Submitting rental income and tax deductions

How is negative gearing applied to investment properties?

To assist with calculating rental income and tax deductibility for investment properties, we have a dedicated worksheet within the Macquarie Serviceability Calculator.

Our approach to negative gearing has been considered in light of the 12 May 2026 Federal Budget. Eligibility for negative gearing benefits within our serviceability calculations depends on the specific investment scenario:

Buying a new investment property
Refinancing an existing investment property
Owner-occupied property becoming an investment property

Watch the video below to understand how these scenarios work in practice.

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Buying a new investment property

For contracts of sale executed on or before 12 May 2026, applications remain eligible for negative gearing in our serviceability calculations
For contracts of sale executed after 12 May 2026, negative gearing will only be factored into serviceability calculations if the property meets the definition of a ‘new build’ that genuinely adds to housing supply.

Refinancing an existing investment property

Dollar-for-dollar refinance: Existing investment properties purchased on or before 12 May 2026 are still eligible for negative gearing in our serviceability calculations
Refinancing with additional cash out: We’ll include negative gearing on the additional borrowing in our serviceability calculations when those funds are used for:
- the purchase of an investment property that has a contract date on or before 12 May 2026
- the purchase of an eligible ‘new build’
- improvements to an existing investment property acquired on or before 12 May 2026.

Owner-occupier property becoming an investment property

For properties acquired on or before 12 May 2026 that subsequently become investment properties (e.g. where an owner-occupied property is converting to an investment property), we’ll continue to include negative gearing on the debt used to acquire and/or improve the pre-12 May property in our serviceability calculations.

How are rental property interest and expenses assessed against rental income?

We allow rental property interest and expenses to be deducted from rental income in our serviceability calculations. This includes grouping or pooling across multiple investment properties where they’re held in the same name.

Where negative gearing applies, we’ll be relying on customers' representations on eligibility as reflected in their loan application, and customers are responsible for ensuring they continue to be eligible for negative gearing. Before submitting loan applications that include negative gearing, please make sure your customer understands these requirements. Customers must also seek guidance from their own tax professional.

How do I use the rental income and tax deductions worksheet in the serviceability calculator?

Before you begin, please ensure you’ve downloaded the latest version of the Macquarie Serviceability Calculator. To calculate rental income and tax deductibility for investment properties:

Select the Click here for rental income and tax deductions worksheet button in the main serviceability worksheet
For each investment property held, input the loan balances (not the loan limit), negative gearing eligibility (by selecting yes or no), annual rental income, annual property expenses, and the ownership % for each applicant
Ensure the rental income entered is able to be verified
Refer to our eligibility criteria above to assess if the negative gearing benefit can be applied
Select the Back to Serviceability Calculator button to go back to the main serviceability worksheet. ‘Annual rental income received’ and ‘Annual investment property expenses’ will be pre-populated based on your inputs above.
Select Print in the top-right of the screen to save all worksheets as a PDF
If you wish to include worksheets as supporting documents when submitting your application, save and upload them to ApplyOnline.

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