The 2026 Federal Budget has changed how many property investors may compare new builds and established homes.
Under the Budget changes, the Government has proposed that negative gearing will be limited to new residential properties from 1 July 2027. Existing arrangements would remain unchanged for properties held before Budget night, while investors who buy eligible new builds can still deduct losses from other income.
The proposal also changes CGT treatment from 1 July 2027, replacing the 50% CGT discount with cost-base indexation and a 30% minimum tax rate on capital gains. New residential property would receive different treatment, with investors able to choose between the existing CGT discount and the new indexation method, subject to eligibility and individual circumstances.
That does not mean every investor should automatically buy new. It does mean the choice between new and established property has become more important.
Tax treatment is now a bigger dividing line
Established homes bought after the Budget night cut-off are treated less favourably under the proposed negative gearing changes than eligible new builds. For some investors, that distinction may be relevant to the way they compare property types.
The Budget settings distinguish between established housing and new housing, with more favourable treatment applying to eligible new residential property.
Maintenance risk
Established homes often carry more maintenance uncertainty. Roofs, plumbing, electrical systems, hot water units, fencing, appliances and air-conditioning may all be partly through their useful life.
New homes generally offer a cleaner starting point, with newer fixtures, finishes and building components. That can reduce early maintenance uncertainty and make budgeting more predictable.
Tenant appeal
Tenant expectations have shifted. Many renters value modern kitchens, bathrooms, storage, heating and cooling, energy efficiency and low-maintenance outdoor areas.
A good established home can still lease well, especially in a strong location. A new home may present well online and offer the fresh, low-maintenance feel many tenants look for, depending on design, location and local market conditions.
Depreciation
New residential investment properties may have different depreciation considerations from older established homes, depending on the property, ownership structure and applicable tax rules.
Depreciation is technical, so investors should seek their own tax advice before relying on any particular treatment.
Vacancy timing and buying certainty
Traditional new builds can involve a long period before rent begins. Land, approvals, construction timing, weather and trade availability can all affect completion.
Established homes are usually available sooner, but may carry age-related condition risk.
A ready-built new home sits between the two. It gives buyers many of the features commonly associated with new housing without requiring them to manage the build process or wait through construction.
The practical middle ground
After the 2026 Federal Budget, investors may need to think more carefully about property type.
Established homes may still suit buyers seeking location, land content or renovation potential. Traditional new builds may suit buyers comfortable with construction. Ready-built new homes may offer a practical middle ground: new, complete, visible, potentially available for leasing sooner than a build-from-scratch option, and easier to assess before purchase.
This article provides general information only. It does not take into account any person’s objectives, financial situation, tax position or investment needs. It is not financial, tax or investment advice. Buyers and investors should obtain independent advice from appropriately qualified professionals before making decisions.