What is negative gearing?

Negative gearing occurs when the costs of owning an investment property (loan interest, maintenance, insurance, rates, depreciation) exceed the rental income it generates. The resulting loss can be offset against your other taxable income, reducing your overall tax bill. For example, if your rental loss is $10,000 and your marginal tax rate is 30%, you save $3,000 in tax. The strategy relies on capital growth over time exceeding the after-tax holding costs.

Is negative gearing being abolished?

As of 2026, negative gearing remains available for all investment properties in Australia. While there have been policy debates about restricting negative gearing to new properties or abolishing it altogether, no changes have been legislated. Any future changes would likely be grandfathered for existing investors. Always check the latest ATO guidance for current rules.

How much tax do you save with negative gearing?

Your tax saving from negative gearing equals your rental loss multiplied by your marginal tax rate. For example, a $15,000 annual rental loss at the 37% marginal rate saves $5,550 in tax, meaning the actual after-tax cost of holding the property is $9,450 per year ($182 per week). Higher income earners save more in absolute terms because their marginal tax rate is higher.

Negative Gearing Calculator

Calculate your negative gearing tax benefit on an investment property. See rental income vs deductions, tax savings at your marginal rate, and after-tax holding cost.

Last verified: 1 July 2025

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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.

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