A property is negatively geared when its deductible expenses (interest + operating costs + depreciation) exceed its rental income. The resulting loss can be deducted against your other taxable income — meaning a refund at your marginal tax rate.

Cash flow vs taxable result. Depreciation is non-cash — it reduces your tax bill without reducing the cash in your bank. Your weekly out-of-pocket cost is your cash flow before tax, plus the tax refund you receive at year-end.

When you sell the property, capital works depreciation reduces your cost base and may increase capital gains tax — something to plan for.

This is an educational estimate, not tax advice. Negative gearing rules and depreciation eligibility (especially for second-hand plant & equipment) are complex. Consult a registered tax agent.