Why buying an off-the-plan property just got a whole lot more attractive

The Federal Budget handed down on 12 May 2026 changed the rules around property investment in Australia. For people thinking about buying a new home, whether to live in or to rent out, those changes are worth understanding. Because in a budget that tightened the settings for established property, new homes - including off-the-plan homes - came out with a clear and meaningful advantage.

What changed

Two longstanding tax arrangements were reshaped in the 2026-27 Budget, with the changes taking effect from 1 July 2027.

The first is negative gearing - or, in simple terms, the ability to deduct losses from a rental property against your other income, like your salary. 

From 1 July 2027, that deduction will only apply to new residential properties. Anyone who buys an established home after Budget night will still be able to offset losses against rental income from other properties, but not against wages or personal income.

The second is the capital gains tax (CGT) discount. Currently, if you sell an investment property you've held for more than 12 months, only half the gain is taxable. From 1 July 2027, that 50% discount will be replaced for established property by an inflation-based calculation and a minimum 30% tax on gains.

Both changes are grandfathered, which means if you already owned a property before Budget night, nothing changes for you.

Where new homes sit

New homes, including off-the-plan apartments and townhouses, are explicitly exempt from both changes.

If you buy a new home as an investment, you keep full negative gearing: losses can still be deducted against wages and other personal income. And when it comes to selling, you have a choice: take the existing 50% CGT discount, or use the new inflation-indexed arrangements - whichever works better for your situation.

That flexibility doesn't exist for established property purchased after Budget night. It's a meaningful distinction, and one that tilts the investment calculation firmly toward new supply.

AD Group managing director Tom Hywood believes separating the tax incentives for new and established property makes sense.

“New homes bolster supply, and support the construction industry and the broader economy. Aligning the incentives with that reality is the right move,” Tom said.

“For buyers who've been sitting on the fence, this is a meaningful moment. The financial case for buying new, either to live in or to invest, has always been strong - the budget has just made it stronger."

A window to act

The changes don't take effect until 1 July 2027, which gives buyers time to make considered decisions rather than rushed ones. But the window to purchase an established property under the current rules has already closed - that door shut at 7:30pm on Budget night.

The new tax advantages apply to all new builds, whether you're purchasing a completed new home or buying off-the-plan. Either way, full negative gearing and the CGT discount choice are available to you.

If you're buying off-the-plan, there's an additional timing advantage worth understanding. The ATO treats your acquisition date as the date you sign the contract, not when you settle. 

For off-the-plan purchases, where settlement typically occurs two to three years after exchange, this means the 12-month ownership period required to qualify for the CGT discount is usually satisfied well before you get the keys, without needing to hold the property for another year afterwards. 

If you're buying a completed new build that isn’t off-the-plan, the contract date still starts the clock. But with standard settlement times of 30 to 90 days, you'll still need to hold the property for nearly a year after moving in to reach that 12-month CGT threshold. As always, your own circumstances will vary, so speak with a financial adviser about what applies to you.

For award winning Brisbane studio Joe Adsett Architects, who designs, develops and builds multi-unit residential developments; most recently at Amari in Toowong; the change has already shifted the kind of enquiry coming through the door.

“The nature of enquiry has changed since Budget night,” said Joe Adsett Architects founder and principal Joe Adsett. 

“People who’d been deliberating about where to invest next are resolute about buying new property. Whilst I personally don’t agree with all the proposed changes to negative gearing, CGT and trusts, I do welcome changes in government policy that supports new housing being built.

 “Ultimately Australia needs new homes in the places people want to live. We can’t control what housing policy the government will land on, however, we can control what we are doing as a group, and at the minute our focus is upon new supply and providing more opportunities for people to invest in new housing.”

What it means if you're considering a new home

The budget changes don't alter the fundamental reasons people choose new homes - the quality of the design, the finish, the location, the sense of buying something that's entirely yours from day one. But they do change the financial backdrop in a way that makes the decision clearer for those already weighing their options.

If you're thinking about buying a new home to live in, the fundamentals haven't changed - and the reasons were already compelling. If you're thinking about buying to invest, the gap between new and established has widened considerably.

Either way, the picture is clearer now than it was before Budget night.

For more off-the-plan property news, click here.