Strategy
After Budget 2026: should investors only buy new builds now?
The carve-out for newly constructed dwellings is the most important detail in the Budget. We pressure-test whether ‘only buy new’ is actually the right read.
The instinctive reaction to the 2026–27 Budget has been: “just buy new — that’s where the tax breaks are.” It is the right instinct, but the wrong rule. New builds now carry a structural tax advantage, but they also carry structural risks the established market does not.
Why the carve-out exists
The Government’s explicit goal is to add roughly 1.2 million homes by 2029. Tilting the tax code toward newly built stock is the cheapest way to redirect private balance sheets into that target without writing a single direct subsidy cheque.
Where investor capital is being nudged (post-Budget)
- New houses & townhouses45%
- Build-to-rent20%
- Established (grandfathered only)25%
- Off-the-plan apartments10%
Where “only buy new” breaks down
- Land-to-asset ratio. Apartments and small-lot townhouses can be brand new and still under-perform because the land share of the asset is too low.
- Developer margin baked in. Off-the-plan stock can price in 12–18% margin you would not pay on established. A 50% CGT discount on a flat asset is still a flat asset.
- Single-suburb saturation. Greenfield estates often sell to investors in waves, creating concurrent rental and resale competition.
- Title and completion risk. Sunset clauses, builder solvency and rising construction costs sit with the buyer.
The cases where established still wins
| Scenario | Why established still beats new | |
|---|---|---|
| Inner / middle-ring blue-chip | Scarcity premium and OO depth outrun the tax delta over 10y. | |
| Renovation-led equity play | Forced appreciation > the marginal tax saving on a new build. | |
| Grandfathered portfolio top-up | Existing trust/SMSF structures can absorb established stock at old rules until cut-off. | |
| Buy-and-hold in tight rental markets | Yield + occupancy stability often outweigh deduction differential. |
How we’re actually shortlisting in 2026
For new builds we add three filters on top of the standard suburb work: builder solvency and history, owner-occupier ratio of buyers in the same release, and the resale comparables of the previousstage at the same estate. If any of those fail, we go back to established stock and treat the tax change as a tilt — not a verdict.
The Budget changed the maths. It did not change what a good asset looks like.
The 2026 watchouts
- Construction cost inflation is still running ahead of CPI in QLD and WA
- Body corporate and insurance costs are rising sharply on newer strata
- Some councils are tightening secondary-dwelling and short-stay rules — model income conservatively
| Factor | New build | Established |
|---|---|---|
| Y1 depreciation | $10–15k | $2–4k |
| Land share | 20–40% | 60–80% |
| 10-yr growth (avg) | 3–5% p.a. | 5–7% p.a. |
| Defect risk | Moderate-high | Low-moderate |
| Stamp duty (NSW $800k) | ~$0 (off plan concession) | ~$31k |
Liked this? Get the weekly NOVAQ market brief
Suburb deep-dives, RBA & policy moves, and deal stories — straight from Chartered Accountants buying property every week.
FAQ
Frequently asked
- Is it better to buy new or established for tax purposes?
- New builds offer higher depreciation in the first 5–10 years, which suits high-income investors needing immediate cashflow relief. Established homes offer better long-term capital growth because the land component is larger.
- Do the 2026 Budget changes favour new builds?
- Marginally yes — expanded Help to Buy, build-to-rent concessions and faster planning approvals all support new construction. But they don't outweigh the underlying land-growth advantage of established homes.
Written & reviewed by
The NOVAQ founders
Every NOVAQ article is written or reviewed by our founders — both Chartered Accountants who actively invest in Australian property. Not journalists, not interns.
Shreyas Doshi
Co-Founder · Chartered Accountant
15+ yrs in international tax, compliance, structuring and advisory across Deloitte, PwC and a large multinational mining company. Multi-state personal portfolio under different structures.
Yuvraj Kapadia
Co-Founder · CA, CPA, SMSF Specialist
ASIC-registered SMSF Auditor, Tax Agent, licensed Finance & Mortgage Broker and Buyer's Agent. Multi-state personal portfolio under different structures.
Get in touch
Ready for a goal-based property strategy?
Book a no-obligation strategy call. We’ll listen first, then tell you whether property is the right tool for your goal — and which strategy fits.
⚡ Instant calendar · Free 60-min callTakes 60 seconds. Pick your time straight after — our live booking calendar opens the moment you submit.