Negative gearing hits a Glen Waverley house for ~$32k/yr. A Narrabri one? $0.

On 12 May, the Federal Budget did something most investors still haven’t fully priced in: from 1 July 2027, negative gearing is being wound back on established investment properties. New builds are exempt. Anything you already own is grandfathered.

Everyone’s talking about it. Almost no one is putting a number on it. So we did — suburb by suburb, from our own data.

Here’s the part the headlines miss. Negative gearing only ever helped you when your property was losing money each year. It’s a deduction for a shortfall. So removing it doesn’t hit everyone equally — it hits hardest exactly where the shortfalls are biggest: the expensive, low-yield capital-city house. The “safe blue-chip” asset is the one most exposed.

The blue-chip house: maximum exposure

Glen Waverley, VIC — median house $1.80M, rent $780/week, gross yield 2.25%.

A fully-geared investor here runs a paper loss of roughly $68,000 a year (rent of ~$40,600 against interest and holding costs of ~$109,000). Negative gearing currently hands about $32,000 of that back every year as a tax refund. After 1 July 2027, a new buyer of an established home loses that. Box Hill, VIC ($1.59M, 2.13% yield) is nearly identical: ~$62k shortfall, ~$29k a year in tax breaks at risk. At the top end, a Mosman, NSW house ($5.4M, 2.22% yield) is carrying close to $97,000 a year in negative-gearing benefit — gone, for anyone buying established from here.

The high-yield regional: barely a scratch

Narrabri, NSW — median house $457K, rent $540/week, gross yield 6.15%.

On the same assumptions, this property is positively geared — the rent covers the loan and the costs with a few hundred dollars to spare. It was never using negative gearing, so it loses nothing. Deniliquin, NSW ($377K, 5.93% yield) and Morwell, VIC ($370K, 5.90%) sit right on break-even — their negative-gearing benefit is around $200 a year. Not a typo. Two hundred dollars.

Read those two numbers next to each other: ~$32,000 a year in Glen Waverley versus ~$200 in Deniliquin. The change everyone’s panicking about is, in dollar terms, a capital-city problem. If your strategy was a low-yield house carried by a tax refund and a bet on capital growth, the refund half of that equation is being switched off. If your strategy was a property that actually pays for itself, almost nothing changes.

The honest caveats: these figures assume an 80% interest-only loan at ~6.3%, holding costs of ~1% of value a year, and a 47% marginal tax rate — change the leverage or your income and the dollars move, but the direction doesn’t. Yields are gross. Regional towns are thinner markets with fewer buyers on exit. Existing holdings are grandfathered and new builds are exempt, so this bites new purchases of established homes from 1 July 2027. None of this is tax or investment advice — check the legislation and your own accountant before you act on it.

Type in any suburb and Estait runs the full picture — rent against real holding costs, the cashflow after tax, and whether the yield actually stacks up once the negative-gearing crutch is gone.

Here’s the question I keep coming back to: if a property only works with the tax break, was it ever a good investment — or just a well-subsidised one? Hit reply, I read every one.

— Pritesh, Founder, Estait AI