Building Over Buying: 2026 Preferences of Brisbane Investors

If you own an investment property in Brisbane, you are probably aware that the property investment environment is experiencing significant transformations. The 2026 Federal Budget, unveiled on 12 May, has introduced notable changes that will redefine your approach to property investments moving forward.

In essence, acquiring an established investment property post this date will result in the loss of negative gearing benefits effective from 1 July 2027. Conversely, opting to construct new properties will allow you to retain these advantages. This adjustment is not a loophole; it stems from a government initiative focused on increasing the supply of new housing. The government is actively encouraging new builds, which come with tax benefits, while established properties will no longer enjoy these perks.

For investors who have typically prioritised the purchase and holding of established properties, this marks a substantial strategic shift. If you are currently weighing your next investment decision, the emphasis on constructing new properties has never been more critical.

Understand the Key Changes in Property Investment Regulations

Prior to 12 May 2026, the negative gearing mechanism applied equally to both new and established properties. If your rental income did not meet your expenses—which include mortgage interest, rates, insurance, and maintenance costs—you were able to offset those losses against your overall income, thus reducing your tax liability. Most investors were well-acquainted with this mechanism, which significantly shaped their investment strategies.

From 1 July 2027, this offset will be limited to new builds only. Should 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 lower your taxable income from salary or other investments. The appealing tax benefits that made negatively geared properties attractive to high-income earners will be withdrawn for existing stock.

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

For high-income individuals considering their next investment, the financial implications of new builds versus established properties have changed dramatically. If you haven’t yet discussed these changes with your accountant, prioritise that conversation.

Defining What Qualifies as a New Build

Details are vital in this context.

The government’s criteria for an eligible new build are quite specific: the property must contribute to enhancing 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 instance, 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 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 substantial block and are contemplating your next steps, choosing a duplex or dual occupancy instead of a single dwelling is more than just a design decision. It now dictates 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 once 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 commences at $1 million for construction alone. 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 endure.

At this price point, the tax implications become substantial. The rental income produced from two dwellings is significant, 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 personalised 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 takes investors by surprise.

The duration from your initial consultation with a builder to receiving the keys for a duplex or dual occupancy build typically spans 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 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 window. The right perspective is this: 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 needs to be arranged. A feasibility assessment of what can be built must be conducted. Each of these steps requires time and must be completed in a sequential manner.

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 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 essential—some zones allow dual occupancy, while others do not. Conducting a feasibility assessment before purchasing land is crucial.

Slope: A flat or gently sloping block is significantly 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 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 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 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 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 Questions

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

Only if it increases the number of dwellings. For instance, 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 prior to the first sale. If you are purchasing a completed new build from a developer who constructed it as a development project, ensure you review the occupancy history carefully.

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

No. The essential factor is that the property is a new build—not its completion date. What is critical 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 needed under the Brisbane City Plan 2014, but zoning and overlays also come into consideration. Certain zones do not allow 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 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 occur now. Your accountant can evaluate whether the tax implications are advantageous for your particular 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 contemplating your options in light of the budget changes and wish to have an honest discussion about what is feasible—including block viability, construction costs, timelines, and qualifying criteria—contact the team at Iconic Homes.

We operate across Brisbane, including Cleveland and the Redlands. We will inquire about your budget early in the process, 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 →