What is negative gearing?
Understand negative gearing in a tax context and why rental property records matter.
Summary
Negative gearing generally describes a situation where deductible investment expenses exceed investment income. The ATO provides guidance on rental income, rental expenses and investment records.
What this means
Negative gearing is commonly discussed in relation to rental properties, but the tax outcome depends on the actual income, expenses and rules that apply.
Investors should focus on correct rental income reporting, allowable expense claims and record keeping rather than relying on the label alone.
Typical actions
- Declare rental income.
- Track deductible expenses carefully.
- Separate capital and private costs from deductible rental expenses.
- Keep records that support claims.
- Seek advice before making investment decisions based on tax treatment.
Official ATO sources
Last checked: 20 June 2026
Rental income you must declare
Explains rental income that must be declared.
Rental expenses you can claim now
Explains rental expenses and deduction timing.
Residential rental properties
ATO hub for rental property tax information.
Related questions
- How is rental income taxed?
- What rental property expenses can be claimed?
- What records should investors keep?
- What is capital gains tax?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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