Negative Gearing: Who Qualifies and What You Get
Learn how property investors in Australia can use rental losses to reduce their taxable income through negative gearing.
Negative gearing is a tax arrangement where you use the losses from an investment property to reduce the amount of tax you pay on your other income.
Who it's for
This is for property investors whose total expenses for a rental property are higher than the rental income they receive from it.
What you get
When your investment expenses exceed your rental income, you can use that net loss as a deduction. This means you can subtract the loss from your other taxable income, which may lower your overall tax bill.
What it costs you
To claim this, you must provide detailed rental property schedules within your tax returns to account for all income and expenses.
The catch to know
You cannot use this for properties held purely as a hobby. To qualify, you must demonstrate a genuine intention to make a profit from the investment.
How to apply
- Keep all receipts and records for your property expenses.
- Track all rental income received from your tenants.
- Complete the necessary rental property schedules in your tax return.
- Submit your tax return to the government tax authority.