If you’ve been following the negative gearing changes this year, you’d be forgiven for thinking the whole thing is finished. That’s how it’s been reported. For a lot of people, that concern is fair. But almost all of the coverage is aimed at one type of person, someone earning a salary. If you own a business, your income doesn’t work the same way theirs does, and the answer for you is different.
A business owner’s income runs through a structure, not straight into a payslip, and that difference is exactly what changes how these new rules land.
| Quick Summary
● The negative gearing changes are law, passed in June, and apply to established residential property purchased from 1 July 2027. Watch the full breakdown, including a real client example. Watch it here. |
What’s actually changed, and what hasn’t
The changes are real and they are law. From 1 July 2027, a loss on an established residential property can no longer be offset against other income, only against residential property income or a capital gain when it’s eventually sold. There are exceptions worth knowing, particularly around what counts as grandfathered and what still gets full negative gearing going forward, and the video runs through exactly where those lines sit.
Why a salary earner and a business owner aren’t in the same position
Negative gearing was always most useful to people with no other lever to pull. A salary earner has tax taken out before they ever see it, and almost nothing they can do to change that number. A business owner’s income can move through a structure first, and that’s where the difference starts to matter.
How the structure changes the outcome, not the rule
The tax treatment of a quarantined loss is identical whether you’re a salary earner or a business owner. What changes is whether that shortfall actually costs you anything month to month. There’s a real client example in the video that walks through this with actual numbers, showing exactly why the same fifteen thousand dollar loss can sting one person and barely register for another.
Funding the purchase without going to the bank first
After years of running a business properly, the money to fund a property purchase doesn’t always have to come from a bank. There’s often cash already sitting inside the business structure that’s had company tax paid on it, and using it the right way means the interest on the loan builds wealth inside your own entity instead of a lender’s. Getting this part wrong has real tax consequences though, and the video covers exactly what needs to be in place for it to work.
The deduction shouldn’t be the reason you buy
A property bought mainly because of the tax deduction attached to it still has to stand on its own outside of tax, and that’s a separate question to the structuring side of things. Whether a particular property is a good purchase isn’t something we advise on, since that sits in investment and financial advice territory rather than tax and structuring. What we can help with is making sure that whatever property decision you do make is held in the right structure once you’ve made it. The video touches on this distinction in a bit more detail.
The property most business owners already own and haven’t thought about this way
If you’re a business owner in your late forties or fifties, there’s a strong chance the best tax opportunity available to you isn’t a property you’re planning to buy at all. It’s the one you’re already sitting in. The grandfathering rules and a couple of other provisions can combine in a way that makes this a much bigger decision than it first looks, and it’s one worth mapping out properly before making a move, not after.
Watch the full video here for the complete breakdown, the client example with real numbers, and what this could mean for a property you already own or one you’re thinking about buying.
Already got money sitting in a bucket company?
If part of this sounds familiar, funding a purchase using company money the right way runs on very similar rules to the Division 7A loan strategy we’ve covered separately, worth a read if you haven’t already.
Wondering what this means for you?
Every business and every property looks different, and whether these changes actually affect you depends on how your structure is set up today. If you own property, or you’re thinking about buying, contact the team at Cotchy to learn more and find out exactly where you stand.
