How the 2026 Federal Budget Could Impact Home Buyers and Property Investors

Two budgets landed within days of each other in May 2026. The Federal Budget on 12 May, and the WA State Budget on 7 May. Together, they introduce a comprehensive set of housing policy changes across both federal schemes and WA taxation. Whether you are saving for your first home, planning to build, or holding investment property, the combined effect of these two budgets will change your numbers. Some changes are immediate. Others take effect from 1 July 2027. And some are still subject to implementation being finalised. Here is what Perth buyers and investors need to know.

1. First Home Buyers: More Ways In, with Bigger Thresholds

Perth first home buyers come out of both budgets better than they went in. This is the WA Government’s third round of stamp duty relief for first home buyers, and the federal shared equity and guarantee schemes have been broadened. The combined effect reduces upfront entry costs for eligible buyers.

WA STAMP DUTY: CHANGES ANNOUNCED 7 MAY 2026

Established and new homes: stamp duty exemption raised from $500,000 to $600,000

Concession now applies up to $800,000 (was $700,000)

Vacant land: exemption raised from $350,000 to $450,000

Vacant land concession now applies up to $550,000

First Home Owner Grant cap raised from $750,000 to $800,000 (south of the 26th parallel, including all Perth metro)

The WA Government announced the changes on 7 May 2026. The changes cannot commence until the enabling legislation is introduced and passed, and RevenueWA’s system updates are complete — currently estimated for 28 July 2026. Eligible transactions entered from 7 May 2026 will be reassessed and refunded where applicable once the changes take effect.

For a buyer purchasing a $590,000 property in Perth, this means paying zero stamp duty instead of thousands under the old threshold. For buyers in the $600,000 to $800,000 range, the concession reduces the duty significantly. The WA Government estimates more than 25,000 first home buyers will benefit over the next four years, assisting around 6,000 first home buyers per year.

Keystart lifted its own property price limit from $800,000 to $860,000 in April 2026, ahead of the May budgets. It is a separate update to the scheme’s own thresholds, not a budget measure — but it moves in the same direction: keeping more Perth properties within reach for buyers using the state-backed low-deposit lending scheme.

Source: Keystart.com.au, April 2026

2. The First Home Guarantee: No More Place Limits

The federal First Home Guarantee scheme has been restructured in a way that removes the biggest frustration buyers faced with it.

Previously, the scheme ran a capped number of places each financial year. Eligible buyers missed out because the spots ran out. The government removed that cap. Any eligible first home buyer can now access the scheme without waiting for the next financial year or entering a ballot. The government also removed income caps, effective 1 October 2025.

Here is how the scheme works now:

Buy with as little as a 5% deposit

No Lenders Mortgage Insurance (LMI) required. Buyers may avoid a substantial LMI cost, although the amount depends on the lender, loan amount and individual circumstances — confirm the potential saving with your mortgage broker.

Available for both new and established properties

No annual place limit and no income cap. If you are eligible, you can apply now.

Source: Housing Australia | housingaustralia.gov.au | Place and income cap removal effective 1 October 2025

Eligible buyers are no longer subject to annual place limits and can apply whenever they meet the eligibility criteria. Talk to your mortgage broker about which participating lenders operate in Western Australia and what their property price caps are.

3. Help to Buy: The Government Co-Buys With You

The Help to Buy scheme launched in December 2025 under the Help to Buy Act 2024 (Cth) and has been retained in the 2026 Budget. It is a shared equity arrangement where the Commonwealth Government acquires an equity interest in your home alongside you, reducing the size of the loan you need. The scheme is now available in Western Australia.

New homes: Government contributes up to 40% of the purchase price

Existing homes: Government contributes up to 30% of the purchase price

Minimum deposit of 2%

No LMI payable

Income caps: $103,000 per year for individuals, $165,000 for joint or single-parent applicants (indexed from 1 July 2026)

Up to 10,000 places available nationally per year (40,000 over 4 years)

You own the home outright. The government holds an equity share, not a landlord role.

You can buy out the government’s share over time as your equity grows.

Source: Help to Buy Act 2024 (Cth) | Help to Buy (Commonwealth Powers) Act 2025 (WA) | treasury.gov.au | housingaustralia.gov.au

One important detail for Perth buyers: because the government contributes a larger share for new builds (40% vs 30%), building new gives you access to more government equity support under this scheme than buying an established home. That difference is written into the Help to Buy Act 2024.

Help to Buy is available through a limited number of participating lenders. Confirm current lenders with a mortgage broker before you rely on this scheme in your planning.

4. Housing Supply: What the 2026 Budgets Are Funding

The 2026-27 Federal Budget includes substantial investment in housing-enabling infrastructure. The following figures are drawn from the Budget Overview 2026-27 (budget.gov.au), published 12 May 2026.

FEDERAL BUDGET 2026-27: HOUSING SUPPLY MEASURES

$2 billion Local Infrastructure Fund — connects water, power, sewerage and roads to support up to 65,000 new homes over the next decade

$6.3 billion total federal investment in housing-enabling infrastructure

75,000 additional owner-occupiers estimated over the decade, as projected by Treasury from the negative gearing and CGT reforms (see Section 5)

Source: Budget 2026-27, Cost of Living, budget.gov.au/content/02-cost-of-living.htm | Budget Overview 2026-27, 12 May 2026

The WA-Commonwealth $2 Billion Housing Deal

The WA Government and the Commonwealth signed a $2 billion joint investment in May 2026 to fund new home delivery in Western Australia.

What the WA Government has confirmed:

WA deal: $2 billion joint investment (WA Budget contributing as part of its $4.7 billion housing package)

11,000 new homes exclusively for Western Australian first home buyers

Homes available to first home buyers, not investors

Source: WA Government media statement, May 2026 | wa.gov.au

The program will deliver homes as each project is completed, and timelines will vary between developments.

5. Property Investors: Negative Gearing and CGT from 1 July 2027

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026, after passing through both houses of Parliament in the preceding days. The negative gearing and capital gains tax changes are scheduled to commence from 1 July 2027.

ENACTED: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 — received Royal Assent 26 June 2026.

Negative gearing and CGT changes commence 1 July 2027.

Seek current advice from a qualified tax adviser before making investment decisions based on these changes.

Here is what the Act provides:

Negative Gearing

Currently, if your investment property costs more to hold than it earns in rent (negatively geared), you can deduct that shortfall against all your income, including your salary. From 1 July 2027, under the Act:

New residential builds: full negative gearing preserved. No change.

Established properties bought before 7:30pm AEST 12 May 2026: grandfathered under existing rules. Full deductibility continues.

Established properties bought after 7:30pm AEST 12 May 2026: losses can only be deducted against income from residential properties (including capital gains on residential property), not wages or other income. Excess losses can be carried forward to offset residential property income in future years.

Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, legislation.gov.au (C2026A00049) | ato.gov.au | budget.gov.au/content/04-tax-reform.htm

Capital Gains Tax

The CGT changes apply to gains accruing after 1 July 2027. Non-retrospective: gains already accrued before 1 July 2027 retain the existing 50% discount. Only the portion of a gain that builds up after 1 July 2027 falls under the new rules.

Current rule: hold for 12 months and only 50% of the capital gain is taxable.

From 1 July 2027: the 50% CGT discount is replaced by cost base indexation, with a 30% minimum tax rate on real capital gains accruing after that date.

Gains already accrued before 1 July 2027: retain the 50% discount. Only gains accruing after 1 July 2027 fall under the new rules.

New builds: investors can choose either the existing 50% CGT discount or cost base indexation with the 30% minimum tax rate when they sell. One catch: the Act does not yet define exactly what counts as a “new residential dwelling” for this purpose — confirm your specific build qualifies before you run this into your numbers.

Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, legislation.gov.au (C2026A00049) | Income Tax Assessment Act 1997 (as amended) | ato.gov.au

If you are considering selling an investment property after 1 July 2027, run the numbers now. The tax on the gain may be materially different to what you would pay under current rules. A qualified tax adviser can model the impact on your specific situation.

6. How 2026 Measures Treat New and Established Property Differently

Several measures in the 2026 Budgets provide different treatment for new residential construction compared to established property. The following is based on the legislation and announcements as they stand.

Help to Buy: government contributes up to 40% for a new home, versus 30% for an established home (Help to Buy Act 2024).

Negative gearing: new residential builds retain full deductibility from 1 July 2027. Established properties bought after 7:30pm AEST 12 May 2026 do not (Treasury Laws Amendment (Tax Reform No. 1) Act 2026).

CGT: new build investors can elect to use the existing 50% CGT discount instead of the new indexation rules (Treasury Laws Amendment (Tax Reform No. 1) Act 2026).

Off-the-plan duty concession: extended to 30 June 2028 and proposed to expand to include properties in a survey-strata scheme (announced 12 March 2026). Note: the enabling legislation is yet to be introduced and passed. Commencement is currently estimated for 28 July 2026.

Stamp duty thresholds: both new and established homes benefit from the higher WA exemption and concession thresholds (Duties Act 2008 WA, effective from when the enabling legislation commences, currently estimated for 28 July 2026).

Sources: Help to Buy Act 2024 (Cth) | Treasury Laws Amendment (Tax Reform No. 1) Act 2026 | WA State Budget 7 May 2026 | wa.gov.au/government/announcements/the-plan-duty-concession

Across the announced measures, multiple policies are structured to support new housing supply. The treatments described above are based on the legislation and announcements as currently in force or drafted.

7. The Bigger Picture: Perth Supply Is Growing

The budgets did not land in isolation. The construction data behind them is relevant.

Building approvals across Western Australia grew to 25,050 homes in the year to February 2026. Building commencements increased to 23,830 new homes in 2025. The construction workforce grew to a record 172,500 in February 2026 (all WA State Budget 2026-27, ourstatebudget.wa.gov.au). The supply pipeline is building, but demand continues to run ahead of it.

Western Australia recorded the fastest population growth of all Australian states in the year to December 2025, at 2.2% (ABS, National, State and Territory Population, December 2025). Population-driven housing demand remains strong.

The WA Government is investing $1.3 billion in land development, focusing on growth corridors including North Ellenbrook, East Wanneroo, Ballajura, Yanchep and Byford. The WA Government is establishing two Housing and Infrastructure Advanced Manufacturing Facilities in Neerabup (Built Living) and Kwinana (Atlas Precast) with $48 million in state support, targeting faster and more cost-effective apartment construction.

Sources: WA State Budget 2026-27, ourstatebudget.wa.gov.au (building approvals, commencements, workforce and land development figures) | ABS National, State and Territory Population, December 2025 | wa.gov.au (Advanced manufacturing facilities, 5 May 2026)

What This Means for You, Specifically

Budget announcements are general. Your situation is specific. The numbers that matter are yours: your income, your deposit, your timeline, and whether the schemes you are eligible for actually reduce your cost of entry.

We are builders, not financial advisers or mortgage brokers. We do not tell you how to structure your finance or what to do with your investment portfolio. What we can do is tell you what building with Ruscon looks like in practical terms, what current build timelines are in Perth, and whether the land and build combinations you are considering make sense.

If you are a first home buyer trying to understand how the expanded schemes apply to a new build, or an investor working through what the negative gearing and CGT changes mean for your build-to-hold strategy, get in touch with the Ruscon team. We give you straight answers, not a sales pitch.

admin@rusconconstruction.com.au

DISCLAIMER

This article is general information only and does not constitute financial, tax, legal or investment advice. Negative gearing and CGT changes are legislated under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (enacted 26 June 2026) and are scheduled to commence 1 July 2027. WA stamp duty threshold changes were announced on 7 May 2026. Commencement is subject to enabling legislation being introduced and passed, and system updates being completed — currently estimated for 28 July 2026. Federal measures have different commencement dates. Refer to the relevant program for applicable commencement dates. The off-the-plan duty concession expansion to survey strata was announced on 12 March 2026 and is subject to enabling legislation being introduced and passed, with commencement currently estimated for 28 July 2026. Confirm all scheme eligibility, figures and thresholds with a qualified mortgage broker or financial adviser before making any decisions.

SOURCES

Duties Act 2008 (WA) | WA State Budget 7 May 2026 | wa.gov.au/government/announcements/2026-27-housing-taxation-package

Keystart | keystart.com.au

Housing Australia | First Home Guarantee | housingaustralia.gov.au | Effective 1 October 2025

Help to Buy Act 2024 (Cth) | Help to Buy (Commonwealth Powers) Act 2025 (WA) | housingaustralia.gov.au | treasury.gov.au

Federal Budget 2026-27 | Budget Overview 2026-27 | budget.gov.au

WA Government media statement, May 2026 — WA-Commonwealth $2 billion housing deal | wa.gov.au

Treasury Laws Amendment (Tax Reform No. 1) Act 2026, No. 49 2026 (enacted 26 June 2026, legislation.gov.au/C2026A00049) | ato.gov.au | budget.gov.au/content/04-tax-reform.htm

Income Tax Assessment Act 1997 (as amended by Treasury Laws Amendment (Tax Reform No. 1) Act 2026)

WA State Budget 2026-27, ourstatebudget.wa.gov.au (land development investment)

ABS National, State and Territory Population, December 2025

WA Government media statement, 5 May 2026 — Advanced manufacturing facilities (Kwinana and Neerabup)

Off-the-plan duty concession | wa.gov.au/government/announcements/the-plan-duty-concession

Information current as at June 2026.