New or Established Property? THIS Equation Could Help You Choose

(Webinar) New vs Established Property: What Should You Buy in Today’s Market? - Tuesday, 28 July @ 7:30PM 👉 www.thepropertycouch.com.au/registernow

With the government’s new tax settings encouraging investors towards new property, one big question is starting to dominate the conversation:

Does a better tax benefit automatically make a new property the better investment?

In this special Tuesday episode, Ben breaks down the equation every property investor should consider before choosing between a new build and an established property.

Because while tax savings can make an investment look attractive today, they are only one part of the bigger picture.

Free Stuff Mentioned: New vs Established Property Webinar

Want Ben to unpack the numbers, historical performance and trade-offs in more detail? Join the free live webinar:

📅 Tuesday, 28 July 2026
🕢 7:30 pm AEST

Register here:
https://thepropertycouch.com.au/registernow/

Places are limited, so make sure you register early.

Timestamps

00:36 – Should tax savings influence your property choice?
00:56 – The property investment equation explained
01:32 – What happens to carried-forward property losses?
02:25 – Comparing two $800,000 investment properties
02:51 – New property vs established property growth
03:17 – Can tax benefits make up for lower capital growth?
04:30 – How to compare total property investment returns
05:33 – When buying a new property can make sense
07:07 – Property market risks, supply and oversupply
07:24 – Free suburb research and property data in Moorr

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Transcript

SPEAKER_00 0:00

G'day Couchers, Ben here, and it's actually a live Tuesday show. That's right, I'm recording live on the Tuesday. Um, and I'm talking about the tax system because effectively the Labour Party is now encouraging property advice and they want investors to buy new property. But the question is does that make new property a better investment compared to established residential property? It's an interesting question, and it's interesting that the government is now becoming property investment advisors. Anyway, the real question should be this how much investment quality should an investor surrender in order to receive a tax advantage? Because most of the data will show that where these new properties are being built, that there's no scarcity of land, uh, there's no risk, there's a strong risk of oversupply. So I put together a little equation for you to help you think about this particular formula, and it should be helpful for you. So think about it like this after tax wealth creation is equal to capital growth plus net rental income plus net tax benefits, less any interest we're paying on our mortgage, less any ownership costs, less any transactional costs, less any capital expenditure, and of course, if we sell that property, less any exit costs or capital gains tax as we know them to be to be had. Now, of course, as Bryce and I taught you and many a time, and all of our couch crew these days that you get to meet, if you don't choose to exit the property, in other words, you hold on to it, then also remember that under the new settings, yes, the the treatment of negative gearing, which is just a made-up concept where you can offset the rental income that you're getting from the investment against any salary or wages income, has been stopped. But it doesn't mean that any of the carried forward losses aren't able to be a tax benefit that you get later on. So once that property moves into positive cash flow, so you go through the peak, you pay down the debt, it starts to produce positive cash flow. Then ultimately you can then start to claim the tax benefit as you move into that phase of that investment. So for example purposes, I've ripped up this little example, a ripped up or whipped up. Let's uh let's say whipped up, um, this little example purely for illustration purposes, not a not a forecast, just for illustration purposes. So I've got $800,000 to invest in a new property, and it grows at 4% over 10-year period. So approximately the uh the value of that property will be $1.18 uh 4 million. So, and that will obviously be at the end of that 10 years, and I s I also then get to choose another $800,000 property, and that's growing at 5.5% because potentially I've got a better bit of dirt in a better location, so it's growing, it's in a more established area. So over that time period the property is now worth $1.367 million. So that's a difference of $182,000. Did the new property produce enough additional tax savings, rental and maintenance savings to overcome the loss of the hundred and eighty-two thousand in capital growth? So that's the capital growth gap. And that's only in the first decade of ownership. The real compounding returns, as most of us will know, comes when we hold the properties for multiple decades and we live off the passive income, but we also enjoy the future land appreciation and capital growth. Because remember, when we break down the inclusions of the asset that we own, the land depreciates, and the buildings or improvements technically depreciate. And so you might call them a liability over time as they depreciate. So we always want to focus in on getting that land portion correct. But it's not just the size of the land, it's also the location of the land as part of the land to asset ratio formula that we talk about here a lot on the podcast. So think about that. Let's come back to the formula. Does the after tax wealth created is equal to capital growth plus rental return plus tax benefits, less interest, less holding costs, less any exit or capital gains stocks of play? Because if you choose the right asset, that is going to ultimately be the better performer over time. So the question really does become: what are you willing to sacrifice in terms of capital growth compared to a tax benefit? Because it doesn't quite make sense, does it, that you would put a tax benefit before the ultimate return on investment that you're looking for? Now, this question I will be unpacking in a lot more detail as part of an upcoming webinar where I'm talking about new versus established. Which property should I buy today under these new tax settings? Obviously, we're going to go deeper in terms of some of the historical performance. We'll challenge what the new sprukers will tell you is worthwhile doing, and we'll also talk about the fundamentals in which you need to understand what variables, what things do you need to consider. And we're also not necessarily going to end up with a result that says all new is bad. Um, we're going to also start to talk about where new might make sense as well as part of this webinar that I'm doing next Tuesday. So it will be a jam-packed agenda, which is going to happen next Tuesday night, the 28th of July at 7.30 p.m. Australian Eastern Standard Time. And you can register for that right now by going to the propertycouch.com.au forward slash register now. Um and we do cap it at a thousand registrations and attendees. And the last couple we've we've registered over 1,400 people turning up for those. They are very popular, these live webinars, and I love doing them because all it is is about making you a smarter investor. So make sure you register today. Also, as I said, I'm doing a bit of a live one, and we've done on Tuesdays, we've done Throwback Tuesdays and TPC Golds. But I'm going to start doing some more, and our team is going to start doing some more data dives around property and what's happening in a property market. So why not in the show notes here? If you've got any requests for any type of data that you want to look at when it comes to residential property, give us a shout-out, give us a request, and we'll put it into our program and scheduling in upcoming Tuesday episodes. So we'll start to unpack more of our intelligence so you can get smarter about what's happening in the capital city markets, suburbs within those capital city markets, regional markets, and where the risk is, listings, oversupply, undersupplies, we will start to unpack that. And don't forget, our More platform does have lots of new rich property data on there that you can also do further investigations yourself. We love to share our data. So if you're not familiar with the Moore platform, download the app and also go onto the web app, and that is free to access for you to take a look at. Okay, so there it is. I want to talk more about this developing topic and get people's psychology right, investment psychology right. Is it better to get a tax return, a better tax return, or is it better to get a better overall investment? And so that's what today's episode is about, and that's what the upcoming webinar is going to unpack for you in more detail. And uh we've got an exciting episode coming up also on Thursday, this Thursday, where we take a little bit of diagnosis into the data. I've got uh Luke and Polly joining me, and there we're going to be talking about what we've seen in the first six to eight weeks uh in terms of the market data and what people are doing and the behaviours off the back of these tax hikes. They're not reforms, they're tax hikes uh that the Labour government have introduced. So thanks for watching, and remember knowledge is imparent, but I'm if you act on it. Bye for me.

SPEAKER_01 8:40

Hey folks, Opty here, your Smart Money Cidekick Inside More. Just one quick thing before we sign off. If you're new to the property couch community, welcome. One quick tip to help you get the most value from the show. Our first 20 episodes cover the foundations we build on every week. And yes, listening on one and a half speed is totally acceptable. If you're short on time, download our free binge guide. It distills those episodes into one easy read with heaps of visual diagrams, alongside free tools inside more, your all-in-one financial home, to help you organize your money and plan your next best move. Check out all the links in our show description. And just a quick reminder before you go anything we cover on this podcast is general in nature. It's not considered to be financial advice, and we certainly recommend that you seek out professional advice before making any financial decisions. Once again, everything mentioned is linked in the show description. Ready when you are. Catch you next week.