Building Over Buying: Investors’ Preference in Brisbane 2026

If you are an investment property owner in Brisbane, you are likely aware that the property investment landscape has experienced significant transformations. The 2026 Federal Budget, unveiled on 12 May, has introduced pivotal changes that will alter your approach to property investments moving forward.

In summary, acquiring an established investment property after this date means forfeiting the negative gearing benefits starting from 1 July 2027. On the other hand, if you opt to build new properties, you will retain this advantage. This shift is not a mere loophole; it stems from a government policy aimed at enhancing the supply of new housing. The government is actively encouraging new constructions, which come with tax benefits, while established properties will no longer enjoy these perks.

For investors who have historically concentrated on acquiring and holding established properties, this signals a significant strategic shift. If you are currently weighing your next investment decision, the focus on constructing new properties is now more pertinent than ever.

Understand the Essential Changes in Property Investment Regulations

Prior to 12 May 2026, the system of negative gearing applied uniformly to both new and established properties. If your rental income was less than your expenses — including mortgage interest, rates, insurance, and maintenance costs — you could offset those losses against your overall income, effectively reducing your tax liability. Most investors were well-acquainted with this mechanism, which significantly influenced their investment strategies.

From 1 July 2027, this offset will only be applicable to new builds. If you acquire an established property after 12 May 2026, your rental losses will only offset against other property income. This means you will no longer be able to reduce your taxable income from salary or other investments. The attractive tax advantages that made negatively geared properties appealing to higher-income earners will be removed for existing stock.

Conversely, new builds will continue to benefit from the full advantages of negative gearing. Investors in new constructions can choose between a 50 percent capital gains tax (CGT) discount or opting for cost base indexation upon sale, depending on what aligns best with their financial circumstances.

For high-income individuals considering their next investment, the post-tax financial implications of new builds versus established properties have dramatically shifted. If you have not yet consulted your accountant regarding these changes, make it a priority to initiate that conversation.

What Defines a New Build?

This is where the specifics become critically important.

The government's criteria for an eligible new build are explicit: the property must contribute to increasing the housing supply. This includes:

• A dwelling constructed on vacant land is eligible. If it is a new construction on an empty plot, it qualifies.
• A duplex or dual occupancy resulting from a knockdown rebuild qualifies, provided you are replacing one dwelling with more than one. For instance, demolishing a single house and constructing a duplex increases supply and meets the criteria.
• However, a knockdown rebuild replacing one house with another single house does not qualify. The government documentation explicitly 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 implications for Brisbane investors are clear: if you own a sizeable block and are considering your next steps, opting for a duplex or dual occupancy instead of a single dwelling is no longer just a design preference. It now determines whether your build qualifies as a new build under the current regulations.

Why High-Value Investments Over $1 Million Are Particularly Attractive Now

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

These are specifically the investors that Iconic targets for construction.

A duplex or dual occupancy project with Iconic typically starts at $1 million solely for construction. This is not a standard project home price; it reflects 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 substantial. The rental income generated from two dwellings is robust, making the negative gearing advantage 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, is encouraging.

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

Understanding the Timeline and Its Critical Importance

This is the aspect that frequently surprises investors.

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

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

Investors aiming to have a completed, tenanted new build before the regulations change have likely missed this window. The correct perspective is this: those who wish to be strategically positioned under the new rules — with a qualifying new build underway or contracted — must make decisions now, rather than waiting six months.

You need to identify or already own the land. Your financing needs to be secured. A feasibility assessment of what can be built must be conducted. Each of these steps requires 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 Ideal Investment Blocks in Brisbane

Not every block is suitable for a duplex or dual occupancy build, and certain locations are not conducive to investments of this magnitude. 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 requirements under the Redland City Plan. Zoning is also crucial — some zones allow for 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. Be sure 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 must keep in mind that council rates in the Redlands are notably higher than those in the Brisbane City Council. This discrepancy can accumulate on a dual occupancy or duplex and must be included in your financial calculations before acquiring a block.

For investors focused on Brisbane City Council areas, medium-density suburbs like Wynnum, Manly, Carindale, Bulimba, Cannon Hill, Camp Hill, Morningside, and Coorparoo are currently where the action is. These locations offer strong rental demand, good access to amenities, and zoning that generally supports dual occupancy and duplex development.

Existing dwelling: If you are purchasing a block with an existing house, be sure to account for demolition costs, which start 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 detailed breakdown of the costs associated with building in Brisbane, refer to our 2026 custom home cost guide →

Mastering 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, there are several critical considerations to keep in mind.

Financing differs. A construction loan for an investment build releases funds in stages as construction progresses rather than as a lump sum. Your broker should be knowledgeable about construction finance, and your borrowing structure must reflect the understanding that rental income will not be available during the construction phase. Ensure your financing is organised before proceeding with any other steps — it 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 feel 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 demand 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 what is 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 craft 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

Both options can achieve success, but understanding the differences is crucial:

A duplex consists of two dwellings connected side by side or stacked, sharing a common wall. Generally, this is 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, 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 Frequently Asked Questions

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

Only if it increases the number of dwellings. For instance, demolishing a single house and constructing 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 has not 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 scrutinise the occupancy history carefully.

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 come into play. Some zones do not permit dual occupancy regardless of block size. A feasibility assessment of your specific block prior to purchase is critical.

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 usually take 4 to 6 months, followed by construction which lasts 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 occur now. Your accountant can evaluate whether the tax implications make sense for your specific income and investment structure. Your builder can assess whether your block is suitable and if your budget is realistic for a qualifying new build. Each conversation is brief but informative.

Ready to Discuss Your Investment Build?

If you are a Brisbane investor considering your options following the budget changes and wish for 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 construct across Brisbane, including Cleveland and the Redlands. We will inquire about your budget early on, provide a candid 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 →