Negative Gearing — Maximise Your Property Investment Position

Negative gearing can still work well for the right investor and the right property. Our property tax specialists make sure your rental position is calculated and claimed in line with current Australian tax law, so you claim everything you are legitimately entitled to.

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Expert Negative Gearing Advice & Tax Return Services

Negative gearing occurs when the costs of owning an investment property — loan interest, depreciation, maintenance, rates and other expenses — exceed the rental income it earns. Used correctly, the resulting loss can reduce your taxable income and improve your overall return on a property investment. The type of property you hold, when it was acquired, and the ownership structure (individual, trust, company, or SMSF) all affect how rental losses can be claimed in Australia. Getting these details right matters. Interest deductibility, depreciation timing, the line between deductible repairs and non-deductible capital improvements, and the correct treatment of any quarantined losses all affect how much you legitimately save. AAD Taxation’s property tax specialists ensure your negative gearing position is accurately calculated, fully compliant with current ATO requirements, and structured to deliver the best legitimate outcome. We work across the full spectrum, from straightforward rental property returns to complex portfolios with multiple properties, mixed ownership structures, and new-build investments.

Current Rules — At a Glance

How Rental Losses Are Treated Under Current Law

The rules depend on when your property was acquired and what type of property it is.

Property type & acquisition	Rental loss treatment	Status
Any property acquired (or under contract) before 7.30 pm AEST on 12 May 2026	Losses offset against all assessable income, previous rules continue	Unchanged
Eligible new-build residential properties	Existing tax position retained, losses offset against all assessable income	Unchanged
Established residential property acquired after 7.30 pm AEST on 12 May 2026	Losses quarantined from 1 July 2027, offset only against residential rental income or future rental property capital gains	New rule
Shares, commercial property & other assets	Existing negative gearing rules continue, not affected by residential property reforms	Unchanged

We confirm which rules apply to your specific property and structure before any lodgement.

The AAD Difference

Why Property Investors Choose AAD for Negative Gearing

Negative gearing requires precision and a deep understanding of how the current rules apply to your specific property. Here’s what sets our team apart.

Accurate Loss Calculations

Rental income, expenses, and losses are calculated correctly by capturing every eligible deduction and applying the correct treatment for your property type, so nothing you are entitled to is missed.

Interest Deductibility Accuracy

Loan interest is typically the largest deduction in any negatively geared property. We carefully review your loan structure, redraws, and offset arrangements to ensure interest is fully and correctly claimed in line with ATO requirements.

Repairs vs Capital Clarity

The line between deductible repairs and non-deductible capital improvements is one of the most commonly mishandled areas in property tax. We apply the distinction clearly so you avoid both overclaiming and missed claims.

Depreciation Optimisation

We work with quantity surveyor depreciation schedules to ensure both building (capital works) and plant & equipment depreciation are claimed accurately and kept up to date as the property ages or undergoes renovations.

PAYG Tax Variations

For eligible PAYG employees, we manage withholding variation applications so your legitimate tax benefits flow through during the year, improving your cash flow rather than waiting for your refund at lodgement.

Claim More. Stress Less. Invest Smarter.

We simplify negative gearing so you understand your position and claim eligible deductions correctly.

How It Works

A Clear Process for Compliant, Optimised Property Tax Returns

Every property is different. Our four-step process ensures your treatment is accurate from day one and your strategy stays sharp year after year.

Property & Strategy Review

We start by understanding your property, ownership structure, purchase details, and investment goals. This sets the foundation for how your rental position is treated and what deductions apply, including which set of rules governs your property.

Share Your Records

Send us your rental statements, loan documents, depreciation schedule, repair and improvement records, and any prior PAYG variation paperwork — securely via our portal, by email or in person.

Calculate, Review & Confirm

At AAD Taxation, our experts calculate your rental position, apply the correct deductions, treat any quarantined losses appropriately, and present your return to you for review before lodgement.

Lodge & Plan Ahead

Once approved, we lodge your return with the ATO. Each year, we review changes to your property, circumstances and tax position to ensure your deductions remain accurate and compliant.

Client Reviews

What Our Clients Say

Real reviews from real Australians. 300+ five-star Google reviews and counting.

AAD Taxation got me a refund I never knew I was entitled to. Professional, quick, and explained everything in plain English. They found deductions my previous accountant completely missed. Absolutely outstanding!

Priya S.

As a small business owner, BAS and payroll was a nightmare. AAD took everything off my plate and the fixed pricing means no surprises. Their team responds within hours — incredible service, highly recommended.

Raj M.

I had 3 overdue tax returns and was terrified of the ATO. AAD sorted everything, negotiated my penalties down, and set up a payment plan. Now I’m fully up to date. They literally saved me thousands!

James T.

FAQs

Frequently Asked Questions

Clear answers to the most common questions property investors ask about negative gearing.

What does "negatively geared" mean?

A property is negatively geared when the costs of holding it, mainly loan interest, maintenance, rates, and depreciation, exceed the rental income it produces. The resulting loss reduces your overall assessable income in the way the current tax rules allow.

How much tax will I save through negative gearing?

It depends on your marginal tax rate, the size of the rental loss, the type of property, and how the loss can be applied under the current rules. At a 37% marginal rate, every $1,000 of deductible rental loss reduces your tax by about $390 once the 2% Medicare levy is included. We calculate your exact benefit based on your specific situation.

Can I claim rental losses against my salary?

It depends on when you acquired the property and what type of property it is. Under current rules, properties owned (or under contract) before 7:30 PM AEST on 12 May 2026 continue under the previous treatment, and eligible new-build properties retain their existing tax position. For established residential properties acquired after that date, rental losses are quarantined from 1 July 2027 — they can only be offset against residential rental income or future capital gains from rental properties.

Is negative gearing always worth it?

Not always. The benefit depends on your long-term goals, capital growth expectations, loan structure, and how well the property performs. Tax savings alone don’t make a bad investment worth it. For personal advice on whether a property is right for your circumstances, please also consult a licensed financial adviser.

Can I negatively gear a property owned jointly?

Yes. Each co-owner claims their share of the rental loss based on their ownership percentage — typically 50/50 for spouses. The current tax treatment then applies to each owner’s share according to their individual circumstances.

Can I negatively gear investments other than property?

Yes. Negative gearing can also apply to other income-producing investments, for example, shares bought with borrowed funds: the loss is deductible where interest and other costs exceed the income the investment produces. The new limits apply only to residential property, so shares, commercial property and other assets continue under the existing rules.

What happens when I sell a negatively geared property?

On sale, a capital gain may arise. The treatment depends on the type of property and when it was acquired. Individuals who have owned the property for at least 12 months may be eligible for the 50% CGT discount under the current rules. For some affected properties, capital gains are instead calculated using cost base indexation with a 30% minimum tax rate. We model the outcome for your specific property before sale so there are no surprises.

Does negative gearing still work if interest rates rise?

Higher interest rates increase your rental loss, which increases your tax deduction, but the cash flow impact still needs careful management. We model both scenarios so you understand the after-tax cash position, not just the tax position.

Can I negatively gear a holiday home I sometimes use myself?

Only for the periods when the property is genuinely available for rent. Private use periods must be excluded from deductions, and the ATO scrutinises holiday-home claims closely. We ensure correct apportionment so your return is compliant.

What about properties held in an SMSF or trust?

SMSFs and family trusts have specific tax treatments that differ from individual ownership — including different rules on losses and CGT. We coordinate across your structures so the right treatment applies to the right entity.

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Book a consultation. We’ll review your property, your structure, and your tax position, and map out the most efficient path forward. After your consultation, if you choose to proceed, we’ll provide a fixed upfront quote – no surprises and no hidden fees.