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For buyers planning their next move, the latest Federal Budget announcements may provide greater certainty and create new opportunities for those considering a new home in Victoria.
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A renewed focus on new housing supply
The 2026–27 Federal Budget introduces some of the most significant housing and property tax reforms seen in decades. At the centre of these changes is a clear policy direction: encouraging investment in new housing delivery while improving long-term access to home ownership.
For buyers considering a new build, whether as a primary residence or part of a broader property strategy, this renewed focus reinforces the important role new homes will play in addressing supply constraints, supporting affordability and shaping future housing demand across Australia. It also highlights the value of investing in a home designed for modern living, with opportunities to explore a wide range of home designs suited to different lifestyles, budgets and stages of life.
Why new builds matter more than ever
Among the key housing measures announced in the 2026–27 Federal Budget are proposed changes to negative gearing and Capital Gains Tax (CGT), designed to encourage investment in new housing and support future supply.
Under the proposed reforms, investors purchasing established residential properties after Budget night may no longer be able to offset rental losses against their personal income from 1 July 2027. Newly built homes, however, are expected to remain exempt from these changes.
This distinction highlights the important role new housing plays in addressing Australia’s housing needs, directing investment towards homes that increase overall housing supply rather than competing for existing properties.
For buyers planning to build, the reforms further reinforce the long-term value of new communities and well-positioned house and land opportunities. As investment continues to support new housing delivery, more Australians may benefit from greater choice, modern home designs and access to thoughtfully planned neighbourhoods across Victoria.
Supporting the delivery of new homes
The Federal Budget reinforces a clear priority: increasing the supply of new homes across Australia. Through a range of proposed housing and taxation reforms, the Government is seeking to encourage investment in housing that contributes directly to future supply.
Under the proposed changes, qualifying newly built homes are expected to retain access to key investor incentives that may no longer apply to some established properties from 1 July 2027.
This distinction reflects a broader focus on supporting the delivery of new housing, encouraging investment in homes that add to Australia’s housing stock rather than competing for existing properties.
For buyers planning to build and live in a new home, these measures may help support the continued growth of new communities while easing pressure on parts of the established housing market over time. As more housing is delivered, buyers can benefit from greater choice, modern neighbourhoods and homes designed to suit the way Australians live today.
Understanding negative gearing
Negative gearing has long been a feature of Australia’s property market, allowing investors to deduct rental losses from their taxable income. For many investors, it has played an important role in supporting long-term property investment.
Under the proposed reforms, investors purchasing established homes after Budget night would still be able to carry forward losses or offset them against rental income from other investment properties. However, those losses may no longer be used to reduce their personal income tax.
Qualifying newly built homes are expected to retain access to existing negative gearing arrangements. This approach reflects the Government’s broader focus on encouraging investment in new housing, helping increase supply while supporting the delivery of homes needed to meet Australia’s growing population.
While these changes are primarily targeted at investors, they also reinforce the important role new homes and emerging communities will play in meeting future housing demand across Victoria and beyond.
Capital Gains Tax changes explained
The Federal Budget also proposes changes to Capital Gains Tax (CGT) concessions from 1 July 2027.
Currently, assets held for more than 12 months generally receive a 50% CGT discount when sold. Under the proposed changes, this would move to an inflation-indexed model alongside a minimum 30% tax rate on capital gains.
According to the Government, the reforms are intended to better reflect real gains above inflation while reducing tax advantages that have historically favoured higher-income investors.
For owner-occupiers, the main residence exemption remains unchanged. These measures are focused on investment properties and are not expected to affect homes built or purchased as a primary place of residence.
For many buyers planning to build and live in their home, the proposed changes provide additional confidence that the Government’s housing strategy remains focused on supporting home ownership and increasing the supply of new housing across Australia.
What this could mean for the Victorian market
While the long-term impact will take time to unfold, many economists expect these reforms to influence investor behaviour and shape broader housing trends across Australia.
Potential outcomes may include:
- A stronger focus on house and land opportunities that contribute to new housing supply.
- Increased development activity across Melbourne’s growth corridors and key regional locations.
- More new communities coming to market to help meet future housing demand.
- Ongoing government support for initiatives that encourage housing delivery and affordability.
Victoria’s growth areas and regional centres continue to benefit from significant investment in infrastructure, transport, education and community amenities. For buyers, this creates opportunities to enjoy more space, a connected lifestyle and long-term value within thoughtfully planned communities.
As new neighbourhoods continue to emerge, buyers may also benefit from greater choice, modern infrastructure and access to homes designed to suit the needs of contemporary Australian families.
Faster approvals and simpler pathways to build
The Federal Budget also places a strong focus on planning reform and construction efficiency, with infrastructure funding linked to state-based initiatives designed to increase housing supply and support the delivery of new homes.
Key areas of reform include:
- Faster planning and development approvals.
- Simplified pathways for new residential developments.
- Improved land availability to support future housing growth.
- Greater consistency in building standards through a nationally aligned construction code.
Together, these measures are designed to reduce delays, improve productivity and support the delivery of new homes across Australia.
For buyers looking to build, streamlined processes could help bring new communities, house and land opportunities and future housing developments to market sooner. Over time, this may provide greater choice and improved access to homes in well-connected locations across Victoria, while also supporting innovative housing solutions such as dual occupancy homes that make more efficient use of available land.
Supporting the construction workforce
To help address ongoing labour shortages, the Government is investing $85.2 million to accelerate skills assessments for qualified migrant tradespeople and improve pathways into the construction workforce.
This builds on a range of existing initiatives designed to strengthen the industry’s long-term capacity, including:
- Free TAFE programs that support training in high-demand trades.
- A $10,000 apprentice incentive for those entering residential construction careers.
Together, these measures are intended to strengthen the skilled workforce needed to support housing delivery across Australia. A larger, more capable construction workforce can help improve industry capacity, support the delivery of new homes and contribute to meeting future housing demand.
For buyers, continued investment in construction skills and workforce development provides confidence that the industry is better equipped to support the delivery of quality homes and thriving new communities in the years ahead. Learn more about the Boutique Homes building journey and the experience of building with one of Victoria’s leading home builders.
Dual occupancy builds: a strategic response to housing supply reforms
The Federal Budget’s continued focus on increasing housing supply also highlights the growing role dual occupancy home designs can play in meeting Australia’s future housing needs.
By delivering two homes on a single block or subdivided lot, dual occupancy developments help make more efficient use of available land while contributing to greater housing choice in both established suburbs and emerging growth areas.
As governments continue to prioritise housing delivery through planning reforms, infrastructure investment and streamlined approval pathways, dual occupancy projects are well positioned to support these objectives and contribute to increasing overall housing supply.
For buyers seeking a more flexible approach to building, dual occupancy homes can offer opportunities to maximise land value, support multigenerational living, generate rental income or create a long-term investment strategy. At the same time, they contribute to the delivery of much-needed new housing across Victoria.
For those considering whether their property may be suitable, Boutique Homes also offers a complimentary dual occupancy design and site consultation, providing expert guidance on what may be achievable based on your land, goals and future plans.
Potential advantages for buyers and investors
As demand for new housing continues to grow, dual occupancy developments can offer a range of benefits for both owner-occupiers and investors looking to maximise the potential of their land.
- More efficient use of land, particularly in well-connected suburbs and high-growth locations.
- The potential for multiple income streams, with one dwelling occupied and the other leased.
- Greater flexibility to support multigenerational living, downsizing strategies or long-term investment goals.
- Strong alignment with policies designed to encourage new housing supply, including access to applicable incentives and tax benefits for qualifying new dwellings.
Whether you’re exploring an investment opportunity, planning for future family needs or looking to unlock additional value from your property, Boutique Homes offers a range of dual occupancy home designs tailored to a variety of block sizes, lifestyles and long-term objectives.
Additional tax relief for households
The Budget also includes a range of cost-of-living measures designed to provide broader financial support for Australian households, including:
- An instant tax deduction of up to $1,000 for eligible work-related expenses.
- A 2.9% increase to the Medicare levy low-income threshold.
While these measures are unlikely to significantly increase borrowing capacity on their own, they may help improve household cash flow and provide greater financial flexibility when managing day-to-day expenses, saving for a deposit or planning for future homeownership goals.
When combined with existing Victorian initiatives, such as the First Home Owner Grant and eligible government homebuyer schemes, the outlook remains positive for many buyers considering a new home build.
For those beginning their homeownership journey, understanding the grants, incentives and finance options available can help make building a new home more achievable and provide greater confidence when planning for the future.
Building with Boutique Homes
As demand for new housing continues to grow, many buyers are seeking homes that combine thoughtful design, quality craftsmanship and long-term value.
At Boutique Homes, we create homes designed for the way Australians live today, with a collection of home designs that balance style, functionality and liveability. Whether you’re building your first home, upgrading for a growing family or planning your next move, our team can help you explore the opportunities available across Victoria.
For inspiration, visit one of our display homes or explore our Design Inspiration hub to discover contemporary interiors, curated finishes and ideas for every stage of your homebuilding journey.
Speak with a New Homes Consultant
Whether you’re planning your next home, exploring an investment opportunity or simply considering your options, our New Homes Consultants can help you understand what’s possible based on your budget, lifestyle and long-term goals.
Information on this page does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for your circumstances and seek independent professional advice where required.
This article is general in nature and is based on the 2026–27 Federal Budget announcements made on 12 May 2026. Budget measures are subject to parliamentary approval and may change. The information provided is intended as a guide only and may be updated as further details become available.
Financial services are provided by Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence 385487. The building practitioner is ABN Group (Vic) Pty Ltd trading as Boutique Homes, CDB-U 49215. Finance options are available through Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence 385487.
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