Following the passage of the 2026 Federal Budget's tax reforms into law, property investors are taking a closer look at how changes to negative gearing and capital gains tax will reshape future investment.
With negative gearing now limited to eligible new builds from 1 July 2027, newly built homes are becoming a more strategic consideration for investors planning their next move. Changes to capital gains tax treatment will also shape how buyers compare established properties with new residential opportunities.
For Victorian investors, this is more than a tax update. It is a timely reason to reassess what type of property may best support a long-term strategy. In this changing landscape, off-the-plan apartments and townhouses may become more attractive to buyers who want to plan ahead, secure a new home in an established location and align their purchase with the evolving investment environment.
For years, many investors compared established properties with new builds through a familiar lens. They looked at price, location, rental demand, holding costs and long-term potential.
Now, tax treatment has become a much bigger part of that equation.
Under the new legislation, investors who purchase eligible new builds will retain access to negative gearing, allowing eligible rental losses to continue being deducted against other income. Existing residential investment properties purchased after the Budget night announcement will be treated differently under the new rules.
Rather than rushing into an established property, buyers can secure a future home or investment while the project is still progressing. This can provide time to prepare finances, review lending options, consider rental strategy and seek advice from a broker, accountant or financial adviser before settlement.
In Victoria, off-the-plan buyers may also be able to explore potential stamp duty savings, depending on eligibility, contract timing and the type of property purchased.
New apartments and townhouses can also appeal to tenants because they often offer modern layouts, energy-conscious features, secure access, low-maintenance finishes and locations close to transport, shops, universities, employment hubs or lifestyle amenities.
These features can help support long-term tenant appeal, although rental demand will always depend on the property, suburb and broader market conditions.
The Federal Budget's tax reforms have placed renewed attention on new housing supply. New builds that add to the housing stock are being treated differently from established dwellings, placing off-the-plan apartments and townhouses in a stronger strategic position for investors who want to stay active in residential property.
In practical terms, this could make the next investment conversation less about simply buying "a property" and more about buying the right type of property.
A well-located new apartment or townhouse can offer several advantages. It can sit in a suburb with a strong lifestyle appeal. It can provide finishes and layouts that suit modern renters. It can reduce some of the immediate maintenance considerations that often come with older stock. It can also give investors a clearer way to align their purchase with the changing tax environment.
That is where off-the-plan can become more than a purchase. It can become a planned move.
Before making a decision, investors should look beyond the headline and consider the full picture.
Start with the location. Look at transport, schools, retail, employment access, lifestyle amenity and the type of renter the suburb is likely to attract.
Then review the property itself. Consider floor plan efficiency, natural light, storage, outdoor space, building quality and the overall liveability of the home.
A smart investment is not only about tax treatment. It is also about how desirable the property feels to future tenants and how well it may hold appeal over time.
Finally, get the right advice. Tax rules can still be complex and individual circumstances matter. Investors should speak with a qualified accountant, broker or financial adviser to understand how the new rules may apply to their situation.
The Federal Budget's tax reforms may encourage investors to look at residential property through a different lens. For those planning their next move, off-the-plan apartments and townhouses may offer a practical way to align with the changing investment environment while also considering lifestyle, rental appeal and long-term location fundamentals.
At Norus Projects, our focus is on well-considered apartment and townhouse developments in established Melbourne locations. Projects such as Sanctuary Sandringham, Beach Point Sandringham, Parkview Burwood and Riverbend Ivanhoe give buyers the opportunity to explore new homes in suburbs with lifestyle appeal, transport access and everyday amenities.
For investors, the opportunity is not simply about buying new. It is about choosing carefully, planning ahead and seeking the right advice before making a decision.
To learn more about Norus Projects and explore current apartment and townhouse opportunities, get in touch with our team today.
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