Treasurer Jim Chalmers will hand down his fifth federal budget on 12 May 2026. With housing affordability at the top of the political agenda following Labor's 2025 election win, this budget is shaping up to include significant measures for homebuyers, renters and property investors. Here's what to watch for and how it could affect you.
Key Dates
- Budget night: Tuesday, 12 May 2026
- RBA rate decision: Monday, 5 May 2026
- CPI data released: Wednesday, 29 April 2026
Note: The measures below are expected or proposed as of 29 April 2026. Final announcements will be confirmed on budget night.
1. Help to Buy Expansion
Labor's flagship shared equity scheme — Help to Buy — is set to receive a significant boost. The government is expected to commit around $800 million to lift both the property price caps and income caps, making the scheme accessible to more Australians.
Under Help to Buy, the government co-purchases up to 40% of your home, which means you need a smaller deposit and a smaller mortgage. You own the property and buy back the government's equity share over time — noting the government shares in any capital growth.
Help to Buy — How It Works
| Without Help to Buy | With Help to Buy (40%) | |
|---|---|---|
| Property price | $700,000 | $700,000 |
| Government equity | — | $280,000 |
| Your loan needed | $665,000 (5% deposit) | $399,000 |
| Monthly saving | — | ~$1,500/month |
Estimated repayment savings based on 6.5% interest rate over 30 years. With Help to Buy figures are illustrative; a minimum 2% buyer deposit of the purchase price applies and actual loan amount will vary.
The expanded caps are expected to make Help to Buy viable in higher-priced cities like Sydney and Melbourne, where current limits exclude many buyers. Watch for income cap increases as well — currently singles earning below $100,000 and couples below $160,000 are eligible.
2. Capital Gains Tax Discount — The Big Unknown
The most closely watched budget measure for property investors is whether the government will reduce the 50% capital gains tax (CGT) discount on investment properties.
A Senate committee inquiry in March 2026 recommended cutting the discount, arguing it distorts the housing market in favour of investors at the expense of would-be owner-occupiers. Treasurer Chalmers has left the door open to changes but has not confirmed a decision as of late April.
What's Being Proposed
- Reducing the CGT discount from 50% to 25–33% for residential investment properties
- Shares and other assets likely to retain the current 50% discount
- Grandfathering for existing investment properties (current owners keep the 50% rate)
- New builds may be exempt to protect housing supply incentives
If the discount is reduced, it would increase the tax payable when you sell an investment property purchased after the budget date. For a long-term investor, this could mean tens of thousands of dollars in additional tax.
CGT Discount Change: What It Means in Dollars
| Capital Gain | Tax (50% discount, 37% bracket) | Tax (25% discount, 37% bracket) |
|---|---|---|
| $200,000 | $37,000 | $55,500 |
| $400,000 | $74,000 | $111,000 |
| $600,000 | $111,000 | $166,500 |
If you're an existing investor, grandfathering provisions are expected to protect you. If you're considering buying an investment property after budget night, the maths changes — though whether this makes property a worse investment depends on your long-term strategy.
3. First Home Buyer Measures Already In Place
Two major first home buyer policies were implemented from 1 October 2025 and are already running — you don't need to wait for the budget to take advantage of these:
Already Available From 1 October 2025
- 5% deposit for all first home buyers — The First Home Guarantee now has no cap on places and no income limit. Any first home buyer can purchase with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI).
- Foreign buyer ban — Foreign residents are banned from purchasing existing dwellings for two years from 1 April 2025, reducing competition for local buyers.
4. 100,000 New Homes for First Home Buyers
Labor has committed $10 billion to build up to 100,000 homes sold exclusively to first home buyers. Construction on the first projects is expected to begin in 2026–27, so these won't be available immediately — but the pipeline is real.
The program aims to deliver homes at prices below market value, as the government co-invests alongside state and territory governments using a mix of grants and zero-interest loans.
5. Housing Construction: Growing the Tradesperson Pipeline
The budget is expected to fund a new Housing Construction Apprenticeship stream, offering eligible apprentices in construction trades up to $10,000 in financial support. This is a supply-side measure — Australia simply doesn't have enough tradies to build the homes needed to meet the 1.2 million target over five years.
What This Means For You
If You're a First Home Buyer
The environment has rarely been more supportive on paper. The 5% deposit scheme with no cap is running now. Help to Buy — if the caps are expanded as expected — could make homeownership achievable in cities that were previously out of reach. The challenge remains actually finding an affordable property in a low-stock market with rates still elevated.
If You're a Property Investor
The CGT discount change is the one to watch. If it proceeds, any investment property you purchase after budget night may be subject to a higher tax rate on sale. Grandfathering for existing holdings is expected, but nothing is confirmed until 12 May. If you're weighing up a purchase before or after the budget, speak to us — the numbers can look very different depending on timing.
If You're an Existing Homeowner
The May 5 RBA rate decision is arguably more immediately relevant to your mortgage than the budget. But watch for any cost-of-living relief measures that could ease household budgets — energy bill relief and tax offsets have featured in recent budgets and could return.
Sources: Australian Government Budget 2025–26 — Housing measures already in effect (budget.gov.au); Senate Economics References Committee inquiry into housing affordability, March 2026; UDIA National, April 2026; Australian Government Help to Buy scheme guidelines
Written by Amit Narang, Mortgage Broker | Credit Representative 558902 of Outsource Financial Pty Ltd (ACL 384324)
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