Turn rental losses into tax wins. Our expert mortgage brokers help investors structure loans to maximize tax deductions and build long-term wealth.
Negative gearing occurs when your rental property costs (loan interest, maintenance, rates) exceed the rental income. The "loss" reduces your taxable income, lowering your tax bill.
📈 Rental Income
$25,000/year from tenants
📉 Property Expenses
$35,000/year (interest, rates, maintenance)
💰 Tax Benefit
$10,000 loss reduces your taxable income by $10,000
Result: If you're in the 37% tax bracket, you save $3,700 in tax. Your actual out-of-pocket loss is only $6,300, not $10,000.
Your biggest deduction. On a $500K loan at 6%, that's $30,000/year.
Typical: $20,000 - $40,000/year
Agent fees (typically 7-10% of rent), advertising, tenant finding fees.
Typical: $2,000 - $4,000/year
Fixing damage, servicing, cleaning between tenants.
Typical: $1,500 - $5,000/year
Annual council rates, water rates, strata fees (units).
Typical: $2,000 - $6,000/year
Landlord insurance, building insurance.
Typical: $1,000 - $2,500/year
Building (2.5%/year), fixtures & fittings. Get a quantity surveyor report!
Typical: $5,000 - $15,000/year
How you structure your loan makes a huge difference to your tax position.
Pay only the interest (not principal) to maximize your tax deductions. Your loan interest is tax-deductible, but principal repayments aren't.
Best for:
• High-income earners seeking maximum deductions
• Properties with strong capital growth potential
• Investors building a portfolio
Keep your investment loan completely separate from your home loan. Never mix the two or you'll contaminate your tax deductions.
Best for:
• All investors (essential!)
• Clean tax record keeping
• ATO compliance
Use offset accounts on your HOME loan, not investment loan. Keep investment loan balance high to maximize deductions.
Best for:
• Investors with multiple properties
• Balancing tax efficiency and cash flow
• Long-term wealth building
Earning $120K+, in the 37-45% tax bracket
Planning to hold for 10+ years for capital growth
Using tax savings to fund next property deposit
Secure income to cover short-term cash flow gaps
We structure your loan to maximize deductions while staying ATO compliant.
Find the best rates for investment properties - often better than owner-occupied.
We're paid by lenders, not you. Expert investment advice at no cost.
Plan for multiple properties using equity and tax refunds to fund growth.
Know your borrowing power before you shop. Pre-approval in 24 hours.
We work with your accountant to ensure optimal tax structure.
Despite periodic political debate, negative gearing remains a core part of Australia's tax system. It's been around since 1936 and applies to all investments (shares, property, etc.), not just property. Any changes would require major legislative reform.
It depends on your tax bracket and the size of your loss. Example: $15,000 annual loss × 37% tax bracket = $5,550 tax refund. Over 10 years, that's $55,500+ (assuming consistent losses). Use your tax refund to pay down your home loan or save for your next investment property.
While higher income earners benefit more (due to higher tax brackets), negative gearing works at any income level. What matters most is: (1) stable income to cover cash flow gaps, (2) long-term investment horizon, and (3) property in a growth area.
For investment properties, interest-only loans maximize your tax deductions (since only interest is deductible). Typical structure: 5 years interest-only, then switch to P&I or refinance. Always pay down your home loan first, keep investment loans high.
Great problem to have! As rents increase or you pay down the loan, you may become positively geared (profit). You'll pay tax on the profit, but you're making money. This is the long-term goal - negative gearing early for tax benefits, positive gearing later for cash flow.
Repairs are immediately deductible (fixing damage). Renovations/improvements are capital works (depreciated over 40 years at 2.5%/year). Important distinction: replacing a broken dishwasher = repair (deduct now). Adding a new dishwasher where there wasn't one = improvement (depreciate). Get a quantity surveyor report!
Let's structure your investment loan for maximum tax efficiency.
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