Property investing term
Negative gearing
A rental property tax position where deductible rental expenses exceed rental income.
What Negative gearing means
The property produces a net rental loss for tax purposes. That tax result is related to, but not identical to, the cash shortfall you fund.
How it is calculated
Assessable rental income − deductible rental expenses
$28,000 − $35,000 = −$7,000 net rental loss
Why it matters
A deduction can reduce tax, but it does not erase the underlying loss. The property still needs enough cash support to remain affordable.
Timing changes the answer
Enacted rules change the treatment for many residential interests acquired after 7:30 pm ACT time on 12 May 2026. From the 2027–28 income year, affected excess deductions are generally quarantined rather than offset against salary or unrelated income. Grandfathered and exempt dwellings can differ.
A definition cannot see your position. Heyward can.
Start with: “Show the cash-flow and tax treatment of this property under the rules that apply to it.”
Sources
Primary & official where available- Australian Taxation Office Residential rental properties
- Federal Register of Legislation Treasury Laws Amendment (Tax Reform No. 1) Act 2026
General educational information only. It does not account for your objectives, financial situation, legal position or tax circumstances.