Labor vs Coalition Property Policy 2026: Every Housing Reform Compared
Housing is the defining political battleground heading into the next federal election. With median prices in Sydney and Melbourne above $1 million, rental vacancy rates near record lows, and construction activity struggling to meet the 1.2 million home target, both major parties have staked their credibility on housing reform.
This guide compares every known Labor and Coalition position on property policy heading into 2026, from negative gearing and CGT to foreign investment rules, shared equity schemes, and supply-side reforms. Use it to understand what an election outcome could mean for your investment strategy.
At a Glance: Key Policy Differences
Labor was re-elected in May 2025 and is the incumbent in this article. The table below reflects positions taken at the May 2025 election and subsequent 2025-26 positions.
| Policy Area | Labor (Incumbent) | Coalition (Opposition) | |---|---|---| | Negative gearing | Not currently proposing changes; Treasury modelling continues | Preserve current rules | | CGT 50% discount | Under active review; Senate Select Committee reported March 2026 | Preserve current rules | | Help to Buy shared equity | Launched December 2025, 10,000 places per year | Voted against the legislation | | Super for housing | Opposed (FHSSS only) | Up to $50,000 super withdrawal for first home (Super Home Buyer) | | FHB Mortgage Deductibility | N/A | Tax deduction on interest for first $650k of new-build mortgage | | Foreign buyer ban | 2-year ban on established homes (April 2025 to March 2027) | Supports ban, has signalled making it permanent | | Net overseas migration | Forecast ~260k in 2025-26, ~230k from 2026-27 | Proposed deeper reductions | | Housing Accord / build targets | 1.2M homes by mid-2029 (tracking behind) | $5B Housing Infrastructure Program, 500k-home target | | Dedicated FHB build program | $10B for 100,000 new homes exclusively for first home buyers over 8 years | Not proposed | | First Home Guarantee (5%) | Income caps removed for 2026 | Retain and potentially expand | | International student cap | 295,000 new enrolments 2026 (up from 270k) | Proposed tighter caps | | Build-to-rent | 15% MIT rate, 4% depreciation (from Jul 2024) | Broadly supports BTR |
1. Negative Gearing
Labor: Has not formally announced reform but has commissioned Treasury modelling on negative gearing changes. The Prime Minister has repeatedly declined to rule out changes. Options under review include restricting negative gearing to new builds only (Labor's 2019 policy), a cap on the number of properties, or a dollar cap on deductible losses.
Coalition: Firm commitment to preserve negative gearing in its current form. Leader has publicly described it as essential to rental supply.
For a full analysis of the reform scenarios and dollar impact, see our guide on negative gearing changes 2026.
2. Capital Gains Tax Discount
Labor: Similar review posture to negative gearing. The 2019 policy (a 25% discount for newly acquired assets) remains in the policy wardrobe. Any reform would likely include grandfathering for existing assets.
Coalition: Preserve the 50% discount. Opposition Treasury spokespeople have argued that reducing it would depress investment, slow construction, and ultimately raise rents.
See our detailed modelling in CGT discount reduction Australia 2026.
3. First Home Buyer Shared Equity and Related Demand-Side Schemes
Labor (Help to Buy): Federal shared equity program launched December 2025. Government contributes up to 40% equity for new builds (30% for existing) in exchange for a proportional share of the capital gain on sale. Income caps $100k singles, $160k couples/single parents. Capital city price caps from $700k (Darwin/Hobart/Adelaide) to $1,300,000 (Sydney). 10,000 places available per financial year.
Coalition (Super Home Buyer Scheme): Allows first home buyers to withdraw up to $50,000 from superannuation to fund a deposit. Any withdrawn amount plus a proportional share of the capital gain on sale must be repaid to super at the time of sale.
Coalition (First Home Buyer Mortgage Deductibility Scheme): Tax deduction on the mortgage interest paid on the first $650,000 of a mortgage for a newly built home, for first home buyers, over five years. A novel demand-side subsidy designed to stimulate new construction rather than bid on existing stock.
All three schemes have material trade-offs. Shared equity reduces upfront capital requirements but caps future capital gain. Super withdrawal accelerates home ownership but reduces retirement balances. Mortgage deductibility effectively subsidises repayments but is capped to newly built dwellings only.
4. Foreign Investor Rules
Labor: Introduced a two-year ban on foreign purchases of established dwellings (April 2025 to March 2027), with enforcement funding for the ATO to detect breaches. Tripled FIRB application fees for foreign buyers.
Coalition: Supports the ban and has indicated an intention to make it permanent. Also proposes tougher penalties and a national foreign ownership register.
Both parties are aligned on the direction of travel. For a detailed breakdown of current rules, see our property due diligence checklist.
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Labor: The federal Population Statement forecasts net overseas migration of approximately 260,000 in 2025-26, falling to 230,000 from 2026-27. International student commencements are capped at 295,000 for 2026 (up from 270,000 in 2025) combined with stricter visa integrity testing. Permanent migration program stays at 185,000 places.
Coalition: Proposes deeper cuts in migration, arguing high migration numbers are a primary driver of housing demand pressure and rental shortages. Specific numbers announced at the 2025 election were lower than Labor's forecasts.
Migration settings flow directly through to rental vacancy rates and capital city price pressure. Lower migration reduces rental demand growth but also reduces the consumer base and labour supply for construction.
6. Housing Supply (1.2 Million Homes Accord)
Labor: Retains the 1.2 million new homes target by mid-2029. Progress is currently tracking around 30% below the required run rate. $3.5 billion in incentive payments to states and local governments for hitting targets. Expanded Commonwealth Rental Assistance.
Coalition: Criticises the Accord as a failed target and has proposed replacement measures focused on planning reform, infrastructure charges, and productivity incentives rather than a national build target.
Neither party has a credible plan to meaningfully accelerate construction given current builder insolvencies, material costs, and skilled labour shortages. For investors, this means rental supply will remain tight regardless of who wins, supporting rents and yields.
7. Build-to-Rent Incentives
Labor: Enabled the 15% managed investment trust (MIT) withholding tax rate (down from 30%) and 4% depreciation rate for eligible build-to-rent developments from 1 July 2024. Designed to catalyse institutional investment in rental housing.
Coalition: Broadly supportive of build-to-rent but has signalled openness to tightening concessions if affordability targets are not met.
8. First Home Guarantee and Related Schemes
Labor: Expanded the First Home Guarantee, Regional First Home Guarantee, and Family Home Guarantee with higher property price caps in capital cities. Removed income caps on Help to Buy for 2026.
Coalition: Supports all three schemes and has proposed lifting caps further. Would likely combine them with the Super Home Buyer Scheme as a stacked package.
See our first home buyer guide Australia 2026 for the current scheme details.
9. State-Level Positions Worth Noting
Federal policy is only half the picture. Key state-level differences investors should track:
- Victoria: Vacant Residential Land Tax, 7.5% short-stay levy, ongoing land tax increases. Premier has ruled out major reversals.
- NSW: Low and Mid-Rise Housing reforms, Transport Oriented Development zoning, tightened short-term rental rules.
- Queensland: LNP state government focused on Olympic infrastructure and planning reform. Softened rental caps.
- Western Australia: State Labor focused on construction worker attraction, incentives for builders, and Perth Metronet.
How Election Outcomes Would Affect Investors
Labor retains government: Moderate-probability scenario for material negative gearing and CGT reform, with grandfathering for existing assets. Expansion of shared equity and social housing. Continued tight migration and foreign investor controls. Rental demand remains firm due to supply constraints.
Coalition wins government: Negative gearing and CGT rules unchanged. Super Home Buyer Scheme adds first-home demand pressure. Deeper migration cuts ease rental pressure over time but may hit construction labour. State-level reforms continue unaffected by federal changes.
Hung parliament or minority government: Most likely to stall major reform. Policy limbo benefits investors with existing portfolios but creates uncertainty for new buyers.
What Investors Should Do Now
Regardless of the electoral outcome, the underlying fundamentals that drive property returns (supply, population, wages, interest rates) remain broadly unchanged in 2026. The policy layer changes after-tax returns but rarely changes the direction of the market.
Buy on fundamentals, not tax concessions. Any property that only works because of negative gearing or the CGT discount is structurally fragile.
Favour resilient cash flow. Positive cash flow properties are less exposed to policy risk than highly negatively geared holdings.
Model post-reform returns. Use our cashflow forecasting guide to stress-test acquisitions at reduced CGT discounts and capped negative gearing deductions.
Diversify across market segments. Houses, units, regional, and interstate exposure each react differently to policy changes. Concentration in one segment amplifies policy risk.
Bottom Line
Labor and Coalition property policies differ most on investor tax concessions (negative gearing, CGT) and on first home buyer scheme design (shared equity vs super withdrawal). They broadly agree on foreign investor restrictions, supply-side ambitions, and tightening migration.
For investors, the most important variable is your own due diligence. Well-chosen properties in well-researched markets perform under any government. Use PropBuyAI's AI-powered analysis to model every major scenario before committing. Explore our pricing to get started.