Has Negative Gearing Been Abolished in Australia?

No. Negative gearing has not been abolished for every residential investment property. Grandfathered properties and eligible new builds may continue to use a net rental loss against salary, wages or other taxable income after 1 July 2027. Losses from affected established properties are instead quarantined within the residential property income framework.

When Do the New Negative Gearing Rules Start?

The loss-quarantining rules commence on 1 July 2027. The earlier cutoff of 7:30 pm AEST on 12 May 2026 determines whether an established property may qualify for grandfathered treatment. Affected properties acquired later can generally remain under the existing arrangements until 30 June 2027.

Can Rental Property Losses Still Reduce Salary Income?

It depends on the property classification and acquisition date. A net rental loss from a grandfathered property or eligible new build may continue to reduce salary or other taxable income, subject to the ordinary deduction rules. From 1 July 2027, a loss from an affected established property generally cannot be applied against salary or unrelated income.

What Counts as a New Build for Negative Gearing?

A property must satisfy the legislative eligibility requirements to qualify as a new build for these tax rules. It must generally add to housing supply. A recently renovated dwelling, knock-down rebuild or property that appears new in marketing material will not automatically qualify. Construction, development and first-sale records should be reviewed before the treatment is claimed.

Can Quarantined Rental Losses Be Carried Forward?

Yes. Eligible quarantined rental losses can generally be carried forward when they cannot be fully used in the current income year. They may be available against future residential property income and relevant residential property capital gains, subject to the final ordering and ownership rules. The balance should be reconciled and supported each year.

Do the Changes Affect Commercial Property?

The new restrictions are directed at residential property. Commercial property income and deductions remain subject to the ordinary tax rules. Mixed-use properties, trusts, partnerships and other ownership arrangements may require separate review because treatment can depend on property use and taxpayer structure.