A rental property is said to be ‘negatively geared’ when the deductible expenses, including interest on the loan borrowed to finance the property, exceed the income earned from the property.

The overall tax result of a negatively geared property is a net rental loss. In this case, you may be able to claim a deduction for the full amount of rental expenses against your rental and other income – such as salary, wages or business income, when you complete your tax return for the relevant income year. Where the other income is not sufficient to absorb the loss, it’s carried forward to the next income year.

You will need to show the total net rental property loss at label IT6 on your tax return. The amount of the loss is included in your adjusted taxable income and may be used in calculating various tax obligations, tax offsets, and entitlement to other tax related concessions.

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