New vs.
Existing Homes

The current housing market brings advantages to investing in new builds.

The potential benefits

New build homes have lower Loan-to-Value Ratio limits.

At present, investors of a new build home are able to claim interest as an expense against their residential property income.

The exemption is for a fixed period of 20 years from the time the Code of Compliance Certificate is issued.


The Bright-line rule

The Bright-line Property Rule means that if you sell an investment property within certain time frames, you may need to pay tax on any capital gains.

Existing Homes:

  • Bought prior to October 2015: Bright-line period does not apply
  • Bought between October 1, 2015, and March 28, 2018: 2-year Bright-line period applies
  • Bought between March 29, 2018, and March 26, 2021: 5-year Bright-line period applies
  • Bought on or after March 27, 2021: 10-year Bright-line period applies to New Builds
  • New Builds purchased after March 2021 still only have a 5-year Bright-line period.


Source: The bright-line property rule (


  • Bright-line Test: 5 Years.
  • Interest Deductibility: Yes – for 20 years. Mortgage interest is a currently a tax-deductible expense for New Builds.
  • LVR (Loan to Value Ratio): Banks/Lenders may lend up to 80%.
  • Deposit requirement: 20%.
  • Healthy Homes: Investors have comfort in knowing that new build properties meet the Healthy Home Standard.



  • Bright-line Test: 10 Years.
  • Interest Deductibility: The ability to deduct the mortgage interest as an expense is being phased out, meaning an increased tax bill.
  • LVR (Loan to Value Ratio): Banks/Lenders may lend up to 60%.
  • Deposit requirement: 40%.

How can we help?

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