The 2026–27 Federal Budget has placed property tax back at the centre of residential decision-making. Proposed changes to negative gearing, capital gains tax and discretionary trusts may influence how some owners and investors think about established homes, new builds, renovations and long-term property strategy.
This article is not tax, financial or legal advice. Instead, it looks at what these changes may mean from a project-feasibility perspective — and why clear early decisions matter before committing to a residential build, renovation or development pathway.
What has changed?
The Federal Budget proposes changes across three areas that may be relevant to property owners and investors:
- Negative gearing: proposed limits would direct negative gearing benefits toward new residential properties, with existing arrangements grandfathered for properties held before Budget night.
- Capital gains tax: proposed reforms would replace the 50% CGT discount with cost-base indexation for assets held for more than 12 months, alongside a minimum tax on net capital gains.
- Discretionary trusts: proposed rules would introduce a 30% minimum tax on discretionary trusts from 1 July 2028, with some exceptions and transitional relief.
These measures remain politically contested, and future governments may amend, repeal or replace them. The important point for property owners is that tax settings can materially affect the timing and structure of residential decisions.
Why new builds may receive more attention
If tax settings increasingly favour new housing supply over established investment properties, more owners may consider whether an existing site is better held, improved, redeveloped or replaced with a new custom home.
That does not mean every site should become a new build. It means the early feasibility process becomes more important. Before design momentum builds, owners should understand the site, planning pathway, likely scope, construction complexity, indicative cost range and long-term use of the property.
Renovation, rebuild or hold?
For established properties, the right decision may still be a renovation or extension. In other cases, a knockdown rebuild may provide a stronger long-term outcome. The answer depends on the condition of the existing home, planning controls, site orientation, structural considerations, access, budget, intended use and the long-term value of the completed property.
A feasibility review can help clarify whether the existing building is worth working with, or whether a new-build pathway would better support the owner's objectives.
Trusts, structures and timing
Many property owners use family trusts, companies or other structures as part of broader estate, investment or asset-planning strategies. The proposed tax changes may make it more important to seek advice before acquiring, developing or restructuring property interests.
Wednesday Projects does not provide tax, legal or financial advice. However, we can help clients understand the project implications of timing, scope, design, approvals and delivery pathway, working alongside their accountant, solicitor or financial adviser where required.
What a good feasibility process should clarify
Before committing to a major residential project, a feasibility process should help clarify:
- What the site can reasonably support
- Whether renovation, extension or rebuild is the stronger pathway
- Likely planning considerations and approval risks
- Indicative project cost range
- Major cost drivers and scope decisions
- Design and documentation pathway
- Likely consultant input required
- Programme and sequencing considerations
- How the project supports long-term value
How Wednesday Projects helps
Wednesday Projects supports clients through early project strategy, feasibility, design direction, consultant coordination, approvals, scope definition and delivery planning.
For owners considering a custom home, renovation, knockdown rebuild or residential development, the aim is to move from uncertainty to a clear pathway — one that balances design ambition, buildability, cost, timing and long-term value.