The Federal Government’s 2026 Budget has introduced some of the most significant property tax changes seen in years, particularly around negative gearing and capital gains tax (CGT).

While headlines have focused heavily on tax reform, the bigger picture for the South East Queensland property market may not be changing as dramatically as many expect.

At Investeps, we believe the key issue driving Brisbane and SEQ property prices remains unchanged: demand continues to outpace supply, and these reforms do little to address the underlying housing shortage.

For long-term property investors, this distinction matters.

What Has Changed?

The proposed reforms include:

• Negative gearing limited to new builds from July 2027.
• Changes to the capital gains tax discount structure.
• New tax treatment for discretionary trusts.
• Existing investment properties will retain their current negative gearing treatment under grandfathering provisions. 

These changes are expected to influence investor behaviour across Australia, particularly in how investors structure purchases and approach long-term portfolio planning.

However, it’s important to understand that these are primarily demand-side policy changes rather than supply-side solutions. The underlying issue (strong population growth combined with a shortage of new housing supply) has not been addressed.

As a result, South East Queensland’s underlying market fundamentals remain strong, with housing demand still expected to outpace new construction in many areas. This is likely to continue supporting property values and rental growth across the region.

What Qualifies as a “New Build”?

While further clarification is still expected, current guidance suggests eligible new builds may include:

• Newly constructed apartments purchased off-the-plan.
• Residential construction on previously vacant land.
• Newly built duplexes that increase the overall housing supply.

By contrast, renovations or extensions to existing homes are generally not expected to qualify under the proposed framework.

As always, investors should seek independent accounting advice to understand how the proposed changes may apply to their specific circumstances.

Why South East Queensland Fundamentals Remain Strong‍

The Brisbane property market and broader South East Queensland real estate market continue to be supported by several long-term drivers.

Population growth continues to accelerate

Queensland continues to benefit from strong population growth, driven by both interstate migration and overseas migration, particularly across Brisbane, the Sunshine Coast and the Gold Coast.

This population growth is contributing to sustained housing demand that continues to outpace the supply of new homes, particularly in established suburbs across South East Queensland.

Housing supply remains constrained

While government policy is attempting to influence investor demand, the core issue remains that housing construction has not kept pace with population growth.

Building costs, labour shortages, infrastructure constraints and planning delays continue to impact the delivery of new housing stock across SEQ.

This imbalance between supply and demand is one of the key reasons many investors still see Brisbane investment property as a long-term growth opportunity.

Established suburbs may become more tightly held

One likely outcome of the budget changes is that existing investors may become less willing to sell established investment properties.

With many current owners retaining grandfathered tax benefits, holding quality assets long term may become even more attractive.

This could further tighten supply in established Brisbane suburbs, particularly those already experiencing strong owner-occupier demand and limited housing stock.

How Investor Behaviour Could Change

One of the biggest shifts may be how investors approach holding periods and overall property investment strategy.

The proposed CGT changes could encourage investors to move away from short-term “hotspot” investing and place greater focus on long-term ownership of quality assets in established growth areas.

This already aligns with how experienced property investors approach buying property in Brisbane, focusing on high-quality growth areas and long-term ownership rather than short-term speculation. 

The changes to negative gearing may also lead investors to think more carefully about ownership structures from their very first purchase.

Many investors who are already purchasing through company or trust structures may see minimal impact to their broader strategy, particularly those who have always focused on long-term acquisition and portfolio planning. However, some investors may begin reassessing whether company structures become more effective moving forward, depending on individual circumstances.

Increased Focus on Yield and Cash Flow

Another likely outcome is increased focus on yield-sensitive investment strategies.

Some investors may begin looking more closely at:

• Duplex investments.
• Granny flat opportunities.
• Rooming accommodation.
• Higher-yielding investment properties.

These types of assets may become increasingly attractive under the new framework, particularly for investors focused on stronger cash flow performance.

However, many of these property types also require higher upfront capital or more active management, making careful due diligence even more important.

What Could Happen Next?‍

In the short term, we may see increased transaction activity across the Brisbane real estate market as investors adjust strategies ahead of the reforms taking full effect.

Some investors nearing retirement may also choose to bring forward selling decisions over the next 12 months.

If these properties are purchased by owner-occupiers rather than investors, this could remove additional rental stock from the market and place further upward pressure on rents across established Brisbane suburbs.

While some analysts expect growth to cool temporarily as the market absorbs these changes, many of the underlying drivers supporting South East Queensland remain firmly in place.

Brisbane continues to benefit from:

• Strong interstate migration.
• Infrastructure investment.
• Tight rental markets.
• Limited housing supply.
• Olympic-related development.
• Lifestyle-driven demand.

These are structural drivers, not short-term policy reactions.

That’s why many experienced investors still expect South East Queensland to outperform a number of other Australian property markets over the medium to long term.

What This Means for Brisbane Property Investors‍

For investors, these reforms reinforce the importance of having a clear long-term strategy.

Rather than chasing short-term market movements, many buyers are now placing greater importance on:

• Asset quality.
• Long-term capital growth potential.
• Rental demand.
• Investment structure.
• Yield sustainability.
• Buying in tightly held areas with constrained supply.

This is where local market knowledge becomes increasingly valuable.

Final Thoughts

The 2026 Budget changes will likely reshape investor behaviour across Australia over the coming years.

But in the Brisbane property market and across South East Queensland, the core issue remains unchanged: population growth continues to outpace housing supply.

While demand-side policy changes may influence how investors buy and hold property, they do not solve the underlying shortage of homes across Brisbane and SEQ.

For long-term investors focused on quality assets in established growth areas, the broader fundamentals supporting the region remain firmly in place.

At Investeps, our Brisbane-based team combines buyer’s agency expertise with valuation-led analysis to help investors assess opportunities based on long-term fundamentals rather than market noise.

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Whether you’re reviewing your current portfolio or planning your next acquisition, understanding the broader market drivers behind these reforms is critical to making informed decisions.

‍If you’d like to discuss how these changes may impact your property strategy or next purchase, get in touch with the Investeps team for a conversation.