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14 May, 2026 / Category: Blog
May’s Federal Budget landed with property squarely in its sights. Framed by the government as a correction of ‘intergenerational unfairness’, the headline changes to capital gains tax and negative gearing will reshape the investment landscape in ways that will take time to fully play out.
We’ll leave the technical detail to the media. What we want to explore is what this means for Melbourne.
The most immediate impact will be felt in the investment market. With reduced tax advantages on resale, investment properties become a less attractive proposition, particularly for those buying with an exit in mind. That could take some heat out of prices of investment grade product, though it’s worth noting the market isn’t running especially hot right now.
The more likely near-term consequence is upward pressure on rents. Investors who can no longer rely on the same returns at sale will look to maximise yield and tenants will feel that.
Negative gearing will remain available on new properties. Our view, shaped by two decades in this market, is that new assets have historically underperformed against established properties over time. We’ll be modelling the numbers ourselves, but we’d encourage anyone drawn to new builds purely for the tax position to look carefully at the long-term performance data.
Principal places of residence remain fully exempt and become an even more compelling place to build wealth. We expect to see more owners channelling funds into renovations rather than transacting, which could push prices up in the upgrader segment while reducing stamp duty revenue for the state as overall transaction volumes soften.
The important thing to remember is that markets adjust to change. And this budget finally delivers clarity, rather than the rumour and worry we’ve had for weeks.
If you’re unsure what these changes mean for your position, the worst thing you can do is make a hasty decision. Come and have a conversation with us, as there are ways to make this environment work in your favour, and we’re here to help you find them.
As property advocates and property managers we love what we do. Searching, negotiating and securing the perfect property for our clients, sooner and on better terms.
