Off the plan after the Budget: new builds keep negative gearing
Off the plan property is now the main way a new investor can keep negative gearing. A newly built apartment counts as a new build, so the old rules still apply to it. It also gets a choice of capital gains method and sits outside the bank cap on high debt loans. The catch: none of that passes to the next buyer.
In February we published off the plan against established property. It is still up, unchanged. Three months later the Budget rewrote the tax rules for one side of that comparison and left the other alone.
So here is the comparison again, under the law as it stands.
Key facts, as at 15 September 2026
- New builds keep negative gearing before and after 1 July 2027
- First buyers of new builds choose the 50% CGT discount or indexation at sale
- Later buyers of the same home get neither
- The bank limit on loans above six times income excludes loans for new dwellings
- Victoria: off the plan duty concession for contracts before 21 April 2027
Sources: Treasury, APRA, State Revenue Office Victoria
Old rules against new rules
| Established home bought now | Off the plan new build | |
|---|---|---|
| Negative gearing to 30 June 2027 | Yes | Yes |
| Negative gearing from 1 July 2027 | No. Losses carried forward | Yes |
| Capital gains method at sale | Indexation for gains after 1 July 2027 | Your choice of 50% discount or indexation |
| Bank cap on loans above six times income | Applies | Does not apply |
| What the next investor gets | The same as you | Nothing. It is an established home to them |
Three wins and one loss. The loss is at the bottom, and it is the one that decides your sale price.
The resale problem
Treasury's fact sheet says it plainly: "Subsequent purchasers of the dwelling will not be able to access the 50 per cent CGT discount or negative gearing in relation to that property."
Think about who buys a two bedroom investor apartment in five years. If it is another investor, they are buying an established home with no tax help. They will pay less for it than you could justify paying today.
If it is someone who wants to live there, none of this matters to them. So the question to ask of any off the plan apartment is not "what is the tax saving". It is "would a person choose to live here".
The growth problem
Off the plan mostly means apartments. Treasury, using Cotality data, published the average yearly capital growth for houses and units over the past twenty years.
| Houses | Units | |
|---|---|---|
| Held 5 years | 5.8% | 4.1% |
| Held 10 years | 6.1% | 4.8% |
Source: Treasury analysis of Cotality data, Budget 2026 to 27 fact sheet, Table 1
Units grew more slowly than houses on both measures. Over ten years the gap is 1.3 points a year, and that compounds.
A tax deduction that saves a few thousand dollars a year does not make up for an asset that grows more slowly. It can make a good apartment better. It cannot rescue a poor one.
The settlement problem
You agree the price today and pay it when the building is finished, which can be years away. In between, the market moves.
National values have fallen 3.6% since March. If the bank's valuer says your finished apartment is worth less than the contract price, you must cover the difference in cash. In a falling market that risk is real, and it is yours, not the developer's.
Where it does make sense
You are held back by the lending cap. If your total debt is near six times your income, a loan for a new dwelling is outside the cap.
You are buying in Victoria before April. The duty concession and the federal rules stack.
The building would sell to owner occupiers. Good size, light, parking, a street people want. Boutique blocks more than towers.
You plan to hold for a long time. The tax benefits are yours for as long as you own it. The longer the hold, the less the resale discount matters.
Frequently asked questions
Can I still negatively gear an off the plan property?
Yes. A newly built apartment bought off the plan is on Treasury's list of eligible new builds, so rental losses can still reduce your other income before and after 1 July 2027.
Do off the plan properties get the 50% CGT discount?
The first buyer of a new build can choose between the 50% discount and the new indexation method when they sell. Buyers of established homes move to indexation for gains after 1 July 2027.
What are the risks of buying off the plan in 2026?
The home may be worth less at settlement than the price you agreed, the next investor who buys it gets no tax benefits, and Treasury's own figures show units have grown more slowly than houses over twenty years.
Is there a stamp duty concession for off the plan in Victoria?
Yes. Victoria's temporary concession covers strata apartments, units and townhouses for contracts signed before 21 April 2027, and investors are eligible.
Sources
- Treasury, Negative Gearing and Capital Gains Tax Reform fact sheet, Budget 2026 to 27
- APRA, limit on high debt to income home loans
- State Revenue Office Victoria, off the plan duty concession
- Cotality Home Value Index, 1 September 2026
This is general information, not tax or financial advice. Off the plan contracts carry legal risks. Have a solicitor read yours before you sign.