Investment Property Loans › What is negative gearing?

What is negative gearing?

Negative gearing is when the costs of running an investment property, including loan interest, are greater than the rent it earns, producing a loss. That loss can generally be offset against your other taxable income.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

Negative gearing is widely talked about but often misunderstood. It means the property runs at a loss in the short term, which reduces your tax, while you aim for capital growth over time. It is a strategy, not a guarantee, and it relies on you being able to fund the shortfall, so it should fit a clear plan and professional advice.

The key points

Costs exceed rent, creating a loss.
The loss can offset other taxable income.
It relies on capital growth over time.
You must be able to fund the shortfall.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.