Upsizing Your Home? Your Adventure Awaits.
Something has been coming up more and more in our client conversations lately, and I think it’s worth sharing more broadly.
The way people are approaching property investment appears to be shifting. And not in a minor way.
For much of the past decade, the playbook was relatively straightforward: Buy a property, hold it, let it grow, leverage the equity, repeat. Negative gearing softened the tax impact along the way, and capital growth did a lot of the heavy lifting.
That environment is changing.
From 1 July 2027, negative gearing on established residential properties purchased after 12 May 2026 will no longer be deductible against salary or other income. Eligible new builds remain exempt, investors can still access both negative gearing and the CGT discount on qualifying new properties. And on top of that, the 50% CGT discount is being replaced with cost base indexation and a 30% minimum tax on net capital gains from 1 July 2027.
These are meaningful changes. And they’re prompting a genuine rethink among the investors we work with.
The common thread in those conversations? Being proactive rather than waiting.
Two approaches we’re seeing clients explore:
1. Adding value through renovation.
Rather than waiting for the market to do the work, a growing number of clients are making strategic improvements to existing properties, converting two bedrooms into three, adding living space, or building a secondary dwelling.
When the property is revalued, it’s now assessed as a larger home with comparable sales to match. That increased equity can then be borrowed against to fund the next purchase, and the process repeats.
NAB data shows renovation loans have increased 21% in the past year, with lending for improvements to existing dwellings up 15% in 2025, underscoring a clear tilt toward value-add renovation strategies.
This is something we’re actively helping clients structure the finance around, and where it’s helpful, connecting them with builders and renovation professionals from our network.
2. Maximising yield from a single parcel of land.
The second approach involves exploring multiple income streams from one property – granny flats, studios, secondary dwellings.
The Housing Industry Association expects granny flat builds to jump tenfold by 2026 compared to four years ago, with NAB renovation loans up 21% as Australians turn backyards into income assets.
The appeal is straightforward; The potential for two or three income streams from one title, while sharing the costs of council rates, water, and land tax across the one property. In regional areas where land is more accessible, some clients are exploring this as a way to support a stronger yield position.
As a general illustration only, and keeping in mind that figures vary significantly depending on location, property type and market conditions, typical weekly rents for granny flats in 2026 range from $350 in regional areas to $850 in inner-city Sydney suburbs.
A note on all of this.
These are personal observations based on what we’re seeing with clients, not a recommendation for anyone’s specific situation. The tax changes in particular are complex, and I’d always encourage anyone thinking about their investment strategy to speak with their accountant and financial planner alongside their broker.
What I can say with confidence is that the finance side of these conversations has become more nuanced, and that having a broker who understands the full picture, not just the loan, matters more than it used to.
If any of this resonates with your situation and you’d like to talk through the finance side of things, feel free to reach out or drop a comment below.
This reflects Vache Vartanian’s personal observations and views only. Not financial or investment advice. Always seek independent financial, tax and investment advice before making investment decisions. Subject to lender assessment and individual circumstances.
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