What Is Negative Gearing?
Negative gearing is a term commonly used when an investment property costs more to hold than it earns in rental income. Understanding what it means is a starting point for any property investment conversation.
Negative gearing is a term commonly used when the income from an investment property is lower than the costs associated with owning it. This means the owner may need to contribute additional funds to cover the shortfall between rental income and property expenses.
Investment properties can involve a range of costs such as loan repayments, maintenance, insurance and property management. The tax treatment of these expenses can vary depending on individual circumstances and current tax laws. Investors should seek advice from a registered tax agent or accountant to understand how property expenses may be treated for tax purposes.
Interest rate changes can affect the cost of holding an investment property. Higher interest rates may increase loan repayments and overall property expenses. Because property investment involves financial risk and potential tax implications, individuals considering an investment property should seek advice from a licensed financial adviser and a registered tax agent.
This information is general in nature and does not constitute financial or tax advice. Mortgage brokers are authorised to provide credit assistance only. You should seek advice from a licensed financial adviser and a registered tax agent before making investment decisions.
You may wish to speak with a licensed mortgage broker to assess your personal circumstances.
This is general information only and does not constitute financial or tax advice. Speak with a registered tax agent and licensed mortgage broker before making decisions.
Sources: ATO, Rental Properties 2025; RBA, Financial Stability Review 2024; Tax Institute of Australia, Negative Gearing Guide; CoreLogic, Australian Property Investment Report 2025.
