Australia’s May 2026 federal budget was one of the more ambitious tax packages impacting financial services since the Future of Financial Advice reforms in 2013. One of the most significant (and controversial) measures was the scaling back of negative gearing in investment property. However, while this change may be politically sensitive, it will only see a mild rebalancing of the Australian investment portfolio.
GlobalData 2025 Financial Services Consumer Survey
Australia has shown an unusual affinity for property investing compared to other similar markets. Among Australia’s affluent investors (defined as individuals with more than $25,000 in liquid assets), 37% hold property investments as per GlobalData’s 2025 Financial Services Consumer Survey. This is above the 32% average one sees across peer markets Canada, the US, the UK, New Zealand, Singapore, and Hong Kong (China SAR). In contrast, financial market investments (including stocks and funds) are lower at 71% uptake among Australia’s affluent individuals, compared to an average of 80% across these markets.
The changes to the capital gains discount—and most notably the scaling back of negative gearing to apply just to rental income, not the individual’s entire income—will result in some loss of attractiveness for property going forward. However, with existing property investment grandfathered in and the changes not applying to new build investment properties, the hit will ultimately be minor. The new measures will likely simply bring Australia closer to the Anglo market average.
This is good news for wealth managers, as they should see a corresponding rise in the rate of investing into financial markets. This increase could make Australia one of the hottest markets for new investors over the next three years as it adopts more typical investment patterns. Australian retail wealth managers should review their onboarding strategies and ensure they address any friction points, as there are significant growth opportunities coming.
Andrew Haslip is Head of Content for Wealth Management and Asia-Pacific (FS) at GlobalData
