Cost to build a duplex:
the plan against the build.

The cost to build a duplex, for one couple in the Hunter region of NSW, came to about $1.24 million for the land and both homes. That is within 1 per cent of the plan made before they signed. Both homes are now leased, for more rent than the plan assumed.

How much did it cost to build this duplex?

In early 2025 the couple bought a block of land and signed to build two attached homes on it, four bedrooms each, side by side, on one title. Before they signed, we modelled their own numbers. That showed what the rent would pay, what tax would return, and what would be left for them to carry each week.

The only change to the build price was one item agreed before signing, and nothing was added during construction. The build came in at the contract price. Holding costs during the build, the inspection and insurance are not in either figure.

The as-built weekly figures are an MRD estimate, worked the same way as the plan: the same joint income, the same allowance for vacancy, and today’s rent, interest and running costs. Three inputs stay as the plan had them until the paperwork arrives: council rates and water, maintenance, and the depreciation of fittings, which waits on a quantity surveyor’s schedule. One loan rate comes from the latest bank statement. With no fittings depreciation at all, the after-tax figure would sit close to even.

How long did it take to build?

The land settled in March 2025. Council approved the two homes in mid-2025, and the build reached practical completion in August 2026, about 17 months after the land settled. The occupation certificate followed in September 2026, the keys were handed over that month, and both homes were leased from October 2026.

Two titles from one

Strata titling was part of the build, inside the contract price, and council approved the two homes with a two-lot strata subdivision. Strata title gives each home its own title, so each can be sold, refinanced or kept on its own. Registration is still to come, expected about three months after handover in September 2026.

Before the build, three bank valuers each made the same point in their own words. Two homes on one title are worth less than the same two homes on separate titles. One reason is plain: a buyer cannot buy one on its own. Once registered, the two homes stand on titles of their own.

When the interest-only period ends

Both loans run for 30 years, interest only for the first two. From about March 2027 they switch to principal and interest over the 28 years left, and the repayments rise by about $1,200 a month, close to $280 a week. That extra pays the debt down, so it is not lost. It is still cash out each week, and it is not tax deductible. At today’s rent and rates, it would take the pair from about $105 a week ahead after tax to about $170 a week out of pocket (MRD estimate). A plan that only looks at the interest-only years misses this.

When that day comes, the couple have three broad choices.

• Paying it down. They let the loans move to principal and interest, and the debt starts to fall.
• Extending interest only. They apply for a further interest-only period, with their lender or another. That depends on the lender’s rules and on what they qualify for at the time.
• Using the offset. If a further interest-only period is approved, they build up cash in the offset accounts attached to the loans instead of paying the debt down. Money in an offset reduces the interest charged, yet stays theirs to use, for a deposit on the next property, for example.

Which suits depends on the rest of their position. Interest on a rental loan is usually tax deductible; interest on a home loan is not. So a dollar off a home loan saves more after tax than a dollar off a rental loan. Someone who rents where they live and owns where they invest has no home loan to pay down. That is a question for their accountant and lender, with their own numbers.

Is it worth building a duplex?

For this couple, on the MRD estimate, the pair carries itself after tax in its first year, at a cost close to the plan and with more rent than planned. Some of the picture is still to come. Both loans switch to principal and interest in March 2027, and the weekly position changes with them. No valuation was done on completion, so there is no figure for what the homes are worth today.

The land was bought and the build signed in early 2025, well before 7.30pm AEST on 12 May 2026, so the pair keeps full negative gearing under the law passed in June 2026 for as long as it is held. Its fittings are new, so they can be depreciated. The four dates behind that rule are set out in the capital gains tax changes timeline.

Whether a duplex suits someone else turns on their own income, their own land, and what they could carry if rates rose. A property check runs those numbers for a home before you sign.

Working that out for a property you hold, or one you are looking at, is the work I do with people. The first conversation costs nothing.

Nicholas Lockhart

Figures: MRD Property Investment Analysis, 19 December 2024 (an MRD estimate, not a forecast); rental appraisal, 17 December 2024; the couple’s settlement, contract, loan, lease and running-cost figures, October 2026; MRD estimate of year one on those figures, 19 October 2026, at 2026-27 tax rates; council approval, 2025; builder’s correspondence on strata, 2025 to 2026; bank valuers’ comments, February to March 2025; Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49 of 2026).

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