The Federal Government has handed down one of the most significant housing-focused budgets in decades, introducing major changes that could reshape Australia’s property market over the coming years.
For buyers, sellers, investors and developers across Wagga Wagga, the Riverina and regional Australia, these reforms could influence everything from housing demand and property prices through to investment strategies and new housing supply.
At Fitzpatricks Real Estate, we know how important it is to stay informed in a changing market. Below is a simple breakdown of the key announcements from the 2026 Federal Budget and what they could mean locally.
Negative Gearing changes shift focus to new homes
One of the biggest announcements is a change to negative gearing rules for residential property.
What is negative gearing?
Negative gearing is when the costs of owning an investment property (like interest on the loan, maintenance, and other expenses) are higher than the rental income it generates, resulting in a short-term loss. In Australia, this loss can often be offset against other income (like wages), which may reduce the amount of tax you pay.
What’s changing:
- Existing property investors will be grandfathered under current rules
- From July 1, 2027, negative gearing will only apply to newly built homes
- Investors buying established homes after this date will no longer be able to offset rental losses against other income
The Government says this is designed to encourage investment into new housing and reduce competition in the established market.
What this could mean for Wagga Wagga:
- More demand for new estates and house-and-land packages
- Increased interest in off-the-plan and new builds
- More development activity across growth areas in the Riverina
- Potential cooling of investor demand for established homes
Capital Gains Tax (CGT) changes explained
The Budget also proposes changes to Capital Gains Tax concessions.
What is Capital Gains Tax?
Capital Gains Tax (CGT) is the tax you may pay on the profit you make when you sell an asset, such as an investment property. In simple terms, it’s calculated on the difference between what you paid for the property and what you sell it for, after allowable costs are taken into account. In Australia, if the asset is held for more than 12 months, you may be eligible for a discount on the taxable gain (for individuals and some trusts).
Current rule:
Investors receive a 50% CGT discount on assets held longer than 12 months.
Proposed change:
- The 50% discount will shift to an inflation-linked indexation model from July 2027
- Existing investments will be grandfathered
- Some concessions may remain for newly built properties
What this means for investors:
- Greater focus on long-term investment planning
- Increased importance of rental yield over capital growth alone
- More appeal toward newly constructed investment properties
For Riverina investors, this makes strategic property decisions even more important.
More opportunities for first-home buyers in Wagga
The government expects that these tax reforms could help an additional 75,000 Australians enter the property market over the next decade by reducing investor competition in established homes.
Potential benefits for first-home buyers:
- Less competition from investors in some price brackets
- Improved access to established homes.
- More support for entry-level buyers if supply improves
While affordability challenges remain, any shift in demand could create better opportunities for local buyers looking to enter the market.
$2 Billion housing infrastructure fund to unlock supply
A major part of the Budget is a $2 billion Local Infrastructure Fund aimed at increasing housing supply across Australia.
The funding will support:
- Roads and transport infrastructure
- Sewer and water services
- Utilities and essential services
- Infrastructure linked to new housing developments
This support is tied to approximately 65,000 new homes nationally over the next decade.
Why this matters for the Riverina:
- More land releases for new housing estates
- Increased residential development activity
- Stronger long-term population growth in regional areas
- Greater support for housing expansion in Wagga Wagga
Infrastructure is often a key driver of property growth in regional markets.
Foreign investor restrictions extended
The Government has also extended restrictions preventing foreign investors from purchasing established homes until 2029.
This policy aims to:
- Improve housing availability for Australian buyers
- Reduce pressure on established housing stock
- Support local home ownership opportunities
What could this mean for property prices?
While the full impact will take time to unfold, early expectations suggest:
- Slight moderation in investor demand for established homes
- Stronger demand for new builds and developments
- Increased housing construction activity over time
However, some analysts caution that if new housing supply doesn’t keep pace, rental markets could remain tight, particularly in regional areas like Wagga Wagga where demand is already strong.
What it could mean for you
For Buyers
- Potentially less competition from investors
- More opportunities in established homes
- Stronger focus on new builds and house-and-land packages
For Sellers
- Some established homes may see softer investor demand
- New homes and development-ready land may attract stronger interest
For Investors
- Investment strategies may shift toward newly built properties
- Increased importance of rental yield and long-term strategy
- More need for tax and investment planning advice
Please note: these changes have not been legislated yet and you should seek professional advice if you are considering changing your investment strategy.
Click here to read more about the 2026-27 Federal Budget.
Final thoughts
The 2026 Federal Budget marks a clear shift in housing policy, with a strong focus on increasing supply and encouraging investment into new construction.
For the Wagga Wagga and Riverina property market, this could bring both opportunities and challenges, particularly as investor behaviour and housing supply begin to adjust.
Our agents continue to monitor these changes closely and help our clients make confident, informed decisions in a shifting market.
If you’d like to understand how these changes could affect your property plans in Wagga Wagga, our team is here to help.
You might also be interested in
May 7, 2026
What Real Estate Agents Do for Buyers (And How It Helps You Win the Right Property)
Last week we explored what real estate agents do for sellers, but their role doesn’t stop there. Agents also play an important part in helping buyers navigate the property market and make confident de
