The key message from Australia's budget: Funds are flowing into "new supply."
Australia's 2026-27 Federal Budget sends a clear signal to the property market: the government doesn't just want to suppress house prices, but rather aims to channel funds, tax incentives, and overseas demand into projects that genuinely increase housing supply. For Queensland developers, this means the market focus will shift from simply buying and selling existing homes to land consolidation, infrastructure development, approval speed, and the delivery of new builds. The federal government's budget includes a A$2 billion (A$2.0 billion) housing support program – the Local Infrastructure Fund – to support local governments and territories through state and territory governments and utilities in accelerating infrastructure development needed to "unlock" housing, such as roads, water, sewage, and electricity. It also requires state governments to expedite approvals, release buildable land, and promote the standardization of building codes nationwide.
This is particularly important for Queensland. The Queensland government has already established a AU$2 billion Residential Activation Fund to expedite critical infrastructure development, including water, stormwater, roads, sewage, electricity, and communications. Nearly AU$994 million has already been approved to unlock residential land in existing infill areas and new greenfields. For developers, the most valuable projects in the future may not simply be those with "good locations," but rather those near infrastructure exits, those that can receive expedited approvals, and those that can meet government requirements to release housing supply.
The first impact: Queensland land values will place greater emphasis on "developability".
From ANP's perspective, the most direct impact of the budget on Queensland developers is that the market will place greater emphasis on land development readiness. In the past, many overseas buyers tended to focus on location, rental returns, or population growth when looking at Australian properties; however, for developers, what truly determines the speed of a project is infrastructure capacity, zoning, water and electricity connections, road capacity, and the pace of local government approvals.
The Federal Local Infrastructure Fund and the Queensland Residential Activation Fund work in tandem: the federal government provides policy and funding guidance, while the Queensland government transforms previously undeveloped land into developable residential supply through specific infrastructure projects. This means that Hong Kong and Taiwanese investors evaluating Queensland projects should not only ask "Are there any new developments nearby?", but should further inquire: Has this area benefited from infrastructure funding? Are roads, water, sewage, and electricity capacity adequate? Does the project have a relatively short development cycle?
The second impact: Newly built homes will receive more policy support than existing homes.
The budget also amends the negative gearing and capital gains tax (CGT) arrangements. According to the budget document, starting July 1, 2027, negative gearing for residential properties will be limited to newly built homes; for existing residential properties purchased after 7:30 p.m. on May 12, 2026, any losses incurred will no longer be able to be directly used to offset salaries or other non-property income, but can only be used to offset residential rental income or residential capital gains, and unused losses can be carried forward to future years.
Meanwhile, investors purchasing eligible new residential properties can still choose between the 50% Capital Gains Tax Discount (CGT discount) and the cost-based indexation plus the 30% minimum tax rate, thus maintaining an incentive for new housing supply. This is a clear benefit for Queensland developers: the policy is not a blanket crackdown on property investment, but rather a shift from the secondary market to new supply. For customers in Hong Kong and Taiwan, this also means that newly built townhouses, apartments, house-and-land packages, and some medium-density housing may be more in line with future tax and policy directions.
The third impact: Overseas buyers will be further directed towards the new housing market.
The budget also extended the temporary ban on foreign purchases of established dwellings. Originally scheduled for two years from April 1, 2025, the ban has been extended to June 30, 2029. Existing limited exceptions and general exemptions will remain, including those applicable to permanent residents and New Zealand citizens. The government stated that this move aims to prioritize Australian residents in purchasing existing homes that might otherwise be bought by foreign buyers, while also encouraging foreign investment in projects that increase housing supply.
This is particularly crucial for buyers from Hong Kong and Taiwan. If the buyer is still a foreign person, access to the Australian resale housing market is generally more restricted; conversely, new homes, projects under development, and projects that increase housing supply are more likely to be accepted by policy. For Queensland developers, this means that when targeting overseas markets, they shouldn't simply be selling "Australian properties," but should clearly explain how the project constitutes new supply, whether it complies with the Foreign Investment Review Board (FIRB) pathway, and how the buyer's identity, visa status, and ownership structure affect purchase feasibility.
The fourth impact: Developers need to repackage their products, rather than just relying on appreciation stories.
This budget's direction places higher demands on developers' sales language. In the past, when introducing Australian properties to clients in Hong Kong and Taiwan, common phrases included "population growth, rising rents, and land scarcity." These remain important, but are no longer sufficient. The new market requires explaining three things: first, whether the project truly increases housing supply; second, whether the project benefits from infrastructure or planning trends; and third, whether the buyer's post-purchase tax, FIRB, and holding strategies are reasonable.
For example, a Queensland project located in a growth corridor but lacking sufficient infrastructure support may not be able to quickly become a deliverable. Conversely, an area with existing funding, close to road upgrades, water capacity expansions, or municipal infrastructure improvements, even if not currently in a traditionally popular city center, may be more aligned with future development logic. ANP advises clients in Hong Kong and Taiwan not to judge a project solely by its current popularity, but rather to consider whether government funding is driving future population and housing supply to the area.
The fifth impact: Commercial properties and mixed-use projects need to be assessed separately.
It is important to note that the negative gearing reform primarily targets residential properties. Professional tax analysis indicates that commercial properties and other asset classes such as stocks are not directly applicable to this residential negative gearing reform. Meanwhile, private investors who hold widely held trusts, superannuation funds, build-to-rent projects, and support government housing schemes also have varying degrees of exclusion or exemption arrangements; however, details still await confirmation from the draft legislation and formal legislation.
Therefore, for Queensland developers, residential, commercial, mixed-use development, and build-to-rent projects cannot be treated the same. If the target customers are Hong Kong and Taiwanese families, the policy logic for new residential projects is more straightforward; if the target customers are family offices, corporate investors, or high-net-worth clients, it may be necessary to redesign the investment framework from the perspectives of commercial real estate, land development, build-to-rent, or joint venture development.
ANP's view: The budget is not simply about suppressing the property market, but rather about reallocating funding.
From the perspective of Queensland developers, the real significance of this budget is not that the Australian government does not welcome property investment, but rather that the government hopes investment funds will flow to projects that can increase housing supply, improve infrastructure efficiency, and enhance urban carrying capacity. In other words, the market will place greater emphasis on "growth that can be supported by government policies" rather than simply chasing short-term house price increases.
For clients in Hong Kong and Taiwan, this is also a time to re-evaluate Australian property investment. Buying Australian property shouldn't be limited to property descriptions or rental yield tables; it requires simultaneous analysis of the Federal Budget, state infrastructure, local planning, FIRB regulations, tax structure, and development cycle. Especially in Queensland, where population growth and infrastructure pressures coexist, projects with true medium- to long-term value are often located in areas where the government is investing in infrastructure, land is readily available, and supply is readily available.
Three practical suggestions
First, a new distinction needs to be made between "existing homes" and "new housing supply." If the buyer is still a foreign national, and the restrictions on existing homes are extended to June 30, 2029, new housing projects and projects that increase housing supply will be more worthy of priority study.
Secondly, investing in Queensland shouldn't be based solely on names like Brisbane, Gold Coast, or Sunshine Coast. Instead, it's crucial to assess whether specific areas have access to infrastructure funding, planning upgrades, and housing supply policies. The Queensland Housing Start-up Fund explicitly focuses on infrastructure such as water, stormwater drainage, roads, sewage, electricity, and communications—these are the fundamental conditions for land development.
Third, due diligence on the property, tax, and legal aspects must be conducted simultaneously before signing a contract. This is especially important for cases involving FIRB, trust holdings, company ownership, building and leasing projects, or joint ventures; judgment should not be based solely on sales documents. The budget's direction is clear: the future Australian property market will favor new supply, place greater emphasis on compliance structures, and test whether investors truly understand the policies.
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