Australian Federal Budget 2026-27 Herron Todd White Analysis

The 2026–27 Australian Federal Budget outlines a series of housing, taxation and supply-side measures aimed at responding to ongoing housing affordability pressures, constrained construction activity and broader economic conditions characterised by moderating growth, elevated building costs and subdued household consumption.

From a property sector perspective, four key initiatives stand out.

First, changes to property investment taxation settings, including reforms to negative gearing and capital gains tax treatment, are designed to adjust relative investment incentives between established housing and newly constructed dwellings, with the effect of encouraging greater investment in new supply over time.

Second, a housing infrastructure package of approximately $2 billion is allocated to enabling works such as transport, utilities and servicing infrastructure, with the objective of unlocking additional residential development capacity over time.

Third, the Budget includes measures aimed at improving planning system efficiency, including funding support to streamline approvals and reduce delays in housing delivery, with the goal of improving development throughput and reducing non-market barriers to supply.

Fourth, continued support is directed toward build-to-rent and institutional housing investment as part of a broader strategy to expand rental supply and diversify housing delivery models.

These measures sit within a broader environment of persistent affordability constraints, high construction costs, labour shortages and tighter financial conditions. While the policy settings are predominantly supply-oriented, the impact on housing delivery is expected to be gradual, reflecting structural constraints across the development and construction pipeline.