While much of the national conversation has focused on negative gearing and capital gains tax changes, the reality for Perth property may be more nuanced than the headlines suggest. Rather than treating property as one broad investment category, the proposed reforms draw a sharper distinction between established residential property, new housing supply and commercial assets.
For Perth, where affordability pressures, population growth and limited supply continue to shape the market, the implications may be more measured than many national forecasts suggest.
In collaboration with Cooper Partners who have provided detailed tax analysis and practical modelling, Realmark has unpacked the proposed Federal Budget 2026 property reforms and what they could mean across residential sales, property management and commercial real estate in Perth.
For the full Cooper Partners Federal Budget Analysis - Property Focus Newsletter, click here
Residential sales: Supply still drives the market
The proposed changes place established residential property directly in focus. From 1 July 2027, investors purchasing established residential property after Budget night would no longer be able to offset rental losses against salary or business income, with losses instead quarantined against future rental income or capital gains. Existing investment properties held before the announcement would remain grandfathered under current rules.
At the same time, new residential builds retain full negative gearing benefits and more favourable CGT treatment, reinforcing the Government’s push toward supply creation.
Clayton Foster, Executive Residential Director of Realmark Urban, said Perth’s market continues to be shaped more by supply and demand fundamentals than tax headlines.
“Perth’s property market has developed a habit of proving negative forecasts wrong. In 2023, rising interest rates were expected to trigger major price declines, yet values rebounded because the underlying imbalance between supply, affordability and demand never really disappeared.
“The Federal Budget reforms may change investor behaviour at the margins, particularly around established housing, but they don’t solve the bigger structural issue of housing supply. The reality is markets like Perth tend to respond more to supply shortages and population growth than tax headlines alone. Investors will become more selective, but well-positioned property in constrained markets is still likely to remain highly competitive.”
Tax Insight:
The Cooper Partners Budget Analysis also notes the market is effectively being divided into three categories: grandfathered established property, post-Budget established property and new residential builds.
Property management: Rental supply remains under pressure
While investor tax settings dominate the discussion, Perth’s rental market continues to face ongoing supply pressure. The Budget is designed to encourage new housing delivery, but construction costs, labour shortages and planning delays remain significant barriers to increasing stock levels.
Edward Brine, Director of Property Management at Realmark Urban, said investor confidence remains critical to maintaining healthy rental supply.
“Any policy change that affects investor confidence ultimately flows through to rental supply and rent prices. That’s where the market will be watching closely. Perth’s rental market is already operating with limited margin for additional pressure. The proposed changes probably won’t create an immediate shift, particularly for existing investors, but they do reinforce how important long-term investment confidence remains key to maintaining healthy rental supply.”
Tax Insight:
The Cooper Partners Budget Analysis also highlights that the proposed negative gearing changes are more about delaying deductions than removing them entirely, which may place greater pressure on investor cash flow during the holding period.
Commercial property: A potential shift in investor focus
Commercial property sits outside the proposed negative gearing restrictions, immediately separating it from established residential investment under the new framework. However, commercial assets are still affected by the broader proposed CGT overhaul from 1 July 2027 where properties are held by individuals, partnerships or trusts. Rob Dawson, Commercial Sales and Leasing Director at Realmark Commercial, said the reforms may influence how investors approach diversification and long-term portfolio strategy.
“The Budget draws a much sharper line between residential and commercial property investment, and that will influence where capital flows next. There’s potential for commercial property to become more attractive relative to established residential stock, particularly for investors focused on income, diversification, and longer-term stability. But tax settings alone don’t drive markets. Occupier demand, asset quality and the strength of underlying fundamentals will continue to matter most.”
Tax Insight
The Cooper Partners Budget Analysis provides detailed worked examples and modelling that compare current and proposed tax outcomes, demonstrating that the taxable capital gain under the proposed rules is higher than under the existing CGT discount in this scenario. This reflects the shift from a 50% discount to an inflation-adjusted methodology, which can result in larger taxable gains where asset values increase faster than inflation.
The broader message
Across all sectors, the broader message of the Budget is less about immediate disruption and more about long-term repositioning.
Realmark Managing Director and Founder John Percudani said while the proposed reforms may influence investor behaviour, supply remains the defining issue for Western Australia’s property market.
“Regardless of the tax changes, it is all about supply - and these changes will likely be slow to have any significant impact on supply in WA in the short term. The changes also impact buyer sentiment; however, this will reset quickly as fundamental housing demand remains. Investors will shift to new build, though it will take time to impact the market.”
For Perth property, where demand fundamentals continue to remain strong in many areas, the market is unlikely to be shaped by tax policy alone. But the reforms do reinforce one thing clearly: investment strategy, ownership structure and asset selection are becoming more important than ever.