Buy the home, or buy the investment first? It's one of the most common questions we hear, and the honest answer is that each path buys you a different set of advantages. Here's the trade-off, laid out.
Buying your first home: the upside
- Grants and schemes. First-home buyers can access government grants, low-deposit guarantees and stamp-duty concessions that investors can't. The specifics change regularly and vary by state, so check the current programs — but the support is real and only available on a home you live in.
- The CGT exemption. Your main residence is generally exempt from capital gains tax, so growth on your own home is typically tax-free when you sell.
- Stability and equity. You stop paying rent, you build equity, and that equity can later help fund an investment purchase.
Buying your first home: the cost
- Lenders Mortgage Insurance if your deposit is under 20% (it protects the lender, not you).
- Upfront and ongoing costs — deposit, stamp duty, and the maintenance a renter never sees.
- Market risk — values can fall, and rate rises lift the cost of holding.
Buying an investment property first: the upside
- Rental income helps cover the holding costs, and good tenants can carry much of the mortgage.
- Tax deductions — interest, management, maintenance and depreciation, and negative gearing lets a shortfall offset your other income.
- The 50% CGT discount on the gain if you hold the property for at least 12 months.
- Rentvesting — buy where the numbers work while renting where you want to live.
Buying an investment property first: the cost
- CGT applies when you sell (unlike your own home), and selling inside 12 months forfeits the 50% discount.
- No first-home benefits — most grants and concessions are off the table, and that status can't be reclaimed later.
- Investor loans typically carry higher rates, and you take on management and maintenance.
So which comes first?
It depends on your deposit, your borrowing power, and whether renting where you want to live is cheaper than owning there. There's no universal answer — only the one that fits your plan. That's the conversation to have before you commit.
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Book a Clarity Call — It's FreeCommon questions
Should I buy a home or an investment property first?
It depends on your deposit, borrowing power and lifestyle. A home unlocks first-home grants and the CGT exemption; an investment earns income and deductions and can be chosen purely on numbers. The right first move is the one that fits your overall plan.
Can first-home buyers buy an investment property first?
Yes — some buyers 'rentvest' (buy an investment while renting where they want to live). Just note that buying an investment first generally means forgoing first-home grants and concessions, which can't be reclaimed later.
Do property investors get first-home buyer grants?
Generally no. Government grants, low-deposit guarantees and stamp-duty concessions are aimed at owner-occupiers buying a home to live in, not investors.
This article is general information only and doesn't take your personal circumstances into account. It isn't financial, tax or investment advice. Tax rules and lender policies change — confirm your position with a licensed professional or the ATO before making decisions.
