2026 Federal Budget Analysis: Why New Homes Are The New Gold Standard

On Tuesday night, the Treasurer handed down the 2026 Federal Budget, signaling the most significant shift in housing tax policy in almost three decades. At VIMG, we’ve been closely monitoring these announcements to understand exactly how they impact our community of owner-occupiers and investors.

The directive from the Commonwealth is clear: the government is moving away from supporting the turnover of existing dwellings and is instead throwing its full weight behind new housing supply.

These reforms create an extremely compelling financial case for investing in new-build projects.

 

 

The $2B ‘Enabling Infrastructure’ Stimulus: Unlocking 65,000 Homes

A significant part of the Government’s supply-side response is the establishment of a new $2 billion Local Infrastructure Fund. This funding is designed to help local governments and state utilities bypass traditional bottlenecks—such as water, power, sewerage, and road connectivity—that often delay land releases.

• The Detail: The Government estimates this stimulus will support the delivery of up to 65,000 new homes over the next decade.

• The VIMG Advantage: This stimulus fast-tracks the livability and connectivity that drive capital growth. VIMG developments are strategically positioned to take advantage of this stimulus, situated within government-backed corridors. Notably, $500 million is reserved for regional hubs, directly supporting master-planned communities like Lancelin South.

 

 

Changes to Capital Gains Taxation

In a departure from the flat 50% Capital Gains Tax (CGT) discount, the 2026 Budget transitions toward an inflation-indexed model for CGT calculation. Under these new rules, taxable gains are adjusted for the Consumer Price Index (CPI), meaning investors are taxed on the “real” gain above inflation.

However, the Government has introduced a unique exemption to support housing supply. While buyers of established properties will be moved onto the indexation model from July 1st, 2027, investors in new residential properties retain the power to choose between the new CPI-adjusted rules or the old CGT discount.

• The Impact: This policy rewards assets with high growth potential. In a “low-growth” established suburb, inflation can swallow your gains. However, in a high-growth corridor like Lancelin South, the potential for capital appreciation to significantly outpace CPI makes it a superior vehicle for wealth preservation. Investing in a new home build also gives you the freedom to choose what CGT calculation method works best for you.

 

 

Negative Gearing: Incentivising New Supply

Perhaps the most discussed reform is the tightening of Negative Gearing. The Budget indicates a pivot toward restricting interest deductibility on established dwellings while maintaining full incentives for newly constructed homes.  

This creates a “two-tier” market. Investors who choose new-build properties with VIMG remain the primary beneficiaries of tax support, while those buying older housing stock after Tuesday’s budget announcement will see their after-tax returns diminished. Consequently, we can expect a significant redirect of investor capital toward off-the-plan and newly built developments as buyers move to preserve their tax advantages. Ultimately, this policy shift is designed to force private investment to directly fund the national housing supply, fundamentally altering the calculus for Australian property investors.

Feature	Lancelin South (New Build)	Existing Housing Stock
Negative Gearing	✅ Yes	❌ No
CGT Calculation	✅ You Choose	❌ 30% Minimum
Infrastructure Funding	✅ Available	❌ None
Holding Cost	✅ Lower	❌ Higher

 

Trust Fund Taxation: Additionally, the Budget has tightened the screws on Discretionary Trusts, introducing a minimum 30% tax, in-line with changes to Capital Gains. New reporting requirements and shifts in how beneficiary income is taxed mean that streamlined, high-yield assets—like brand-new vacant land packages—are becoming the preferred choice for family-office and trust-based portfolios, due to their cleaner cost-bases.  

 

Summary 

The 2026 Federal Budget is pro-supply and encourages investing in new builds. By aligning your next purchase with this new framework, you are investing in an asset class that is actively supported by the Australian tax policy structure.

Whether you are looking to land-bank for long-term growth or find the perfect site for your next home-and-land package, Lancelin South offers the most robust investment option in response to these new fiscal policies.

At VIMG, we pride ourselves on building in the corridors of the future. The 2026 Budget has simply confirmed what we already knew: the greatest opportunities lie in the next generation of Australian housing.

Don’t wait for the market to adjust. Browse our latest release and secure your preferred lot via OpenLot.

 

Sources

• Treasury of the Australian Government (2026). “Budget Paper No. 1 – Budget Strategy and Outlook”

• 7News (May 2026). “Albanese Government unveils $2b housing infrastructure push to unlock 65,000 homes.”

• Australian Broker News (May 2026). “Budget 2026–27: Tax shake-up and $2b housing push.”

• VIMG (2026). “Lancelin South Project Data.”