Under the rules starting 1 July 2027, new builds can still be negatively geared and their investors can choose between the 50% capital gains tax discount and indexation. A new build is a home that genuinely adds to housing supply and has not been sold before.
That makes the definition of "new" one of the most important details in the May 2026 Budget changes. Here is how the government describes it.
What counts as a new build
The government's words are: "New builds are residential properties which genuinely add to supply." That covers homes built on vacant land, and projects where existing homes are knocked down and replaced with more homes than before.
The Budget explainer gives these examples:
| Counts as a new build | Does not count |
|---|---|
| Any home built on land that was previously vacant | An established home extended to add bedrooms |
| A new apartment bought off the plan | A knock-down rebuild that replaces one house with one house |
| A duplex replacing a single house | A granny flat added to an established property |
| A newly built home occupied for less than 12 months before it is first sold | A new home occupied for more than 12 months before it is sold to an investor |
Where house and land packages fit
A house and land package is a new home built on vacant land, which is the first example in the government's list. If you are weighing one up, our guide House and land packages: what to check before you sign covers the two contracts, titled and untitled land, and sunset dates.
The first buyer gets the benefit
A new build "cannot have been previously sold, unless first owned by the builder and not occupied for more than 12 months." The explainer also says later buyers of that home "will not be able to access the 50 per cent CGT discount or negative gearing in relation to that property."
In practice, the treatment belongs to the first owner after the builder. Keep the contract, the build completion date and any occupancy records, because your accountant may need them to confirm eligibility.
Tax is not the only test
A tax rule cannot make a property a good purchase on its own. The land, the location and the rent still decide most of the outcome. Before you choose, check:
- Population growth and local jobs
- Rental vacancy rates and the rent similar homes achieve
- Infrastructure that is funded, not just announced
- The builder's record and the build contract's completion date
- How much land comes with the home
New builds also tend to carry larger depreciation claims, which we explain in Depreciation on a new investment property.
What changed for property investors in 2026.Get the free guide
Yarrabilba, QLD
Common questions
Is a house and land package a new build under the 2027 rules?
A home built on previously vacant land is the government's first example of a new build. Your accountant confirms eligibility for your purchase.
Does an off-the-plan apartment count?
Yes. The Budget explainer lists a newly constructed apartment bought off the plan as eligible.
What about a knock-down rebuild?
Only if it adds homes, such as a duplex replacing one house. One house replacing one house does not count.
If I buy a new build in 2028, can I still negatively gear it?
New builds can be negatively geared before and after 1 July 2027, as long as the home meets the definition when you buy it.
General information only. It does not take your personal circumstances into account. Your accountant confirms how these rules apply to a property you buy.
