Negative Gearing Explained – Including the 2026 Changes
Negative gearing has been one of the most talked-about property tax topics in Australia – and the rules are changing. Here is how negative gearing works today, what changes from 1 July 2027, and who is protected.
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What is negative gearing?
A property is “negatively geared” when its deductible costs – such as loan interest, rates, repairs and depreciation – are more than the rent it earns. Under the current rules, that rental loss can generally be deducted against your other income, such as wages, reducing your tax.
Example
Rent $26,000 a year; interest and other costs $34,000. The $8,000 loss can currently reduce your other taxable income.
What changes from 1 July 2027
Announced in the 2026–27 Federal Budget and now law.
Established residential property
For properties acquired after the announcement, losses generally can only be offset against residential property income or gains – not against wages. Unused losses can be carried forward.
New builds
New residential builds can continue to be negatively geared before and after 1 July 2027.
Grandfathered properties
Properties held at the time of the announcement (7:30pm AEST, 12 May 2026) are exempt from the negative gearing changes.
Capital gains tax
For individuals, trusts and partnerships, the 50% CGT discount is replaced with cost base indexation and a 30% minimum tax rate – but only for gains that accrue after 1 July 2027.
Some details – such as exactly what counts as a “new build” and certain exemptions – are set out in further rules. We will check how they apply to your property.
What should investors do now?
- Keep records showing when you bought (or contracted to buy) each property
- Check whether a planned purchase is an established property or a new build
- Review your cash flow if future losses can’t be used against wages
- Get advice before selling – CGT is also changing
How UV TAX helps
- Prepare rental property tax returns and claim all eligible deductions
- Work out whether your properties are grandfathered
- Model the impact of the changes on your tax
- Plan purchases and sales around the new rules
⚠️ General information only – not tax or legal advice. These changes are new and some details depend on further rules and guidance. How they apply depends on your purchase dates, property type and personal circumstances. UV TAX does not provide financial product or investment advice. This page is a simple overview as at November 2026 and does not consider your personal circumstances. Tax laws, rates and thresholds change regularly. Please get advice for your situation before acting.
Property investor? Check how the changes affect you
Free consultation and a fixed-fee quote before we start.
0466 268 405Frequently asked questions
Is negative gearing being abolished?
Not entirely. From 1 July 2027 it is limited to new builds for residential property, and properties held at 7:30pm AEST on 12 May 2026 are exempt from the changes.
Can I still negatively gear my existing investment property?
If you held it at the time of the announcement, it is exempt from the negative gearing changes.
What happens to my losses on a non-grandfathered established property?
From 1 July 2027 they can generally only be used against residential property income or gains and carried forward.
Is the CGT discount changing?
Yes. For gains accruing after 1 July 2027, the 50% discount is replaced with cost base indexation and a 30% minimum tax rate for individuals, trusts and partnerships.
Related
General information current as at November 2026.