House vs Apartment at $650,000: The $1,341 Strata Line That Decides It

Put a $650,000 house and a $650,000 apartment side by side in Victoria, renting for the same $550 a week. Before strata, Plintha's engine finds the apartment the cheaper one to hold. For an investor who bought after the 2026–27 Budget, that advantage is worth $1,341 a year. Any strata levy above that and the house costs less each week.

For an owner who still has the old negative gearing treatment, the break-even is $5,826 a year. The two properties are unchanged. The only difference is the tax treatment of the loss, and it changes how much strata the apartment can carry by more than four times.

Every figure below comes from Plintha's deterministic finance engine. The exact inputs are published alongside this post so anyone can re-run them.

The two properties

Both are established dwellings in Victoria, bought by an individual who owns no other land in the state.

• Price: $650,000 each, with stamp duty of $34,070 on either (same price, same duty)
• Rent: $550 a week each ($28,600 a year, a 4.4% gross yield)
• Loan: 80% LVR, interest-only, $520,000 at an illustrative 6.75%, so $35,100 a year in interest
• Marginal tax rate: 37%

Keeping the price and rent identical is deliberate. It leaves only the costs that come from the type of dwelling. A real house and apartment at the same price will rarely rent for the same amount, and the rent gap can outweigh everything below.

Where a house and an apartment differ

The engine splits the price into land and building differently for each. An established house is modelled as 65% land. An apartment owner holds only a small share of the site, so it is modelled as 18% land. That one assumption pushes three costs in opposite directions.

Land tax favours the apartment. Victorian land tax is charged on site value, and for an apartment that means the lot's share of the site. On the engine's split the house carries $422,500 of land and the apartment $117,000. The State Revenue Office's 2024–2033 schedule charges $975 on a taxable value between $100,000 and $300,000, and $1,350 plus 0.3% of the value over $300,000 in the next band. That puts the house at $1,718 a year and the apartment at $975, a gap of $743.

Maintenance favours the apartment. The engine bills upkeep as a share of the building: 1.2% for a house, 0.4% for an apartment, because the owners corporation looks after the structure. That gives the house $2,730 a year against the apartment's $2,132, a gap of $598.

Depreciation favours the apartment as well, but only for owners who still get a refund. The apartment's building is $533,000 of its price, against $227,500 for the house. At the 2.5% capital works rate (Division 43, per the ATO's rental expenses guide), the engine estimates $13,325 a year for the apartment and $5,688 for the house. Neither gets Division 40 plant deductions, because both are second-hand. We cover why in Division 43 vs Division 40.

Strata is the one cost that works against the apartment. The house has no levy. The apartment does, and the engine puts it at zero until you supply a figure, as you can in the product.

What strata does to the weekly cost

Strata varies too much between buildings to assume a single figure, so the engine was run at four levels. Weekly top-ups below are after tax and exclude land tax, which is listed separately.

Read across the "without it" row and add land tax back in. For a post-Budget buyer, the apartment with no strata is about $25 a week cheaper than the house. At $2,000 of strata it is $13 a week dearer, at $4,000 it is $52 dearer, and at $6,000 it is $90 dearer.

With the salary offset, the apartment stays ahead until close to the top of the range. With land tax included after tax, it is $46 a week cheaper at $2,000 of strata and $22 cheaper at $4,000. At $6,000 the two are within $2 a week.

Why the break-even moves from $1,341 to $5,826

Without a salary offset, the comparison is simple cash. The apartment saves $598 of maintenance and $743 of land tax. Together that is the $1,341 break-even. Depreciation does not change it, because the deduction produces no refund in the year it is claimed.

With the offset, three things change. The apartment's extra $7,637 a year of depreciation becomes a refund of $2,826 at 37%. Strata is deductible too, so each dollar of levy costs the owner 63 cents after tax. And the land tax and maintenance savings also shrink to 63 cents in the dollar. Put together, the apartment can carry $5,826 a year of strata before the house overtakes it.

The ATO lists body corporate fees paid to the administrative and general sinking funds as deductible when incurred. Special levies raised for a particular capital project are not deductible as they are paid (ATO, rental expenses). The engine treats the whole levy as deductible, so a building with a large special levy would cost more than the table shows.

Who has which column

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026. From 1 July 2027, an established dwelling bought after 7:30pm AEST 12 May 2026 can no longer have its rental losses offset against salary (Nexia summary). The loss can be used against other residential property income, including a capital gain, and any excess is carried forward. The engine does not count that future benefit in the weekly figure.

So the "with offset" row applies to owners who held before the cut-off. It also applies to post-Budget buyers until 30 June 2027. After that date, a post-Budget buyer of either property moves to the "without it" row. That move costs the apartment more than the house, because the apartment had more depreciation to lose. We explain the class rules in negative gearing after the 2026–27 Budget.

What this analysis cannot tell you

• Insurance, council and water are the same for both. The engine charges each property $1,800 of insurance, $2,200 of council rates and $1,100 of water. In practice an apartment's landlord policy usually excludes the building, which the strata levy insures, and its rates are often lower. Without the offset, every dollar saved on those lines raises the break-even by a dollar.
• Land shares are model assumptions. The 65% and 18% splits are engine defaults, not valuations. Your rates notice shows the actual site value, and our guide to land value vs purchase price explains why that figure sets land tax.
• Depreciation is an estimate. Capital works deductions are based on the original construction cost, not today's building value. Older buildings may have little or nothing left to claim, which would shrink the apartment's advantage in the offset column.
• Growth is not compared. This post covers the cost of holding each property, not what each is worth in ten years. Land tends to appreciate and buildings wear out, and that is the trade the apartment's lower holding cost has to justify. We have left it out because it depends on the specific market, not on a formula.

None of this makes either a better investment. It shows that for a post-Budget buyer at this price, strata quickly outweighs the apartment's lower land tax and upkeep, while an owner with the offset can carry a much larger levy before the same thing happens. To see the comparison with a real strata levy and rent, you can run a specific property through Plintha.

This article is general information, not financial, tax, credit or legal advice. It doesn't take into account your objectives, financial situation or needs. Figures use Plintha's engine with the assumptions stated above (80% LVR, interest-only at an assumed 6.75%, 37% marginal rate, Victorian duty and the 2024–2033 general land tax scale, land at 65% of a house and 18% of an apartment, strata levies as shown, standard operating-cost model) as at 5 October 2026, and will change if any of those inputs change. Check your own position with a licensed tax agent or financial adviser before acting.