Experts say the biggest winners of federal Labor’s tax reforms are developers, builders, even the government itself, as new buyers face a $1m-plus bill to get an average house and land package in South East Queensland, home to arguably the biggest migrant relocation in the nation.
Federal Treasurer Jim Chalmers announced sweeping reforms to negative gearing and capital gains tax discounts – two of the key incentives for property investors – during the 2026/27 Budget.
Under the new reforms, new investors will only be able to negatively gear newly-built properties, while current capital gains tax discounts for investors selling properties will be replaced by an indexation system tied to inflation.
Current investors will not be affected by the negative gearing reforms due to grandfathering provisions.
This means Gen X and Baby Boomer landlords will be able to keep the very tax mechanisms that helped them build wealth, while new investors will have that ladder to wealth yanked away from them.
![Chalmers](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Federal Treasurer Jim Chalmers Pic: Lyndon Mechielsen/Courier Mail
And rentvestors priced out of their own markets are likely to feel the most heat, unable to afford to buy where they need to live and offered no incentives to buy an established home in a more affordable region, confined to new build investments only.
Real Estate Buyers Agents Association of Australia (REBAA) president Melinda Jennison said that the “most obvious beneficiaries are developers, builders and sellers of new investment stock”.
“Governments may also benefit,” she said. “New builds carry significant statutory taxes, regulatory costs and infrastructure charges that are embedded into the final purchase price. “These costs ultimately flow through to local, state and federal government revenue, meaning the buyer pays not just for the dwelling itself but also a substantial layer of charges attached to delivering new housing.”
Real Estate Buyers Agents Association of Australia (REBAA) president Melinda Jennison Photo: Supplied
Hot Property Buyers Agency buyers agent Zoran Solano agreed.
“Tradies are the clear winners in this budget, but with the undersupply of trades across the country I can’t help but think that this will only add fuel to the fire of construction prices,” he said.
“Off-the-plan sales will skyrocket with project marketers and off-the-plan agents also the big winners.”
Hot Property Buyers Agency buyers agent Zoran Solano said tradies were the “clear winners”
The controversial changes could also make it even more competive and unaffordable for young buyers, pitting investors and first home buyers against each other in new home estates rather than both housing tyeps, new and established.
The federal Budget was handed down on May 12.
Just two days later it was revealed that new house and land packages were already beyond $1 million in southeast Queensland, which has seen unprecedented demand for vacant land.
RPM’s SEQ Greenfield Market Report for April 2026 revealed the region’s median land price had surged past $500,000.
Combined with an average build cost now also exceeding $500,000, a typical house and land package in Greater Brisbane sits at $1.01 million.
“The greenfield sector used to be the great equaliser,” RPM managing director for QLD & NSW Clinton Trezise said.
“It was how average households got their foot in the door. That door is still open, but the step up is getting too high.”
The average cost to build a house in Australia according to the most recent Australian Bureau of Statistics was $443,422, as of December 2024, with the cost of land added onto that price and location dependent.
A development in Box Hill, Sydney, has land listed from $720,000, with completed home in Marsden Park from $1.46 million.
In Greater Melbourne, there are vacant lots in Donnybrook listed from $301,500, while in South Australia, a 614sq m block in Riverlea Park will set you back from $333,900.
The average house and land package in SEQ is now $1.01m
Mr Solano likened the new reality to a ‘Buckets of Water’ scenario.
“One bucket of water is first home buyers, one is investors, one is upsizers or downsizers, and the final one, which I think people have forgotten about, are foreign investors,” he said.
“Those four buckets, when buying property, can only pour into two buckets – established property and new property.
“The Federal Government has basically told everyone to poor ‘four buckets into one’ – the new property market – when it is already undersupplied and overpriced.”
Right Property Group director Victor Kumar said the real question would be what would happen to the pricing for new home builds going forward.
“Investors will naturally gravitate towards newer homes as it gives them some tax relief, which will increase demand,” he said.
“The pipeline of builds will take a few years to fill, which is compounded by escalating build costs.
“The result is new homes will increase in price, therefore pushing home ownership further away from the people it is intended to help.”
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Right Property Group director Victor Kumar says the likely effect on the heightened deman for new homes would be higher prices
Consolidated Properties CEO and chairman Don O’Rorke said that while his projects – luxury apartments – would not be affected by the tax changes as they were mostly Baby Boomer and downsizer owner-occupiers, the nation needed a whole-of-government approach to increase supply and moderate home costs.
He said the $2 billion allocated to accelerate new infrastructure such as roads and sewerage to accelerate housing supply was “undeniably a good thing”.
But it would seem that not all voters agree.
The latest Newspoll, commissioned by The Australian, has revealed voters are expecting more financial pain and little relief on inflation and housing.
The survey recorded 1252 voters from Thursday to Sunday and found that 52 per cent expect to be worse of, 11 per cent expect to be better off, and 37 per cent said they would see no change.
Nearly half (47 per cent) say the budget is driving division between young and old Australians.
Younger Australians appear to be wary of the budget and its ability to solve the problem of intergenerational equity and the housing crisis.
Renters are also bracing for pain, with only 10 per cent expecting to be better off and 44 per cent claiming they will be worse off.
Even with grandfathering capital gains tax changes, 67 per cent of investment property owners think they’ll lose out.
The poll came out the same day the Queensland state government announced it had struck a deal with the federal government to build more than 51,000 homes, including 20,000 exclusively for first home buyers, at Mount Peter in Cairns, southern Thornlands and Waraba in Moreton Bay.
Mount Peter in Cairns is part of the new State and Federal Government deal. Picture: supplied.
The first of the new homes for first home buyers are expected to be completed by mid-2028.
Deputy Premier Jarrod Bleijie said the state government remained focused on housing supply.
“Availability equals affordability and by providing funding to get the vital infrastructure like roads, water, sewerage and power in place, the builders can get building,” he said.
Under the National Housing Accord, all states and territories agreed to build 240,000 homes per year over five years to June 2029.
Australia had 198,396 dwellings approved in the last 12 months.
Earlier this month, Australian Bureau of Statistics data showed that in the three months to February there was a 21,600 construction job shortfall across the country.
It was a 19.3 per cent jump from November, when there were just 18,100 construction sector jobs employers were seeking to fill.
That was the lowest number since May, 2020, when the country was in the depths of the Covid-19 pandemic.
Housing Industry Association senior economist Tom Devitt said the only short-term solution to the demand would be increased numbers of skilled workers for the construction sector coming from offshore.
