2026 Preferences of Brisbane Investors: Building Over Buying

If you possess 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 key alterations that will reshape your strategy towards property investments in the future.

Essentially, acquiring an established investment property after this date will mean forfeiting your negative gearing benefits beginning on 1 July 2027. In contrast, choosing to build new properties will enable you to retain these advantages. This shift is not a loophole; it arises from a government initiative aimed at boosting the supply of new housing. The government actively promotes new constructions, which come with tax incentives, while established properties will no longer enjoy these benefits.

For investors who have traditionally focused on buying and holding established properties, this represents a major tactical shift. If you are currently evaluating your next investment, the importance of constructing new properties has never been more pronounced.

Discover the Major Changes in Property Investment Regulations

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

Starting from 1 July 2027, this offset will be restricted to newly built properties only. 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 reduce 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.

On the other hand, new builds will retain the complete benefits of negative gearing. Investors in new builds can opt for a 50 percent capital gains tax (CGT) discount or choose cost base indexation upon sale, based on their financial situation.

For high-income individuals contemplating their next investment, the financial implications 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 Qualifies as a New Build

Details are crucial in this situation.

The government's criteria for a qualifying new build are specific: the property must contribute to enhancing the housing supply. This includes:

• A dwelling constructed on vacant land is eligible. If it’s a new build on an unoccupied block, it qualifies.
• A duplex or dual occupancy resulting from a knockdown rebuild qualifies, provided you replace one dwelling with more than one. For instance, demolishing a single house and constructing a duplex increases supply and meets the criteria.
• A knockdown rebuild that replaces one house with another single house is not eligible. Government guidelines explicitly state that a one-for-one replacement of free-standing houses is NOT a qualifying new build for negative gearing purposes.
• A newly constructed apartment bought 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 implications for Brisbane investors are unmistakable: if you possess a sizeable block and are contemplating your next steps, choosing 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.

The Appeal of High-Value Investments Exceeding $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 aims 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, especially in a Brisbane market facing genuine supply constraints, appears promising.

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

Understanding the Timeline and Its Critical Significance

This aspect often catches investors off guard.

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

The new regulations will come into effect on 1 July 2027, which is just 13 months away.

Investors aiming to have a completed, tenanted new build before the regulations change may have already missed this opportunity. The 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 delaying for another six months.

You must identify or already own the land. Your financing needs to be arranged. A feasibility assessment of what can be built must be conducted. Each of these steps is time-sensitive and must be completed sequentially.

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

Identifying Optimal Investment Blocks in Brisbane

Not every block is suitable for a duplex or dual occupancy build, and some areas might not support investments of this scale. Here are crucial 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 requirements under the Redland City Plan. Zoning is also vital—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 significantly cheaper to build on than a steep one. Site costs for a sloping block can add between $50,000 to $150,000 or more to your overall project. Ensure these expenses are factored into your land purchase budget.

Location and demand: Areas such as the Redlands—including Cleveland, Thornlands, Victoria Point, and Capalaba—demonstrate strong and consistent rental demand for well-designed dual occupancy and duplex properties. Investors should also note that council rates in the Redlands are considerably 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 prior to 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 offer 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 the size and presence of asbestos. 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 detailed breakdown of the costs associated with building in Brisbane, refer to our 2026 custom home cost guide →

Mastering the Build 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 rather than as a lump sum. Your broker should have expertise in construction finance, and your borrowing structure must acknowledge that you won’t have rental income during the construction phase. Ensure your financing is organised before proceeding with any other steps—this will influence 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 lack appeal, 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 crucial. For an investment build, a fixed-price contract is essential. 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 appealing plans without considering costs, leading to unpleasant 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 →

Evaluating Dual Occupancy and Duplex for Investment Success

While both options can be effective, understanding the differences is essential:

A duplex consists of two dwellings connected either side by side or stacked, sharing a common wall. This is typically 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 permits.

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 critical 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 →

Answering Common Questions

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, while 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 prior to the first sale. If you are acquiring a completed new build from a developer who constructed it as a development project, ensure you carefully review the occupancy history.

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. It is crucial that you do not purchase an established property after 12 May 2026. A new build that is contracted and under construction after this date will still qualify.

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

Generally, 600 square metres is needed 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 essential.

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

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

Should I consult with my accountant or builder first?

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

Ready to Explore Your Investment Build?

If you are a Brisbane investor considering 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 ask about your budget early in the process, provide a straightforward assessment of what it can achieve, and outline a realistic process from start to finish.

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