Important notes
Negative gearing allows you to deduct net rental losses from your other income (e.g., salary), reducing your total taxable income.
The tax benefit depends on your marginal tax rate. The higher your income, the greater the benefit.
This calculator provides an estimate only. Consult a tax professional for personalised advice.
What is negative gearing in Australia?
Negative gearing occurs when the costs of owning an investment property (mortgage interest, rates, repairs, etc.) exceed the rental income. The net loss can be deducted from your other income, reducing your tax bill.
How much tax do I save from negative gearing?
Your tax saving equals the net rental loss multiplied by your marginal tax rate. For example, a $10,000 net rental loss at a 37% marginal rate saves you $3,700 in tax.
What expenses can I claim on a rental property?
Deductible expenses include: mortgage interest, property management fees, council rates, water rates, insurance, repairs and maintenance, depreciation, and accounting fees related to the property.
Is negative gearing good for property investors?
Negative gearing reduces your current tax bill, but the property is still costing you money each year. It is most beneficial if you expect the property to grow in value (capital gain) over time, which may also attract the 50% CGT discount if held for 12+ months.
What is the difference between negative and positive gearing?
Positively geared means rental income exceeds expenses — you make a profit each year (taxable). Negatively geared means expenses exceed income — you make a loss each year (tax deductible against other income).