IMPORTANT DISCLAIMER: The following is NOT TAX ADVICE. We are not accountants. This content is for educational purposes only, intended to provide a better understanding and help you ask more informed questions. You should consult YOUR INVESTMENT-SAVVY ACCOUNTANT about the pros and cons for your unique circumstances.

For first-home buyers in South East Queensland, the current property market presents a confusing paradox. On one hand, the Queensland Government is offering a generous $30,000 First Home Owner Grant (FHOG) and significant stamp duty concessions, making the dream of homeownership seem closer than ever . On the other hand, soaring property prices mean this financial assistance often only applies to new builds in outer-fringe suburbs, forcing buyers to compromise on location.

This has created a major strategic dilemma: should you take the grant and buy a new home where you can afford, or should you forfeit the grant, continue renting in your desired lifestyle location, and invest elsewhere? This is the core of the rentvesting vs. first home buyer grants debate.

This article provides a comprehensive comparison of these two powerful strategies. We will break down the numbers, analyse the pros and cons, and provide a clear framework to help you decide which path is right for your financial future and lifestyle goals.

Understanding the 2026 Queensland First Home Buyer Incentives

Before comparing strategies, it is essential to understand the government incentives available. As of early 2026, Queensland first-home buyers have access to two primary benefits, each with strict eligibility criteria.

The $30,000 First Home Owner Grant (FHOG)

The Queensland Government has extended the boosted $30,000 FHOG for contracts signed up to 30 June 2026 . After this date, the grant is scheduled to revert to $15,000. This grant provides a significant upfront cash injection for eligible buyers.

However, the grant comes with a major condition: it is only available for the purchase or construction of a new home. This includes a house, unit, duplex, or townhouse that has not been previously occupied or sold as a place of residence .

First Home Concession (Stamp Duty)

Alongside the grant, Queensland offers a transfer duty (commonly known as stamp duty) concession for first-home buyers. For homes valued under $800,000, first-home buyers can receive a full or partial concession, potentially saving tens of thousands of dollars . Unlike the FHOG, this concession can apply to both new and established homes, but the value of the concession is higher for new builds.

Here is a summary of the key eligibility requirements for these incentives:

Incentive	Key Eligibility Criteria	Value	Property Type	Price Cap
First Home Owner Grant (FHOG)	Must be a new build, never previously occupied.	$30,000	New Home	< $750,000
First Home Concession (Stamp Duty)	Can be a new or established home.	Varies (up to $18,700+)	New or Established	< $800,000

These incentives are designed to stimulate new construction and make homeownership more accessible. However, the price caps and new-build requirements create significant limitations, especially in the competitive SEQ market.

The Dilemma: The Grant’s Golden Handcuffs

The $30,000 grant and stamp duty savings are incredibly appealing. For a $750,000 new build, the combined benefit could exceed $50,000—a life-changing sum for a first-home buyer’s deposit. However, this assistance often acts as a pair of “golden handcuffs,” locking buyers into a specific type of property in a specific type of location.

Finding a new house-and-land package under $750,000 in established, inner-to-middle ring suburbs of Brisbane, the Gold Coast, or the Sunshine Coast is nearly impossible. As a result, buyers are pushed towards high-supply, outer-fringe growth corridors. While these areas offer affordability, they often lack the scarcity and established infrastructure that drive long-term capital growth. This is reflected in rental market data; as of January 2026, the vacancy rate in a growth corridor like Ripley (postcode 4306) was approximately 3.5%, whereas Brisbane’s inner-city (postcode 4000) was tighter at around 2.5%, indicating stronger rental demand closer to the CBD .

This is where the strategy of rentvesting emerges as a powerful alternative.

The Case for Rentvesting: Forfeiting the Grant for a Better Investment

Rentvesting involves renting in your desired lifestyle location while purchasing an investment property in an area with high growth potential and strong rental yields. By doing this, you forfeit your eligibility for the First Home Owner Grant (as you are not buying a home to live in), but you gain complete freedom of choice.

Key Advantages of Rentvesting:

•Separating Lifestyle and Investment: You can continue renting in a vibrant inner-city suburb or a quiet beachside community that suits your lifestyle, without your investment decisions being tied to where you live.

•Access to the Established Market: You are not restricted to new builds. You can purchase an established property with unique character, in a supply-constrained suburb with proven long-term growth drivers.

•Wider Geographic Choice: Your investment property can be anywhere in Australia—a high-yield regional city, a high-growth metropolitan suburb, or an emerging infrastructure hub. You can chase the best returns, not just the best government incentives.

•Potential for Superior Capital Growth: Established properties in desirable, land-locked suburbs often outperform new builds in master-planned estates over the long term due to the principle of scarcity.

•Tax Benefits: As a property investor, you can claim deductions for expenses such as mortgage interest, council rates, maintenance, and property management fees. These benefits are not available to owner-occupiers.

The Core Trade-Off: With rentvesting, you sacrifice the immediate, guaranteed cash injection of the FHOG in exchange for the potential of higher long-term capital growth and greater flexibility.

Head-to-Head: Rentvesting vs. First Home Buyer Grants

Let’s compare the two strategies across the factors that matter most to first-home buyers.

Feature	Using First Home Buyer Grants	Rentvesting Strategy
Upfront Financial Benefit	High. Receive $30,000 cash plus stamp duty savings.	None. You forfeit all first-home buyer grants and concessions.
Property Type	Restricted. Must be a brand-new home.	Unrestricted. Can purchase new or established properties.
Location Choice	Limited. Generally restricted to outer-fringe growth corridors to meet price caps.	Unlimited. Can invest anywhere in Australia based on research and strategy.
Lifestyle Outcome	Compromised. You must live where you buy, which may be far from work or desired amenities.	Flexible. Continue renting in your ideal lifestyle location.
Wealth Creation	Relies on capital growth of a new build in a potentially high-supply area.	Relies on capital growth and rental yield of a strategically chosen investment property.
Tax Implications	No tax deductions on mortgage payments or property expenses.	Eligible for numerous tax deductions, including negative gearing.
Best For	Buyers who prioritise the emotional security of owning their own home and are happy to live in a growth corridor.	Buyers who prioritise long-term wealth creation, lifestyle flexibility, and are comfortable renting.

Financial Modelling: Does Forfeiting $30,000 Make Sense?

Let’s consider a simplified scenario. A first-home buyer has a deposit of $100,000.

Scenario A: Using the FHOG

•Purchase: A new house-and-land package in a growth corridor for $740,000.

•Upfront Assistance: $30,000 FHOG + ~$18,000 stamp duty saving.

•Total Benefit: ~$48,000.

•Capital Growth: Assume an average of 4% per annum due to high supply.

•After 5 Years: The property could be worth approximately $890,000 (a gain of $150,000).

Scenario B: Rentvesting

•Purchase: An established house on a good block of land in a middle-ring, supply-constrained suburb for $740,000.

•Upfront Assistance: None. The buyer pays full stamp duty (~$25,000).

•Capital Growth: Assume an average of 6% per annum due to scarcity and location.

•After 5 Years: The property could be worth approximately $990,000 (a gain of $250,000).

In this simplified model, the rentvestor is $100,000 better off in terms of capital growth after just five years, easily covering the initial $48,000 in forfeited grants and concessions. Furthermore, the rentvestor would have also claimed tax deductions on the investment property throughout this period, increasing their net financial position even further.

While this is a simplified example, it illustrates a crucial point: the long-term performance of the asset is far more important than the upfront cash incentive.

Real-World Example: Sarah’s Choice in Brisbane

To bring this to life, let’s look at a common scenario we see at IPS Buyer’s Agents.

Client Profile: Sarah, a 28-year-old marketing manager, was renting an apartment in New Farm for $600 per week. She loved the inner-city lifestyle but was priced out of buying there. With a healthy $120,000 deposit, she was determined to enter the property market in 2026.

The Dilemma:

1.Option A (The Grant): Use the $30,000 FHOG to buy a new four-bedroom house-and-land package in a growth corridor like Ripley for $730,000. She would have to move there, adding a significant commute to her CBD job.

2.Option B (Rentvesting): Forfeit the grant, continue renting in New Farm, and use her deposit to buy an established investment property in a suburb with better growth drivers.

The Strategy and Outcome:

After a strategy session with IPS Buyer’s Agents, Sarah chose to rentvest. She forfeited the $30,000 grant and purchased a 15-year-old, 3-bedroom townhouse in a quiet, well-maintained complex in Cannon Hill for $720,000. The suburb was chosen for its strong transport links, proximity to the CBD, and limited supply of similar properties.

Here is how the numbers stacked up in the first year:

Metric	Details
Lifestyle	Continued renting in New Farm, enjoying her existing lifestyle.
Investment Property	$720,000 established townhouse in Cannon Hill.
Rental Income (from investment)	Leased for $650 per week ($33,800 p.a.).
Net Position	The rental income covered most of the mortgage and expenses. After claiming tax deductions for interest, body corporate fees, and management costs, Sarah’s holding cost was minimal.
Capital Growth	The Cannon Hill property, being in a desirable and supply-constrained middle-ring suburb, experienced stronger capital growth than the new build in Ripley would have.

By choosing to rentvest, Sarah maintained her desired lifestyle, entered the property market with a high-quality asset, and positioned herself for superior long-term wealth creation. The forfeiture of the $30,000 grant was a strategic sacrifice for a much greater potential upside.

Who Should Take the Grant? And Who Should Rentvest?

The decision is deeply personal and depends on your priorities.

You Should Seriously Consider Taking the First Home Owner Grant If:

•The emotional security of owning the home you live in is your number one priority.

•You have found a new build in a location you genuinely love and want to live in for the next 5-10 years.

•You are uncomfortable with the idea of being a landlord.

•Your borrowing capacity is limited, and the $30,000 grant is the only way you can enter the market.

You Should Seriously Consider Rentvesting If:

•You are priced out of buying an established home in your desired lifestyle location.

•You prioritise long-term wealth creation and are willing to play the long game.

•You are comfortable with the idea of renting for the medium-to-long term.

•You want to build a property portfolio and take advantage of investor tax benefits.

Decision Framework: A Step-by-Step Guide to Making Your Choice

To make a confident decision, follow this structured process:

Step 1: Define Your Lifestyle Priorities. Be honest about where you want to live. If living in a specific inner-city or coastal suburb is non-negotiable for your happiness and career, rentvesting is likely the superior path. If you are happy to live in a growth corridor and value the security of homeownership above all else, the grant becomes more attractive.

Step 2: Get a Clear Understanding of Your Borrowing Capacity. Speak to a mortgage broker to understand your borrowing power for both an owner-occupier loan (with the grant) and an investment loan (without the grant). This will define your true budget for each scenario.

Step 3: Research Potential Locations for Both Scenarios. Identify the suburbs you would be buying in if you took the grant versus the suburbs you could invest in as a rentvestor. Compare their long-term growth prospects, infrastructure, and rental yields. An IPS Buyer’s Agent can provide detailed suburb reports and market analysis to support this research.

Step 4: Model the Financial Outcomes. Work with a financial advisor or use online calculators to model the potential five- and ten-year outcomes for both scenarios, factoring in capital growth, rental income, tax benefits, and the initial grant money. The numbers will often reveal a clear winner.

Step 5: Make a Confident Decision. Once you have clarity on your lifestyle needs and the long-term financial implications, you can make a decision that you are confident in, free from the fear of missing out.

FAQs: Rentvesting vs. First Home Buyer Grants

Here are answers to the most common questions we receive from first-home buyers weighing these two options.

Q: Can I use the First Home Owner Grant to buy an investment property?

A: No. The Queensland First Home Owner Grant has a strict owner-occupier requirement. You must move into the new home within one year of the completed transaction and live there continuously for at least six months to be eligible . Attempting to claim the grant for a property you intend to rent out immediately is considered a breach of the grant conditions and can lead to significant penalties.

Q: If I rentvest first, can I still get the First Home Owner Grant later?

A: No. Once you have owned any residential property in Australia, you permanently lose your eligibility for the First Home Owner Grant in Queensland . This is a critical factor to consider. By choosing to rentvest, you are making a permanent decision to forfeit the grant in favour of an alternative investment strategy.

Q: How do banks view rentvesting compared to buying with the FHOG?

A: Lenders assess rentvesting applications more conservatively than owner-occupier loans. They will scrutinise your borrowing capacity and require a larger deposit (typically 20%) for an investment loan. When you use the FHOG, lenders may be slightly more lenient as the grant contributes to your deposit and reduces their risk. However, a well-prepared rentvesting application that shows strong rental income and serviceability is still highly likely to be approved by the right lender.

Q: Is it better to have a $30,000 grant or tax deductions from an investment property?

A: This depends on your financial situation. The $30,000 grant is a significant, immediate cash injection that helps with the initial purchase. The tax deductions from an investment property provide ongoing, long-term benefits by reducing your taxable income each year. As our financial modelling shows, the long-term financial benefits of capital growth and tax deductions from a well-chosen investment property often far outweigh the one-off grant payment.

Q: What if the property I buy with the grant has good capital growth?

A: It is certainly possible for a new build in a growth corridor to perform well. However, the investment fundamentals are often weaker than those of an established property in a land-locked, inner-to-middle ring suburb. New estates are prone to oversupply, which can suppress price growth for many years. The rentvesting strategy is about tilting the odds in your favour by investing in areas with proven, long-term drivers of growth.

Q: Can I use the First Home Concession for stamp duty on an investment property?

A: No. Similar to the FHOG, the First Home Concession for transfer duty is only available for your first home, which you intend to live in. If you buy an investment property first, you will have to pay the full rate of transfer duty applicable to investors.

Final Thoughts: Don’t Let a Short-Term Grant Dictate a Long-Term Strategy

The Queensland First Home Owner Grant is a powerful tool that has helped thousands of people into homeownership. However, it is not free money. It comes with conditions that can steer you towards a suboptimal long-term investment.

For many ambitious first-home buyers in SEQ, the smarter financial decision is often to ignore the grant. By focusing on asset quality and long-term growth drivers—scarcity, location, and infrastructure—rentvesting allows you to build wealth more effectively while enjoying the lifestyle you desire.

Making this decision requires careful analysis of your financial situation, risk tolerance, and long-term goals. A 15-minute, no-obligation strategy call with an expert buyer’s agent can provide the clarity you need to make the right choice.

Unsure if rentvesting or using the First Home Owner Grant is right for you?

Book a free 15-minute strategy call with the IPS Buyer’s Agents team to get personalised advice on your situation.

References

[1] Queensland Revenue Office. (2026). First home owner grant.

[2] Queensland Government. (2026). First home owner grant.

[3] Queensland Government. (2025). Extending the $30,000 first home owner grant.

[4] Queensland Revenue Office. (2025). Eligibility for the first home owner grant.

[5] Queensland Government. (2025). No stamp duty for first home buyers on new builds.

FINAL DISCLAIMER: The above was NOT TAX ADVICE. We are not accountants. This content is for educational purposes only, intended to provide a better understanding and help you ask more informed questions. You should consult YOUR INVESTMENT-SAVVY ACCOUNTANT about the pros and cons for your unique circumstances.