A briefing on the closing window

From July 2027, only new builds can be negatively geared.

The May 2026 Federal Budget rewrites the tax position of every Australian property investor. Add Perth's $188 billion project pipeline and the tightest rental market in a decade, and the case for a new-build Perth investment has rarely been clearer or more time-sensitive.

The budget, in three dates What ends, what changes, and what survives.
12 May 2026 The clock starts Established properties contracted after 7.30pm AEST lose negative gearing access on 1 July 2027.
1 July 2027 New rules apply Established-home rental losses are quarantined. The 50% CGT discount is replaced with indexation and a 30% minimum tax. New builds remain exempt.
Get a free appraisal Run the numbers
The demand side

Why Perth, why now.

Western Australia is in the middle of an unprecedented project pipeline. Nearly $188 billion in major builds either under way or breaking ground in the 2026 to 2030 window. Defence, energy, transport, health. Each project draws thousands of workers into Perth metro for sustained periods. The labour comes before the housing.

Major project pipeline
$188bn
Combined value of WA major projects either commencing or progressing through the 2026 to 2030 window.
Perth rental vacancy
2.2%
Well below the 2.5 to 3.5% REIWA considers a balanced market. Rental supply remains structurally tight.
Perth house median rent
$700/wk
Record level reached late 2025, broadly stable through early 2026. Sustained tenant demand keeps pricing power with landlords.
The headline projects
Western Green Energy Hub
Renewables / Hydrogen
Late-2020s onward
$100bn
Australian Renewable Energy Hub, Pilbara
Renewables / Hydrogen
First power around 2029
$36bn
Woodside Scarborough Gas + Pluto LNG Train 2
Energy
First LNG 2H 2026
$12.5bn
Henderson Defence Precinct Expansion
Defence / Shipbuilding
Late-2020s into 2030s
$12bn
HMAS Stirling and SRF-West submarine upgrades
Defence
2027 onwards
$8bn
Westport, Kwinana Outer Harbour and supply chain
Transport / Logistics
Beyond 2026, long-dated
$7bn
Perth Airport new parallel runway and precinct
Aviation
Runway 2028, precinct 2030+
$5bn
Remaining METRONET packages
Rail
Ongoing post-2026
$2bn
New Women and Babies Hospital, Fiona Stanley
Health
Opens post-2026
$1.8bn
Bunbury Outer Ring Road
Transport
2026 to 2027
$1.25bn
Tonkin Highway extension and Thomas Rd upgrade
Transport
Operations post-2026
$1bn
bp Kwinana Energy Hub (H2 / SAF)
Hydrogen / Biofuels
Beyond 2026
$1bn
Joondalup Health Campus Redevelopment, Stage 2
Health
Completes mid-2026
$308m
Total pipeline value
$187.9billion
The supply side

Demand is rising. Supply is not.

2.2% vacancy

REIWA considers a balanced rental market to sit between 2.5% and 3.5% vacancy. Perth has been below that band for almost three years. After hitting 0.4% at the worst of the shortage in early 2024, vacancy has gradually risen to around 2.2 to 2.5% in 2026, still below balanced.

The number of estimated rentals across WA remains roughly 5% below the peak recorded in February 2021. Population growth, although slower than recent years, is still positive. New supply is coming through, particularly in outer corridors like Baldivis, Eglinton, Alkimos, Brabham and Yanchep, but not at a rate that keeps up with demand from the project pipeline.

Practical translation: well-presented homes in any reasonable location are still leasing within days, not weeks.

Where Perth sits today
0% Perth · 2.2% Balanced · 2.5 to 3.5% 5%

High demand. Tight supply. And one category of investment keeps both negative gearing and the new tax position after July 2027.

A side-by-side

Same block, same builder.
Twice the income.

A standard new build single dwelling is the obvious option. A dual key home is the option most investors don't realise is available to them. Both qualify as new builds under the announced tax rules. The difference between them is what the same patch of land produces.

Dual key home diagram: one title, fire-rated centre wall, two independent tenancies A diagram of a dual key home from above. One title contains two self-contained dwellings, a main residence and an ancillary, separated by a fire-rated centre wall. Each dwelling has its own front entry, garage and driveway leading to the street. Each is leased independently. ONE TITLE · ONE BLOCK · TWO TENANCIES Fire-rated centre wall the structural divide between dwellings Main · 4 bed · 2 bath Bed 1 / Master + ensuite, WIR Bed 2 · Bed 3 + bath Kitchen · Living · Dining + Bed 4 / study, laundry Entry · Garage 1 ENTRY 1 Ancillary · 2 bed · 1 bath Bed 1 + semi-ensuite Bed 2 + robe Kitchen · Living · Dining + laundry Entry · Garage 2 ENTRY 2 street frontage TENANCY ONE $800/wk · separate lease TENANCY TWO $650/wk · separate lease
A dual key home is two self-contained dwellings on a single title, divided by a fire-rated centre wall. Each has its own front entry, garage and driveway directly to the street. Each is leased as an independent residential tenancy.
I.
4 BED · 2 BATH
SINGLE DWELLING · $1.15M

Standard new build

A new build family home on a single title, leased to one household. The conventional Perth investment property.

Net yield
2.3%
Cashflow
−$603/wk

The capital-growth play. A new home leased to a single family on a standard residential tenancy. Straightforward to manage. Bleeds material cashflow pre-tax. The investor is paying to hold and relying on capital growth and tax depreciation to make the numbers work.

✓
Full new-build tax position Negative gearing retained beyond 1 July 2027. Full depreciation on building and fit-out.
II.
6 BED · 3 BATH
DUAL KEY · $1.15M

Dual key residential

Two self-contained dwellings on a single title, divided by a fire-rated centre wall. Each has its own front entry, garage and driveway. A 4-bed alongside a 2-bed, each on its own lease.

Net yield
4.8%
Cashflow
−$45/wk

The balanced position. Effectively cashflow-neutral after tax. Two independent income streams spread vacancy risk. Same builder, same envelope, two separate tenancies under standard residential law. No specialist compliance burden.

✓
Full new-build tax position Negative gearing retained beyond 1 July 2027. Full depreciation on building and fit-out.
The dual key generates around $29,000 a year more net income than the single-dwelling new build on the same block. That's the product story.
Next step A free appraisal on any block or package you're considering, with comparables from the last 30 days.
Annual net operating income comparison: standard new build versus dual key A bar chart comparing the annual net operating income from a standard single-dwelling new build at $26,500 against a dual key new build at $55,500 on the same Perth block, showing a $29,000 per year uplift. ANNUAL NET OPERATING INCOME · SAME BLOCK $20k $40k $60k $26,500 STANDARD NEW BUILD single dwelling · 2.3% net $55,500 DUAL KEY two tenancies · 4.8% net +$29,000 PER YEAR UPLIFT Both options on a $1.15M all-in cost base. Standard residential management. Pre-tax, before depreciation.
Annual net operating income from a Perth new build, leased as a single dwelling at $800 per week versus leased as a dual key at $1,450 per week across two tenancies. Same land, same builder, same envelope.

What's behind the numbers

Honest disclosure
Cost base$1.15m all-in. Land plus build, like-for-like across both options.
RentsStandard $800/wk, single tenancy. Dual key $1,450/wk total across two tenancies, based on recent comparables in the outer-Perth growth corridor.
Mortgage80% LVR, interest only at 6.3%.
Operating costsStandard residential management, rates, insurance, prudent reserves. No co-living or lodging-house overhead.
Tax positionPre-tax. Depreciation and negative gearing not modelled. Both materially improve the after-tax cashflow on a new build.
StatusIndicative figures only. Final returns depend on the property, suburb, market conditions, and tenant mix.
The new-build advantage

Four reasons a new build outperforms
an established home for investors.

Beyond the tax structure, new builds carry several structural advantages that compound over a holding period.

01

Full depreciation

New builds qualify for both capital works deductions (2.5% per year over 40 years on the building) and plant and equipment depreciation (appliances, fittings, fit-out). Established properties bought post-2017 face significant restrictions on plant and equipment claims.

02

Negative gearing retained

From 1 July 2027, only new builds can offset rental losses against other income. Every other residential investment contracted after Budget night has its losses quarantined to property income only.

03

Lower holding costs

A new home means no immediate capital works, no boiler replacements, no roof repairs, no kitchen tear-outs. Maintenance budgets in the first decade of a new build are typically a fraction of those for an established home of the same value.

04

Premium tenant pool

A new home with modern finishes, energy-efficient construction and current floor plans attracts a more reliable tenant cohort. Faster leasing, longer tenancies, lower turnover cost.

How investors typically fund this

You probably need less cash than you think.

Most of the investors we work with don't fund a Perth new build out of savings alone. Here's how the deposit usually comes together, in plain English. This is general information, not personal advice. Confirm any specific borrowing strategy with a mortgage broker who understands investment lending.

Path A · Standard deposit

Cash deposit, standard loan.

For a $1.15m all-in package, a typical investor borrows around 80% LVR ($920k) and brings the remaining 20% ($230k) plus stamp duty and acquisition costs (around $55k in WA). Total cash needed in: roughly $285,000.

20% deposit$230,000
Stamp duty + acquisition~$55,000
Cash required~$285,000

Lenders Mortgage Insurance (LMI) may allow a 10% deposit instead, lowering the cash-in but adding cost.

Path B · Equity release

Using equity in existing property.

If you already own property in Perth or elsewhere that has grown in value, your bank may let you borrow against that equity to fund the deposit and acquisition costs on the new build. The new build itself still carries its own loan, but the cash component can come from your existing portfolio rather than your savings account.

This is how a significant portion of Perth investors fund their second, third or fourth investment property. Your mortgage broker will look at total LVR across the portfolio, your serviceability, and the equity available in each property.

Worth asking your broker: useable equity, total portfolio LVR, serviceability headroom, cross-collateralisation risk.

If you don't have a mortgage broker who understands investment lending, we can introduce you to one of our trusted partners. No referral fee paid to us where the broker is independent. Where we do receive a referral, it's disclosed.

Get an introduction
A point most investors miss

Tax deductions start during construction, not after.

One of the lesser-known benefits of a new build is that several costs incurred during the 10 to 12 month build period are deductible against your other income in the year they're incurred, well before the property earns its first dollar of rent. This is general information, not tax advice. The Australian Taxation Office publishes specific guidance on what is and isn't deductible; a qualified accountant or registered tax agent can confirm your specific position.

01

Loan interest during construction

The interest on your land and construction loan, paid month by month while the home is being built, is generally deductible in the year it's incurred. On a $1.15m package this can amount to $30,000 to $50,000+ of deductible interest over the construction period, depending on drawdown schedule and rate.

02

Borrowing costs

Loan application fees, mortgage registration, valuation fees and lender's mortgage insurance (where applicable) are generally deductible over five years or the loan term, whichever is shorter. Each year a portion of these costs reduces taxable income.

03

Holding costs

Council rates, water rates and land tax on the block during construction are generally deductible holding costs, assuming the property is being constructed with the genuine intention of producing assessable rental income.

04

Depreciation, from settlement

Once the property is complete and available to rent, capital works deductions (2.5% per year over 40 years) and plant and equipment depreciation begin. A quantity surveyor's report in year one captures both.

The investor who claims their construction-period interest in the year it's incurred is often surprised by their tax position at the end of that first financial year, even before the property has earned any rent.
What this typically looks like in practice Order a tax depreciation schedule from a qualified quantity surveyor in your first year. We can refer you to a vetted partner. Your accountant claims construction-period interest and holding costs in the relevant tax year. From settlement, depreciation joins the deduction stack.

Deductibility depends on individual circumstances, the structure of the loan, the entity holding the property, and the timing of expenses. The Australian Taxation Office has specific rulings on what's deductible during construction and when. Confirm everything with a registered tax agent before lodging.

Self-selection guide

Is a Perth new build right for you?

No investment vehicle suits everyone. From watching investors succeed and fail with new builds over the years, the pattern is clear: new builds work best for a particular kind of investor. Here's the honest version.

✓

This probably suits you if…

  • You have a stable income above $120k that benefits from a tax deduction in a year when your marginal rate is high.
  • You already own one or more investment properties and can release equity from them to fund the deposit.
  • You have a 10 to 20 year holding view. New builds compound through tax benefits and capital growth, not quick flips.
  • You can comfortably hold the property at a moderately negative cashflow ($45 to $100 per week pre-tax) without that stretching you.
  • You want a set-and-forget investment with low day-to-day involvement, professional management, and a clear tax structure.
  • You're approaching peak earning years and want to lock in tax-advantaged investments before the tax window changes.
×

This probably doesn't suit you if…

  • You need positive cashflow from day one. A new build is a leveraged growth and tax-advantaged investment, not a cashflow play.
  • You're funding the deposit from savings you'll need in the next 5 years. Property is illiquid.
  • You can't service the loan if interest rates rise another 1 to 2 percentage points. Build a buffer or wait.
  • You're looking for "passive income" in the dividend sense. The cashflow profile during build and early years is not that.
  • You haven't spoken to a mortgage broker about your borrowing capacity. Start there, not here.
  • You haven't done a tax planning conversation with your accountant. The deductions only matter if your tax situation can use them.

This is a general framework based on patterns we've seen across many Perth investors over the years. Your situation is yours alone. Personal financial advice is the work of a licensed financial adviser, not a property manager. We can refer you to one if you don't already have a relationship.

How we think about this

A property manager who thinks about the investment, not just the rent roll.

Most property managers stop thinking the moment the bond is lodged. We don't, because we manage our own investment property, and we apply that same lens to every owner we work with.

When you work with us on a new build, you get a property manager who's read the builder's quote, knows what the depreciation schedule should capture, can tell you when the rent should be reviewed against market, can spot when a builder's rent estimate is optimistic, and will introduce you to the broker or accountant or quantity surveyor you need next.

We're not buyer's agents. We're not financial advisers. We're property managers with investment experience, and we'll tell you what we know.

An honest note

On the line between sharing market knowledge and giving financial advice.

A property manager can tell you what the market is doing, what rents are achievable, how a deal stacks up against comparables, and what other investors typically do in similar situations.

A licensed financial adviser is the person who can tell you what you specifically should do, given your income, assets, debts, goals, and risk appetite. They hold an Australian Financial Services Licence and carry professional indemnity for the advice they give.

We respect that line. We'll share what we know about the Perth market, the product, the tenant pool and the operational reality. We won't tell you whether to invest. If you don't have a financial adviser or accountant, we can introduce you to ones we trust.

Common questions

What investors are asking right now.

Most lenders look for a 20% deposit on investment property, which on a $1.15m package is around $230,000, plus another $50,000 to $60,000 for stamp duty and acquisition costs. So roughly $285,000 cash in. Some investors fund this from savings; many fund it by releasing equity from an existing property that has grown in value, which means the cash component doesn't have to come from your bank account. Lenders Mortgage Insurance (LMI) can allow a lower deposit but adds cost. Your specific borrowing capacity, useable equity and serviceability are conversations to have with a mortgage broker who understands investment lending. We can introduce you to one.
Yes, this is how a significant portion of Perth investors fund their second, third or fourth investment property. If your existing property (your home or another investment) has grown in value, your bank may let you borrow against the equity in that property to fund the deposit and acquisition costs on the new build. The new build itself still carries its own loan. The right structure depends on your overall portfolio LVR, serviceability, cross-collateralisation considerations, and tax structuring. A mortgage broker who specialises in investment lending is the right person to design this. This isn't financial advice; it's how the option commonly works.
Generally yes. Several costs incurred during the 10 to 12 month build period are typically deductible in the year they're incurred, before the property earns rent. These include loan interest during construction (often $30k to $50k+ on a $1.15m package over the build period), council and water rates on the land, land tax where applicable, and borrowing costs (loan fees, valuation, LMI) spread over five years. The ATO has specific rulings on what's deductible and when, and your eligibility depends on the genuine intention to produce assessable rental income. Confirm specifics with a registered tax agent before lodging.
From watching Perth investors over the years, new builds work best for: people with stable income above around $120k who can use the tax deductions, investors with existing equity to release from another property, those with a 10 to 20 year holding view, and investors who can comfortably hold the property at a moderately negative pre-tax cashflow. They don't suit investors who need positive cashflow from day one, those funding the deposit from short-term savings, or anyone whose serviceability would be stretched by a 1 to 2 percentage point rate rise. The right answer for you specifically is a conversation with a licensed financial adviser.
No to both. We're a residential property management agency. We don't sell property and we don't hold an Australian Financial Services Licence. What we do is manage Perth investment properties and, in the course of that, see a lot of investors succeed and fail. We're happy to share what we observe about the Perth market, the new-build product, achievable rents and the operational reality. Personal financial advice (whether you should invest, how much, in what structure) is the work of a licensed financial adviser. We'll refer you to one if you don't have a relationship.
Only if it's a new build. From 1 July 2027, the May 2026 Federal Budget announcements limit negative gearing on residential investment property to new builds only. Established homes contracted after 7.30pm AEST on 12 May 2026 lose access to negative gearing from that date, with rental losses quarantined and only offsettable against other property income. Properties held before that announcement are grandfathered and continue under existing rules. The changes are announced, not yet law, and apply to contracts entered into after the announcement. Always confirm your specific position with a registered tax agent.
A standard new build single dwelling in an outer Perth growth corridor typically delivers 3 to 4 percent gross yield and around 2 to 3 percent net. A dual key new build on the same cost base (two self-contained dwellings on one title) typically delivers around 6.5 percent gross and 4.8 percent net, generating roughly $29,000 a year more net operating income from the same land. Net cashflow on an 80% interest-only loan is meaningfully negative on the standard single dwelling and close to break-even on the dual key, before depreciation. Get a free appraisal for the specific numbers on any package or block.
Two reasons. One: Perth has approximately $188 billion in major projects either underway or commencing in the 2026 to 2030 window. Defence work at Henderson, the HMAS Stirling submarine program, Westport, METRONET, the Perth Airport runway, hospital builds, plus the renewables and LNG pipeline. Each project draws sustained labour into WA. Two: the rental vacancy rate sits around 2.2 to 2.5%, still below the 2.5 to 3.5% REIWA considers balanced. The number of estimated rentals across WA remains around 5% below the 2021 peak. Strong demand and constrained supply support both rents and low vacancy.
On the same Perth block, a dual key new build typically generates around $29,000 a year more net operating income than letting it as a single dwelling. The second self-contained dwelling produces an independent income stream that more than offsets the marginally higher build cost. Vacancy risk also halves because both sides falling empty at the same time is unlikely. Structurally, a dual key is one continuous build envelope divided by a fire-rated centre wall, with each side having its own front entry, garage and driveway. The two sides are leased as standard residential tenancies with no specialist compliance burden, and can be managed at standard residential rates.
Wherever we can secure suitable land. We work with a small number of trusted Perth builders who design and deliver dual key packages on land releases across the Perth metro, particularly through the southern, eastern and northern growth corridors. New packages come and go as land releases progress. The most reliable way to know what's available right now is to join the dual key mailing list (further up this page), or contact us directly with what you're looking for.
Yes. A new build contracted today retains full depreciation deductions on both the building (capital works at 2.5% per year over 40 years) and the plant and equipment (fittings, appliances, fit-out items). New builds also remain eligible for negative gearing beyond 1 July 2027 under the announced reforms. Established properties bought after May 2017 have significant restrictions on second-hand plant and equipment claims, and from 2027 lose negative gearing access on top. Order a tax depreciation schedule from a qualified quantity surveyor in your first year to capture the full benefit. We can refer you to a vetted partner.
No, not yet. The negative gearing and CGT reforms were announced in the 2026-27 Federal Budget on 12 May 2026. They are intended to apply from 1 July 2027. The legislation has not yet passed Parliament. That said, the policy intent is clear and the property industry is already pricing it in. Even in scenarios where the legislation is modified, the principle that new builds receive preferential tax treatment is consistent across both major parties because both want to incentivise new housing supply. The strategic answer (new build over established) survives almost any version of the eventual legislation. Confirm specifics with a registered tax agent.
Useful next reads

Related guides for Perth new-build investors.

If you're considering a new build investment in Perth, these are the tools and reading we'd point you to next. Free, hosted on our site, written specifically for Western Australian landlords.

The full landlord guide

Renting out a new build in Perth

Our 11-stage guide for landlords with a new build under construction. Defects, compliance, depreciation schedules, in-construction support, lease timing and tenant selection.

Read the guide
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The tax measures referenced are the 2026-27 Federal Budget announcements of 12 May 2026. Legislation has not yet been passed; the changes are intended to apply from 1 July 2027 and may be amended before becoming law. Yield, cashflow and uplift figures are indicative only, based on recent appraised rents in outer-Perth growth corridors, on an 80% LVR interest-only mortgage at 6.3%, and exclude depreciation benefits which may materially improve the after-tax position on a new build. Operating costs include management fees, rates, insurance and prudent reserves. The $188 billion project pipeline figure is the sum of headline announced values for the projects listed and is for illustrative purposes; project timelines, scope and value are subject to change. Perth vacancy rate is REIWA-reported and varies by month. Deposit and acquisition-cost figures are general guidance only; actual figures depend on the package, location, lender, LVR and individual circumstances. Equity release strategies, cross-collateralisation, lending structures, and serviceability are matters for a qualified mortgage broker. Tax deductibility during construction depends on individual circumstances, loan structure, the entity holding the property, and the genuine intention to produce assessable rental income; the Australian Taxation Office has specific rulings, and a registered tax agent must confirm any specific position. Content on this page is general market information and educational in nature. It is not financial, legal, tax, credit or investment advice and does not take into account your personal circumstances, financial situation, needs or objectives. Investors should obtain independent professional advice from a registered tax agent, licensed mortgage broker, and licensed financial adviser before making any investment, borrowing, or tax decision. Past performance is not a reliable indicator of future outcomes. Local Property Partners is a residential property management agency operating under the Real Estate and Business Agents Act 1978 (WA). We do not hold an Australian Financial Services Licence and do not provide financial product advice. We are not a buyer's agent or builder. Where we refer clients to third parties (brokers, accountants, quantity surveyors, builders, financial advisers), some arrangements may involve a referral fee paid to Local Property Partners; this will be disclosed at the time of referral. You are free to use any provider you choose. Mailing list subscriptions are managed via our website. We will only email you about new-build dual key opportunities and related investor briefings, and you can unsubscribe at any time. Triennial Licence No: RA85442. ABN 48 582 232 398.