Understanding Property Build Status

In property management and investment, the "status" of a building isn’t just a label—it dictates your tax strategy, insurance requirements, and maintenance responsibilities. PropKeeper uses three primary classifications to help you track these nuances.

1. Under Construction

This status applies to any property currently being built or undergoing major structural renovations that render it uninhabitable.

• Definition: From the moment the slab is poured until the Occupation Certificate (OC) is issued.
• Finance: Usually involves "Progress Payments" to the builder rather than a lump sum.
• Insurance: Requires a specific "Builder’s Risk" or "Landlord Construction" policy; standard residential insurance typically won’t cover a site under construction.
• Tax: Most holding costs (like interest on land) may need to be capitalized rather than claimed as immediate deductions, depending on current local tax laws.

2. New Build

A "New Build" is a completed property that has not been previously lived in or sold as a residential dwelling.

• Definition: A property is generally considered "New" for 6 months following the completion of construction, provided it has not been sold to a secondary owner or occupied as a private residence.
• Depreciation: This is the "Golden Era" for investors. You can claim maximum deductions for both Capital Works (the structure) and Plant & Equipment (removable items like ovens, carpets, and AC units).
• Warranties: Owners are covered by the builder’s Defects Liability Period (often 13–26 weeks) and statutory structural warranties (often 6+ years).
• First Home Grants: Many government incentives are strictly limited to this category.

3. Existing Dwelling (Established)

This is a property that has been previously owned and occupied. Most Australian residential properties fall into this category.

• Definition: Any property that is older than 6 months post-construction or has been lived in by a previous owner-occupier.
• Maintenance: Focus shifts from builder warranties to proactive maintenance and "Sinking Funds" for long-term repairs (e.g., roofing, plumbing).
• Tax Changes: Since 2017, investors purchasing "existing" properties generally cannot claim depreciation on previously used plant and equipment items, though capital works on the structure can still be claimed.
• Value: Often located in more settled areas with established infrastructure (schools, transport, trees).

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