When the tax settings around investment property come under review, investors do what investors always do — they look for the next best place to put their capital. In 2026, a growing number of Australians are looking at the share market.

This isn't about abandoning property. It's about recognising that a single asset class is no longer the only sensible answer, especially when holding costs rise. Here's why shares, exchange-traded funds (ETFs) and managed funds are getting a fresh look — alongside the changes we covered in the 2026–27 Federal Budget and your investment property.

What shares offer that a rental can't

  • Liquidity. You can sell part of a share portfolio in minutes. Selling part of a house is impossible — it's all or nothing, with weeks of settlement.
  • Lower entry cost. You can start with a few hundred dollars and a brokerage account, instead of a deposit, stamp duty and lenders' mortgage insurance.
  • Built-in diversification. One ETF can hold hundreds of companies across sectors and countries — instant spread of risk.
  • Franking credits. Many Australian shares pay franked dividends, which can be tax-effective for income-focused investors.
  • No tenants, no maintenance. No 11pm calls about a broken hot-water system.

The trade-offs to go in with eyes open

Shares aren't a free lunch. Prices move daily and can fall sharply in a downturn, which tests the nerves of investors used to a quarterly property valuation they never actually see. You also can't borrow against shares as easily or as cheaply as property, so the leverage that supercharges property returns is harder to replicate.

The investors who do best aren't the ones who pick the "winning" asset class — they're the ones who match their investments to their time horizon, risk tolerance and goals.

It's rarely all-or-nothing

For most people the smart move isn't to dump property for shares, but to diversify so that no single asset — or single tax change — can derail the plan. That might mean:

  • Directing new savings into a diversified share portfolio rather than a second property.
  • Using superannuation as a tax-effective vehicle for long-term share-market exposure.
  • Reviewing whether your SMSF is over-weighted to property.

Where advice fits

Choosing between property and shares — or, more sensibly, the right blend of both — depends on your income, debt, timeframe and how you'd react to a market fall. A licensed financial adviser can model the options against your real goals rather than a rule of thumb. As tax rules shift, that personalised guidance is more valuable, not less.