In a display home leaseback, you buy a builder’s display home and the builder leases it back for a set period, usually a few years, paying rent while it is used as a display. When the lease ends, you rent it out, live in it or sell. Lenders finance them, but the value at the end of the lease is the main risk.

Display home leaseback at a glance
Stage What happens
Purchase You buy the home, usually at or near a new home price
Lease term The builder pays rent and usually most outgoings
End of lease The home is returned, often with display fittings removed
After Rent it, live in it or sell

Why do investors buy display homes?

A guaranteed tenant for the lease term, rent paid by a business rather than a household, and often fewer outgoings. The homes are new, which matters for depreciation and, potentially, for the 2026 tax changes.

How do lenders treat a leaseback?

Most lenders treat it as a residential investment with a commercial-style tenant. They value the home and count the lease rent, usually after their standard reduction. Some check the builder’s strength, because the rent depends on it. A lease in a display village, with the home used as a business premises, can make some lenders more cautious, so check before you sign.

What is the valuation risk?

Display homes are often priced as finished, upgraded new homes. By the end of the lease, the home is several years old, has had heavy foot traffic, and may sit in an estate where newer homes are being built. If the market value then is lower than the price you paid, you take that loss on resale or in your equity. Ask what happens to display furniture, signage and any office space at the end.

What about tax and the new build rules?

Under the 2026 changes, a new build cannot have been previously sold unless the builder first owned it and it was not occupied for more than 12 months. A display home owned by the builder and bought by you from the builder may therefore count as a new build, keeping negative gearing, subject to the final definition. Rent and outgoings are treated like any investment property. Confirm with your tax agent; see negative gearing changes.

What should be in the lease?

  • The rent, how it increases and when it is paid.
  • Who pays rates, insurance, maintenance and utilities.
  • The make-good obligations at the end, such as repainting and removing display features.
  • Options for the builder to extend.
  • What happens if the builder fails during the lease.

A worked example

An investor buys a display home in a new estate in Sydney’s north-west with a three-year leaseback. The lender counts the builder’s rent and lends against the valuation. At the end of the lease, the estate is complete and newer homes nearby sell for a similar price, so the investor rents the home to a family. Had the estate been oversupplied, the value could have been lower than the purchase price.

Questions people ask

Is a display home leaseback a good investment?

It can give secure rent for a few years. The main risk is the value at the end of the lease compared with what you paid.

Can I live in a display home I buy?

Not during the lease. After it ends, you can move in.

Do lenders count the builder’s rent?

Usually, as rental income from the lease.

Is a show home leaseback the same thing?

Yes. Display home leaseback, show home leaseback and model home leaseback all describe buying a builder’s display home that the builder rents back for a set term.

Charles Touma checks how a lender will value a display home and count its lease before you commit. A free 30-minute call covers it. General information only, not credit, tax or financial advice; every loan is subject to the lender’s assessment.

Sources: Budget 2026-27 tax explainer, new build definition; ATO, negative gearing and capital gains tax reform, checked 18 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.