The Death of Negative Gearing as We Know It?

Negative gearing generally describes an investment whose deductible costs exceed its income. For Australian rental property, the tax result depends on the applicable rules and your circumstances. A tax deduction does not remove the underlying cash loss, so it should not be the only reason to buy or hold a property.

What does negative gearing mean for property investors?

When assessing a rental property, consider rental income alongside interest, eligible expenses and the costs of owning the home. Not every outgoing is immediately deductible. Your accountant can explain which costs may be claimed and how any rental loss affects your tax position.

Keep the investment decision separate from the tax calculation. Vacancy, repairs, borrowing costs and future sale proceeds can all affect the overall outcome. A property can still cost you money after a tax benefit is taken into account.

How should you check negative gearing reform announcements?

Distinguish a policy announcement from legislation and its commencement date. Before acting on a headline, check the official rules, which properties and purchase dates they cover, and whether transitional arrangements apply. Do not assume that a rule affecting a new purchase also applies to a property you already own.

For current guidance, consult the Australian Taxation Office's residential rental property information and ask a registered tax agent how the rules apply to you. We have not independently confirmed a specific reform commencement date for this article, so it should not be treated as confirmation of one.

What should home sellers ask about investor demand?

Tax policy headlines do not tell you what an individual buyer will pay for your home. Ask your prospective sales agent about recent comparable sales, the likely mix of owner-occupiers and investors, and what buyers are saying about finance and competing properties.

If you are selling an investment property, discuss the timing and potential tax consequences with your accountant before committing. Your solicitor or conveyancer can advise on contract and tenancy matters.

Keep tax advice and agent selection separate

BrokerMyAgent is an independent real estate agent matchmaker. We help homeowners compare vetted local agents, appraisals, sales proposals and costs, with advice, guidance and support from start to settlement. Your appointed sales agent manages the sale negotiations. We do not provide personal tax advice.

This article provides general information only. Seek qualified tax and financial advice before making decisions about an investment property.