What the media do not tell you about negative gearing
Steady on.
Nothing stopped being deductible. Interest, rates, insurance, management fees, repairs, depreciation. All still claimable, every cent. What changed is what you claim it against. Instead of offsetting a rental loss against your salary in the same year, the loss is quarantined and rolled over, banked until the property turns a profit and then applied against it. It does not vanish. It queues.
Here is the thirty-year version:
Same property, same loan, same costs. Old rules in dark, new rules in tan.
- Years 1 to 14: the tan bars sit lower. You wear the full loss instead of getting $5,550 back each tax time. This is the bit the headlines love.
- Around Year 15: rent catches up, the property turns positive, and roughly $105,000 of banked losses is sitting there waiting.
- Years 15 to 28: tan bars now sit higher, every single year. Those banked losses are wiping out the tax on your rental profit. The benefit you missed in Year 3 has arrived, slightly late, like a tradie.
- Years 29 and 30: identical. The bank is empty and the two scenarios have converged.
Total after-tax cash across thirty years is the same. Same tax paid, same end position.
There is a catch. Those early years are harder on cash flow, and a benefit arriving in Year 22 is worth less than the same benefit today. So buffers and yield matter more than they used to. Plan for it rather than panic about it.
Worth knowing: if you held the property, or were under contract, before 7:30pm on 12 May 2026, you are grandfathered under the old rules. New builds are exempt too.
If I would not buy it personally, neither should you.
*General information only, not tax or financial advice. Figures are illustrative. CGT rules also changed in the same package. Please check with your accountant.