The 2026–27 Federal Budget marks an important milestone in Australia’s housing debate, with the Commonwealth committing to long-awaited reforms to negative gearing and capital gains tax concessions. Shelter NSW, and more broadly the Shelter network, have long advocated for sensible housing taxation reforms to level the playing field where it comes to home ownership. While these measures alone will not solve the housing crisis, they represent a sensible and overdue step towards taking some heat out of the residential property market and make it fairer for first home buyers. 

For decades, housing tax settings have disproportionately favoured investors, contributing to growing competition for existing homes and making it harder for many Australians to enter home ownership (or secure housing full stop). These reforms begin to address this imbalance by better targeting tax concessions and reducing incentives that have fuelled speculative investment. Importantly, negative gearing is now restricted to new dwellings, meaning that the tax concession is now directly tied to delivery of new housing supply. Time will tell if it yields enough benefits in supporting this much needed new supply. 

National Shelter has welcomed the changes as an important structural reform that can help improve housing affordability over time, while creating a fairer tax system. Shelter NSW acknowledges the significant advocacy effort of National Shelter and the many housing, homelessness and social policy organisations – including our own – that have consistently argued for evidence-based housing tax reform. 

Importantly, these reforms are not an end point. Australia continues to face severe shortages of social and affordable housing, rising rents, and growing homelessness. Tax reform must sit alongside sustained investment in social housing, stronger renter protections and broader housing supply measures. 

The proposed changes to negative gearing and capital gains tax concessions will require supporting legislation to pass Parliament. Shelter NSW urges all parties and crossbenchers to support these reforms and ensure they are implemented without unnecessary delay. We also urge the Australian Government to consider investing the revenue previously foregone into tax breaks in social housing, for example through expanding the Housing Australia Future Fund (HAFF). 

Housing affordability challenges have been decades in the making, and there are no quick fixes. But meaningful reform requires governments to be willing to tackle difficult structural issues. This Budget takes a modest but significant step in that direction.