New Build vs Established · The 10-Year Numbers
New Build vs Established Property: A 10-Year Numbers Comparison
Two investment properties in the same area, both growing at 5% a year. One is a $750,000 established house, the other a $780,000 new build on land bought separately. Here is what happens to your cash flow, tax and equity over the next ten years.
By Stephen Lazar · properT network
Anyone can buy a property. Investing in one is different: the property has to work for you while you own it, not just when you sell it.
Most comparisons between new and established property start and finish with the purchase price and the expected capital growth. Both matter. But if two comparable properties grow at a similar rate, the more useful question is what each one does to your cash flow and financial position along the way, and whether that helps or hinders your next purchase.
To keep the comparison fair, both models below use the same 5% annual growth assumption. Nothing here relies on the new build growing faster. The figures are illustrative, taken from the cash-flow models in our New vs Established investor presentation.
| Starting point | Established | New build |
|---|---|---|
| Purchase price | $750,000 | $780,000 |
| How it is bought | Existing house | Land + separate build contract |
| Total acquisition cost | $800,527 | $805,412 |
| Year 1 rent | $33,124 | $35,672 |
Cheaper today does not automatically mean the better investment.
The Stamp Duty Difference
When you buy vacant land and sign a separate building contract, stamp duty is generally assessed on the land, not the construction cost. On an established house, it is assessed on the whole purchase price.
That does not make the new build $30,614 cheaper overall: total acquisition costs end up within about $4,885 of each other. What the duty saving can do is cover the interest while the home is built. On an approximately 12-month build at 6.5% interest-only, with the loan drawn in stages, build-period interest comes to about $28,500, leaving roughly $2,100 to spare.
We cover how this works step by step in Borrow More, Buy Better: The New Build Advantages Most Investors Miss.
Duty rules are state-specific. House and land packages bought on a single contract, apartments and other structures can be treated differently. Interest on the construction loan may be deductible during the build, while interest on the land loan generally is not (ATO: deductions for vacant land). Confirm both with your conveyancer and accountant.
Depreciation in Year 1
Depreciation is a non-cash deduction. It is not money from the government, but it can reduce your taxable income and therefore the after-tax cost of holding the property.
Established
- About $7,000 of Year 1 deductions
- Eligible capital works may still be claimable
- Previously used fixtures and fittings generally are not depreciable by a new owner
New build
- About $21,170 of Year 1 deductions
- $9,570 building depreciation
- $11,600 eligible fittings depreciation
That is a difference of about $14,170 in the first year. Over ten years, the model shows around $97,000 of tax benefit for the established property and $121,000 for the new build.
Why the Comparison Matters More Now
Negative gearing. From 1 July 2027, rental losses on established residential property bought after 7:30pm AEST on 12 May 2026 can no longer be offset against your salary. They can be carried forward and used against residential property income and gains instead. Eligible new builds keep negative gearing against other income, and properties bought before the cut-off keep the existing treatment.
Capital gains tax. The 50% CGT discount is being replaced with cost-base indexation and a 30% minimum tax on gains accruing from 1 July 2027. Owners of new residential dwellings can choose to keep the 50% discount instead, so this second reform also leans in favour of new builds.
In our model, the same property costs about $274 a week to hold under the old treatment and $446 a week under the new rules for established property. That is about $8,944 a year that you fund yourself while the tax benefit is deferred.
Because negative gearing still applies to eligible new builds, lenders can count it when assessing what you can borrow. In a broker case study presented in a Hotspotting webinar in October 2026, a household on $230,000 could borrow around $1,000,000 for a new build but around $820,000 for an established property. Ask your broker for both figures.
The modelled tax figures above use the supplied assumptions. They are not a forecast of individual tax outcomes after 1 July 2027.
What It Costs You to Hold Each Property
Neither property is cash-flow positive in these models. The difference is how much of your own money each one needs.
Over ten years, the established property needs about $29,254 more of your after-tax cash. Over twenty years, the gap grows to about $49,827.
That is not money you receive. It is money you do not have to put in, which means it can reduce debt, build a buffer, or help fund the next property sooner. Every dollar committed to supporting Property #1 is a dollar that cannot be used for something else.
Property #1 should help you
get to Property #2.
Where You Stand After Ten Years
With both properties growing at 5% a year, the established house reaches about $1.222 million and the new build about $1.271 million, simply because it started from a higher base.
Established · Year 10
- Value about $1.222m
- Loan $725,527
- Equity about $496,144
New build · Year 10
- Value about $1.271m
- Loan $727,412
- Equity about $543,125
That is about $46,981 more equity in the new build, while needing less of your own cash to get there.
The 10-Year Comparison at a Glance
| Investment driver | Established | New build |
|---|---|---|
| Purchase price | $750,000 | $780,000 |
| Total acquisition cost | $800,527 | $805,412 |
| Year 1 rent | $33,124 | $35,672 |
| 10-year gross rent | $379,728 | $408,939 |
| Year 1 after-tax cash flow | -$14,082 | -$9,730 |
| Year 10 after-tax cash flow | -$8,380 | -$6,593 |
| 10-year cumulative cash flow | -$116,329 | -$87,075 |
| Year 10 value | $1.222m | $1.271m |
| Year 10 equity | $496,144 | $543,125 |
Illustrative model outputs using the same 5% growth assumption for both properties. Not a forecast or promise of returns.
And at resale
Fast-forward ten years and the new build is ten years old, while the established house is twenty. Both may have grown at a similar rate, but you are not selling the same product. Newer design, fittings and energy efficiency can help with tenant and buyer appeal. That is not guaranteed, but it is worth weighing when you buy, not only when you sell.
New Is Not Automatically Better
An established property can absolutely be the right investment in the right location and circumstances, and where it is, we offer buyers advocacy to help you find it. The point of this comparison is not to tell every investor what to buy. It is to show why the numbers behind the decision matter.
At properT network, we start with you: your goals, your budget, the cash flow you can comfortably sustain, and your borrowing capacity. Then we find the property that fits. The aim is never to squeeze the wrong property into your budget.
For a broader look at the trade-offs, read Existing Homes vs New Builds, or see our house and land options in Melbourne.
Which Property Works Hardest for You?
Every investor’s numbers, tax position and goals are different. Book a complimentary strategy session and we will compare a new build and an established property for your situation.
- ATO, Claiming deductions for vacant land
- properT network, Borrow More, Buy Better: The New Build Advantages Most Investors Miss
- properT network, Negative Gearing Changes 2027: The Cash Flow Problem
- properT network, Existing Homes vs New Builds
- Broker case study presented in a Hotspotting webinar, October 2026
General information only, not financial, tax or legal advice. Figures are illustrative and based on the stated model assumptions. Stamp duty, tax and lending outcomes vary by state, lender and individual circumstances. Seek independent advice before making any investment decision.