For Alyssa Shaw, the Australian dream of stability has been a series of packing boxes and rental agreements. In the last 15 years, the 36-year-old has moved house 25 times—an average of once every nine months. Despite working since she was 14, Shaw finds herself in a precarious cycle of tenure that has become a defining characteristic for a growing class of Australians: the “forever renters.”
The federal budget’s housing measures announced on Tuesday attempt to break this cycle by targeting the tax advantages that have long incentivized property investment over home ownership. By altering the landscape for negative gearing and capital gains tax, the Albanese government aims to dampen investor demand and open the door for those currently locked out of the market.
However, for renters like Shaw, who has seen her rent climb by 44% over five years while her income remained stagnant, the reforms feel like a distant remedy. While the government projects these changes will help an extra 75,000 Australians transition into home ownership over the next decade, a critical gap remains for those whose incomes make a deposit—and the subsequent mortgage—an impossible milestone.
The mechanics of the tax reforms
The centerpieces of the budget are significant shifts to property tax concessions designed to reduce the competitive advantage held by investors. Under the new rules, investment properties purchased after 7:30 pm on budget night will no longer be eligible for negative gearing starting 1 July 2027. Simultaneously, the 50% capital gains tax (CGT) discount will be replaced for these new acquisitions.
To prevent a market shock, the government has grandfathered existing investments. Properties bought before 12 May 2026 will remain under the old tax regime, though Treasury expects the benefits for these existing investors to naturally diminish over approximately ten years.
| Feature | Properties Bought Before May 12, 2026 | Properties Bought After Budget Night |
|---|---|---|
| Negative Gearing | Maintained (Grandfathered) | Removed from 1 July 2027 |
| CGT Discount | 50% Discount Applies | Discount Replaced from 1 July 2027 |
| Primary Goal | Market Stability | Lower Investor Demand |
Treasury modelling suggests these measures will slow the growth of property prices by approximately 2% over the next two years. The government argues this will create a more level playing field for first-home buyers, though the immediate impact on the rental market is expected to be marginal, with an estimated increase of just $2 per week for households paying the median rent.
The ‘forever renter’ dilemma
While the policy targets the structural drivers of price inflation, it offers little immediate relief to those in lower economic demographics. Koushalya Pereiaslov, a 26-year-old support worker for NDIS participants, describes the dream of home ownership as something she has chased since childhood, yet finds unattainable in the current climate.
Pereiaslov, who moved to New South Wales’ northern rivers after being priced out of the Gold Coast, spends up to half of her pay on rent. For her, the ability to save for a deposit is non-existent when the cost of living consumes the majority of her earnings. She notes that the struggle is even more acute for single mothers in her community, some of whom are forced to relocate frequently because they cannot keep up with rising rents.
This sentiment is echoed by Prof Wendy Stone, a housing expert at Swinburne University. While she acknowledges the budget takes “some bold first steps” toward addressing structural inequality, she warns that for long-term renters, the fundamental picture remains unchanged.
Political friction and the path forward
The reforms have sparked a sharp divide across the political spectrum. The Coalition has vowed to repeal the changes to negative gearing and the CGT discount should they return to government, arguing that such moves could destabilize the rental supply. Conversely, the Greens argue the measures do not go far enough, claiming that by grandfathering existing properties, the government is entrenching inequality by protecting the tax breaks of multi-property owners.
For those like Alyssa Shaw, the solution lies not in tax tweaks for buyers, but in protections for tenants. Shaw suggests that governments should prioritize rental caps to prevent the aggressive price hikes that erode the ability of working-class people to save or even maintain a stable residence.
The tension highlights a core conflict in Australian housing policy: the difference between helping someone become a homeowner and protecting someone who may never be one. While the budget aims to increase the number of owners, it leaves the “forever renter” to navigate a market where stability is often a luxury.
Disclaimer: This article provides a summary of budget measures and personal testimonies for informational purposes and does not constitute financial or legal advice.
The next critical checkpoint for these measures will be the legislative process in Parliament, where the government must secure passage for the tax reforms ahead of the 2026 and 2027 implementation dates.
Do you think these measures will make home ownership more attainable, or is the gap too wide to bridge? Share your thoughts in the comments below.
