduced investor interest, which some economists suggest may put upward pressure on rents in those pockets over time.

At the same time, broader buyer conditions remain mixed. National home loan demand fell 14% in June, and auction clearance rates softened in the weeks following the Budget. Median house prices in Sydney, Melbourne and Canberra have all eased slightly through the same period. For investors weighing up new build versus established property under the new rules, the right approach depends on individual circumstances, timeframe, and goals.

There are no guarantees when it comes to future market performance, and this article is general in nature. It does not take into account your personal financial situation. For guidance specific to your circumstances, book a discovery call with the Oli Property team.

Read the full AFR report here.

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