Brisbane Investors’ 2026 Preferences: Building Over Buying

If you own an investment property in Brisbane, you are likely aware that the property investment landscape is undergoing significant changes. The 2026 Federal Budget, revealed on 12 May, has introduced important alterations that will reshape your strategy towards property investments in the future.

In summary, acquiring an established investment property after this date will see the removal of negative gearing benefits effective from 1 July 2027. On the other hand, choosing to build new properties will allow you to maintain these advantages. This change is not a loophole; it arises from a government initiative aimed at boosting the supply of new housing. The government is actively promoting new constructions, which come with tax benefits, while established properties will no longer qualify for these incentives.

For investors who have typically focused on purchasing and holding established properties, this signifies a major strategic shift. If you are currently considering your next investment move, the focus on constructing new properties has never been more essential.

Comprehend the Significant Changes in Property Investment Regulations

Prior to 12 May 2026, the negative gearing system applied uniformly to both new and established properties. If your rental income fell short of your expenses—which encompass mortgage interest, rates, insurance, and maintenance costs—you could offset those losses against your total income, thereby reducing your tax liability. Most investors were familiar with this system, which significantly influenced their investment strategies.

From 1 July 2027, this offset will be restricted to new builds exclusively. If you purchase an established property after 12 May 2026, your rental losses will only offset against other property income. You will no longer be able to decrease your taxable income from salary or other investments. The attractive tax benefits that made negatively geared properties appealing to high-income earners will be eliminated for existing stock.

In contrast, new constructions will retain the full benefits of negative gearing. Investors in new builds can choose between a 50 percent capital gains tax (CGT) discount or opt for cost base indexation upon sale, depending on their financial circumstances.

For high-income individuals contemplating their next investment, the financial ramifications of new builds versus established properties have shifted dramatically. If you haven’t discussed these changes with your accountant yet, make it a priority.

Clarifying What Constitutes a New Build

Details matter in this context.

The government’s criteria for what qualifies as an eligible new build are quite specific: the property must contribute to increasing the housing supply. This includes:

• A dwelling built on vacant land is eligible. If it’s a new construction on an unoccupied block, it qualifies.
• A duplex or dual occupancy resulting from a knockdown rebuild qualifies, as long as you replace one dwelling with more than one. For example, demolishing a single house and constructing a duplex increases supply and meets the criteria.
• However, a knockdown rebuild that replaces one house with another single house is not eligible. The government documentation clearly states that a one-for-one replacement of free-standing houses is NOT an eligible new build for negative gearing purposes.
• A newly constructed apartment purchased off the plan qualifies as a new build.
• A granny flat added to an existing property does NOT qualify for negative gearing on the granny flat portion.

The ramifications for Brisbane investors are evident: if you own a large block and are considering your next steps, opting for a duplex or dual occupancy instead of a single dwelling is more than just a design choice. It now determines whether your build qualifies as a new build under the current regulations.

Understanding the Appeal of High-Value Investments Over $1 Million

The individuals most affected by these changes are high-income earners—those who previously benefitted from negative gearing by offsetting losses against income taxed at 47 cents to the dollar.

These are precisely the investors that Iconic seeks to attract for construction projects.

A duplex or dual occupancy project with Iconic typically starts at $1 million for construction alone. This is not a standard project home price; it represents a custom, architect-designed build featuring two fully independent dwellings tailored for the block and built to last.

At this price point, the tax implications become significant. The rental income generated from two dwellings is substantial, making the negative gearing benefit on a high-value build considerable. The CGT position for a quality new build held over the medium to long term, particularly in a Brisbane market facing genuine supply constraints, looks promising.

This is not financial advice. Always consult your accountant for tailored guidance based on your individual circumstances. The case for a high-quality duplex or dual occupancy build in Brisbane has rarely been more compelling.

Recognising the Timeline and Its Critical Importance

This aspect often surprises investors.

The timeframe from your initial consultation with a builder to receiving the keys for a duplex or dual occupancy build usually spans at least 18 months. Design and approvals can take between 4 to 6 months, followed by construction, which typically lasts 10 to 14 months.

The new regulations will take effect on 1 July 2027, which is only 13 months away.

Investors hoping to have a completed, tenanted new build before the regulations change may have already missed this opportunity. The right perspective is clear: those who wish to be strategically positioned under the new rules—with a qualifying new build either underway or contracted—must make decisions now rather than waiting another six months.

You need to identify or already own the land. Your financing must be organised. A feasibility assessment of what can be built must be conducted. Each of these steps takes time and must be completed sequentially.

If you are serious about this opportunity, the time to discuss your plans is now. This is not about creating urgency; it’s about adhering to genuine timelines.

Identifying the Ideal Investment Blocks in Brisbane

Not every block is suitable for a duplex or dual occupancy build, and some locations may not support investments of this size. Here are key factors to consider.

Size and zoning: Under the Brisbane City Plan 2014, a minimum of 600 square metres is generally required for dual occupancy. The Redlands have similar stipulations under the Redland City Plan. Zoning is also crucial—some zones allow dual occupancy, while others do not. Conducting a feasibility assessment before purchasing land is essential.

Slope: A flat or gently sloping block is considerably cheaper to build on compared to a steep one. Site costs for a sloping block can add between $50,000 to $150,000 or more to your overall project. Ensure to factor these expenses into your land purchase budget.

Location and demand: Areas such as the Redlands—including Cleveland, Thornlands, Victoria Point, and Capalaba—exhibit strong and consistent rental demand for well-designed dual occupancy and duplex properties. Investors should note that council rates in the Redlands are significantly higher than those in the Brisbane City Council. This difference can accumulate on a dual occupancy or duplex and must be included in your financial calculations before acquiring a block.

For investors targeting Brisbane City Council areas, medium-density suburbs such as Wynnum, Manly, Carindale, Bulimba, Cannon Hill, Camp Hill, Morningside, and Coorparoo are currently prime locations. These areas provide strong rental demand, excellent access to amenities, and zoning that typically supports dual occupancy and duplex development.

Existing dwelling: If you are purchasing a block with an existing house, ensure you account for demolition costs, which start at around $25,000 depending on size and whether asbestos is present. A knockdown rebuild that transitions from one dwelling to two qualifies as a new build under the 2026 budget regulations, while a one-for-one replacement does not.

For a comprehensive breakdown of the costs associated with building in Brisbane, refer to our 2026 custom home cost guide →

Navigating the Construction Process for Investment Properties

The process of constructing a duplex or dual occupancy for investment purposes is not dramatically different from building a custom home; however, several key considerations should be kept in mind.

Financing differs. A construction loan for an investment build releases funds in stages as the construction progresses instead of as a lump sum. Your broker should be knowledgeable about construction finance, and your borrowing structure must reflect the understanding that you won’t have rental income during the construction phase. Ensure your financing is organised before proceeding with any other steps—this influences every subsequent decision. For a detailed order of operations, refer to our Brisbane new build guide →

Design impacts yield. A duplex or dual occupancy designed solely to minimise construction costs may result in two dwellings that feel subpar, which tenants will notice. Thoughtful design leads to better tenants, lower vacancy rates, and increased long-term capital value. Investing in design choices that create a property that feels like a quality standalone dwelling is worthwhile.

Fixed-price contracts are essential. For an investment build, a fixed-price contract is crucial. It is what your lender will require and what safeguards your budget. Variable cost contracts on investment properties can lead to budget overruns at critical moments. Ensure your builder provides a genuine fixed-price contract and clarify what is included—and excluded—prior to signing.

Engage a builder with in-house design capabilities. This is particularly important for investors compared to owner-occupiers. An independent architect or designer may create beautiful plans without considering costs, leading to surprises when presented to a builder. A builder with an in-house design team ensures that cost considerations remain central to every design decision, preserving the integrity of your investment model. For more insights on this, read our section on designer selection in the Brisbane build guide →

Comparing Dual Occupancy and Duplex for Investment Success

While both options can be successful, understanding the differences is crucial:

A duplex consists of two dwellings connected either side by side or stacked, sharing a common wall. This is generally more efficient to build on a standard block. Subdivision into two separate titles is possible after construction.

A dual occupancy features two dwellings on one title, which can be either attached or detached. A typical layout includes a house at the front and a second home at the rear. This arrangement can also be subdivided later if the block size and zoning allow.

For investors, key considerations include: what does your block permit, how does the local rental market respond, and what is the best strategy—maintaining both dwellings on one title or subdividing for potential separate sale or financing flexibility later? These are essential discussions to have with your builder and accountant before finalising designs.

For an in-depth analysis of dual occupancy options in Brisbane and the Redlands, visit our dual occupancy page →

Addressing Common Queries

Does a knockdown rebuild qualify for negative gearing under the new regulations?

Only if it increases the number of dwellings. For example, knocking down a single house and building a duplex qualifies, whereas replacing one house with another single house does not. The government’s policy specifically targets new supply rather than replacement supply.

Can I negatively gear a new build duplex purchased from a developer?

Only the first buyer from the builder qualifies, provided the property hasn’t been occupied for more than 12 months before the first sale. If you are buying a completed new build from a developer who constructed it as a development project, ensure you review the occupancy history thoroughly.

Must I have the build completed before 1 July 2027 to qualify?

No. The key factor is that the property is a new build—not its completion date. What matters is that you do not purchase an established property after 12 May 2026. A new build that is contracted and under construction after this date still qualifies.

What is the minimum block size for a duplex in Brisbane?

Typically, 600 square metres is required under the Brisbane City Plan 2014, but zoning and overlays also play a role. Certain zones do not permit dual occupancy regardless of block size. A feasibility assessment of your specific block before purchase is crucial.

How long does it take to build a duplex or dual occupancy?

From the initial consultation to handover, you should budget for a minimum of 18 months. Design and approvals generally take 4 to 6 months, followed by construction lasting 10 to 14 months. Complications from site conditions or council assessments can extend this timeline.

Should I consult with my accountant or builder first?

Both discussions are valuable and should happen now. Your accountant can assess whether the tax implications are advantageous for your specific income and investment structure. Your builder can evaluate whether your block is suitable and if your budget aligns with a qualifying new build. Each conversation is brief but informative.

Ready to Explore Your Investment Build Options?

If you are a Brisbane investor contemplating your options in light of the budget changes and wish to engage in an honest discussion about what is feasible—including block viability, construction costs, timelines, and qualifying criteria—reach out to the team at Iconic Homes.

We operate throughout Brisbane, including Cleveland and the Redlands. We will inquire about your budget early in the process, provide a frank assessment of what it can achieve, and outline a realistic process from start to handover.

No pressure, no jargon; just a straightforward conversation. Call us at 0402 017 072 or schedule a free consultation →