{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Economic research & forecasting Economics Housing outlook Tailored market research Economic reports & data Inspiring Australia's building professionals Business & digital Products & innovation Projects HOUSING Online The only place to get your industry news Media releases Member alerts Submissions See all
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder & manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies & tool insurance Planning & safety solutions Building & planning services How can safety solutions help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan Advertise jobs Trusted support & guidance Contracts & compliance support Professional services Industrial relations Member savings Toyota vehicles Fuel savings Handy pay See all
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials & products Concrete, bricks & walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes See all
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Frequently asked questions Study with us Find a course to suit you Qualification courses Learning on demand A job in the industry Get your builder's licence Continuing Professional Development (CPD) Find jobs
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Mates rates Get involved Become an award judge Join a committee Partner with us Our initiatives GreenSmart Kitchen, bathroom and design hub Get to know us Our members Our people Our partners Support for you Charitable Foundation Mental health program
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Awards program People & Business Awards GreenSmart Australian Housing Awards Awards winners Regional Award winners Australian Housing Award winners 2023 Australian Home of the Year Enter online Industry events Events in the next month Economic outlook National Conference Events calendar
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping & delivery Purchasing T&Cs See all Products Purchase NCC 2022 Building codes & standards Economic reports Hard copy contracts Guides & manuals
About Contact Newsroom
$vuetify.icons.faTimes
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Address
Change location
{{propApi.title}}
{{propApi.text}} {{region}} Change location
{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Global negative gearing comparison

Opinion piece

Global negative gearing comparison

Opinion piece
It has been stated that Australia is the only country that allows for negative gearing deductions, although this is not the case. There are plenty of other countries that allow negative gearing deductions. Here is how it works around the globe.

An asset is negatively geared when interest payments on borrowings used to finance the asset exceed the income it generates. "Negative gearing" means that these losses can then be used to offset other forms of income such as wages. Although it is most commonly used in the property market, negative gearing can apply to any form of asset. 

Australia is not the only country to allow negative gearing. Germany, Japan, Canada and Norway all have very similar systems to ours, with rental losses able to offset total income tax payable and unused losses able to be carried forward to offset future tax liabilities.

Other countries have similar systems, albeit slightly less generous, where rental losses can generally be used to offset future rental income but not other forms of income (e.g. wages income). Some countries do not allow negative gearing but nevertheless have some allowance for rental expenses to reduce overall tax liability.   

Negative gearing needs to be considered in the context of the broader tax system, especially personal income tax and capital gains tax.

It is not accurate to focus on only one aspect of our tax system without considering the whole system. For example, relative to other OECD economies, Australia has a high marginal tax rate which kicks in at a low-income threshold. When considering the tax system in aggregate, Australia is one of the most heavily taxed countries in the OECD.

In summary:

Negative gearing (where rental losses can be used to reduce tax on other forms of income) is not unique to Australia. Germany, Japan, Canada and Norway all have very similar systems to ours.

A number of other countries have limited versions of negative gearing, generally with restrictions on deductibility of rental income and limitations on the extent to which losses can offset future income. 

Negative gearing has to be viewed in the context of the broader tax system, especially personal income tax and capital gains tax.

Latest articles
View all news $vuetify.icons.faArrowRight
21 Feb
Mulch sold in ACT confirmed to contain bonded asbestos

Following on from the discovery of traces of bonded asbestos in garden mulch that has been distributed in Sydney, samples tested in Canberra by WorkSafe ACT have also proved positive for the substance.

21 Feb
Future of local government review

On 20 January 2024 HIA made a submission to the Tasmanian Government on the Future of Local Government Final Report.

20 Feb
Emission standards need more thought

“The Housing Industry Association (HIA) is concerned about the impact the Federal Government’s fuel emissions standards will have on the cost of doing business for tradies,” said Simon Croft, HIA Chief Executive – Industry & Policy.

20 Feb
Proposed amendments to the Directors Determinations on bushfire hazard areas

On 19 January 2024 HIA made a submission to the Tasmanian Government on proposed amendments to the Director's Determinations on bushfire hazard areas.

Negative gearing global comparison

Country Deductible expenses Loss deductibility Restrictions Negative gearing coverage
Germany Yes - everything Other income
  • Losses can be carried backwards (by one year) or forwards
Full negative gearing
Australia Yes - everything Other income
  • No deductions for vacant land
  • Can't carry losses backwards
Full negative gearing
Japan Yes - everything Other income
  • Interest for land ownership can't offset other non-rental income
Full negative gearing
Canada Yes - everything Other income
  • Requires a reasonable expectation of profit
  • Losses can't be created from depreciation deduction
Full negative gearing
Norway Yes - everything except capital improvement Other income
  • Rented for >30 days
  • Capital improvements not deductible
Full negative gearing
France Yes Other income
  • If unfurnished, rent must exceed €15,000 (if <€15,000 income is reduced by 30% with no other deductions. If furnished: rent must exceed €70,000)
  • Losses deductible up to €10,700/yr on other income, but only from non-interest expenses
Partial negative gearing
United States Yes Other property
  • Rental losses can only be deducted against only other 'passive' income (i.e. other rental income).
  • Capital expenses (improvements) can be deducted
Partial negative gearing
Ireland Yes Other property
  • Losses only deductible against current/future rental income
  • Capital expenses not deductible
Partial negative gearing
Finland Yes Other capital gains
  • Rental properties are considered the same as other capital assets. Losses only deductible against other capital gains
  • Losses can't be carried forward. Instead overall income tax is reduced by 30%, capped at a total deduction of €1,400
Partial negative gearing
Spain Yes No
  • Only able to reduce profit by 60%
  • Expenses > 60% of income are deductible in the following four tax years
No negative gearing but some deductibility of rental expenses
Sweden No No
  • Flat 40,000 deduction, plus 20% of remaining income if the original deduction didn’t bring it down to 0.
  • Deductions can’t exceed income (can’t create a loss)
No negative gearing but some deductibility of rental expenses

For a more comprehensive look at international comparisons and property tax, please refer to these reports: