When it comes to property investment, one of the biggest decisions is whether to purchase a brand-new property or an existing one. While older homes may sometimes appear cheaper upfront, new properties usually provide significant advantages for investors. From tax benefits to rental returns, here’s why buying new is often the smarter choice.
More Cost-Efficient and Modern
New properties are built with modern construction techniques, energy-efficient designs, and durable materials. They often include better security, open-plan layouts, and quality appliances. For investors, this means fewer immediate repairs and greater appeal to tenants seeking modern living.
Greater Tax Savings Through Depreciation
Brand-new properties offer significant tax benefits through depreciation. Residential buildings can be depreciated at 2.5% per year for up to 40 years. Fixtures and fittings like air conditioners, dishwashers and carpets also attract higher depreciation rates. By commissioning a depreciation schedule from a Quantity Surveyor, investors can reduce taxable income and improve cashflow.
More Choice and Customisation
Buying a property under construction or off-the-plan often allows you to choose finishes, layouts, and colour schemes. Selecting hard-wearing, low-maintenance options can reduce long-term costs and appeal to tenants, while ensuring the property aligns with your investment goals.
Higher Rental Income Potential
Tenants are often willing to pay a premium for brand-new homes. New properties generally attract higher rental yields, longer tenancy periods, and lower vacancy rates. This makes them especially valuable for investors relying on steady cashflow.
Peace of Mind with Builder Warranties
New properties are covered by builder warranties and insurance against major defects. This protection gives investors peace of mind and reduces the likelihood of unexpected repair costs.
Reduced Ongoing Maintenance Costs
Older properties typically require ongoing maintenance, from plumbing and electrical issues to kitchen and bathroom upgrades. New homes come with warranties on appliances, better sustainability features, and lower energy bills – all of which reduce outgoings.
Government Incentives for New Properties
Depending on the state, buyers of new properties may be eligible for grants and concessions such as the First Home Owner Grant and stamp duty reductions. These incentives can save investors thousands of dollars and improve affordability.
Time to Build Equity
Off-the-plan purchases allow investors more time to save for their deposit while the property is being built. In many cases, the property increases in value during construction, delivering instant equity gains once complete.
Overall, brand-new properties deliver stronger tax benefits, lower costs, and higher rental returns than older properties. They are purpose-built for modern living and investment success.
Want to learn how to choose the right new property and avoid paying hidden commissions? Book a free strategy call with the Real Estate Investor Network today.
Disclaimer: This material is general information only and does not take your personal circumstances into account. It is not financial, legal or tax advice. While we try to keep content accurate and current, we make no warranties as to accuracy or completeness and accept no liability for any loss arising from reliance, to the fullest extent permitted by law. You should seek your own independent professional advice.