Negative gearing is when a property costs more to hold — mainly loan interest and expenses — than it earns in rent, producing a loss. Under the long-standing rules, that loss could reduce the tax on your other income.
In the 2026–27 Federal Budget (now law), the government limited negative gearing on established residential properties bought after 12 May 2026, taking effect from 1 July 2027. Crucially, new builds remain exempt, and anyone who already owned — or was under contract — before that date is grandfathered under the old rules. In short, the rules now actively favour the new-build strategy.
Worth keeping in mind: a tax benefit softens a loss — it doesn’t turn a loss into a profit. This is general information, not tax advice, and your accountant should confirm your position.