Federal Budget 2026: every housing change for buyers

Treasurer Jim Chalmers handed down the 2026 federal budget tonight, and for first home buyers it is the most significant set of housing announcements in years. Three headline measures were confirmed: a substantial boost to the Help to Buy shared equity scheme, major reforms to negative gearing and capital gains tax that redirect investor incentives toward new builds, and a $10 billion commitment to build 100,000 homes sold exclusively to first home buyers. Here is what was confirmed and what each change means for your situation.

Help to Buy is expanding - and you may now qualify

The government committed approximately $800 million to the Help to Buy scheme, using the funding to raise both the property price caps and the income thresholds that determine eligibility.

Under Help to Buy, the federal government co-purchases up to 40 per cent of a new home (or 30 per cent of an existing home). You borrow less, need a smaller deposit, and carry lower monthly repayments. The scheme launched in December 2025 and has already helped 278 households into homes, with 7,700 of the annual 10,000 places still available.

The income cap change is the most immediately relevant update for buyers sitting just outside current eligibility. The scheme currently applies to singles earning up to $100,000 and couples up to $160,000. Updated thresholds will be released in the Treasury papers later this week. If you have previously been excluded by the income limit, it is worth checking whether the confirmed expansion now opens the door.

The lender panel is also expected to expand beyond the current two participants - Commonwealth Bank and Bank Australia - giving buyers more product options and giving mortgage brokers more schemes to work with across different lenders.

Use the Scheme Comparison Tool to compare Help to Buy against the 5 per cent deposit guarantee and state-based grants, and the LMI Calculator to see how much lenders mortgage insurance you would avoid by qualifying for either scheme.

Negative gearing and CGT - what was actually confirmed

The confirmed reforms go further than most pre-budget modelling anticipated. Rather than capping negative gearing at two investment properties, the budget abolishes negative gearing entirely for new purchases of established residential properties. Investors who build or buy new homes retain full negative gearing. The intent is to redirect investment capital toward construction of new housing supply, rather than competition for existing stock.

On capital gains tax, the 50 per cent discount for assets held longer than 12 months has been replaced with the pre-1999 indexation model. Under this approach, the cost base of an asset is adjusted for inflation, so only the portion of a gain that exceeds inflation is included in your taxable income. For long-term holders in a sustained inflationary environment, this can produce a lower tax bill than a flat 33 per cent discount. For shorter-term sales, the outcome depends on the inflation rate assumed over the holding period.

Two important points for first home buyers reading these changes:

• Existing investors are grandfathered. Current arrangements remain in place for properties already owned. The changes apply to new investment purchases only.
• Your home is unaffected. The capital gains tax main residence exemption - which covers your principal place of residence - is entirely unchanged. No first home buyer grants, stamp duty concessions, or scheme terms have been altered by tonight's budget.

For owner-occupiers buying a place to live in, tonight's changes are essentially neutral. For investors purchasing established homes, the calculation has shifted materially. Speak with a tax adviser or mortgage broker before making any decisions based on the confirmed changes, as the legislation must still pass parliament before it takes effect.

100,000 homes earmarked for first home buyers

The government confirmed a $10 billion commitment to build 100,000 new homes sold exclusively to first home buyers. Construction is expected to begin between 2026 and 2027, with site selections, state and territory agreements, and pricing targets to be released following the budget. These homes are new builds, designed to sit outside the existing competitive market.

The supply commitment also includes a further $2 billion for infrastructure to support an estimated 65,000 regional homes and $1.2 billion for state and territory housing infrastructure. Together these represent the largest federal housing supply package in recent memory.

For buyers who are not in a hurry, the 100,000 FHB homes are worth tracking. The detail - location, pricing, eligibility rules, and timeline - will determine how practical these homes are in each capital city and region. Subscribe to updates from Housing Australia once the delivery framework is published.

What this means for first home buyers

The practical implications vary depending on where you are in your buying journey:

• If you were previously above the Help to Buy income cap, check the updated thresholds once published later this week. You may now qualify for the shared equity scheme, which could significantly reduce your required deposit and monthly repayment.
• If you are competing with investors for established homes, the removal of negative gearing for new investor purchases in that segment means fewer investors have a tax incentive that owner-occupiers do not. Less investor demand in a price range can reduce competition over time, though the effect takes months to show in data.
• If you are 12 to 24 months from buying, the 100,000 FHB-exclusive homes are worth monitoring as an option outside the existing market. Eligibility criteria and pricing targets will be released over coming weeks.
• Your existing grants and concessions are unchanged. FHOG amounts, stamp duty exemptions, and the 5 per cent deposit guarantee are all unaffected. Stack what is available to you using the tools below.

As with any budget, the announcements tonight require legislation to become law. A financial adviser, mortgage broker, or tax accountant can help you understand how the confirmed changes affect your personal situation before acting.

Run the numbers

Use these tools to understand how tonight's confirmed changes, and the schemes already available to you, affect your path to ownership:

• Scheme Comparison Tool - compare Help to Buy (with updated caps once published), the 5 per cent deposit guarantee, and state grants side by side based on your income and location
• Grant Stacker - compare which combination of federal and state support may apply based on your state, property type, and purchase price
• Borrowing Power Calculator - model your borrowing capacity at the current 4.35 per cent cash rate and stress-test against further rate increases
• LMI Calculator - calculate the lenders mortgage insurance you would save by qualifying for the 5 per cent deposit guarantee or Help to Buy