Positive Cash Flow Property in Queensland

One line is your bank account. The other is your tax return. Here's where they split, and what changes from 1 July 2027.

By Kayla Dale, Senior Property Manager and Sales Agent, FAA Property. Reviewed against ASIC MoneySmart and ATO guidance, 6 October 2026. General information only. FAA Property does not provide personal financial, tax or SMSF advice. Get advice from a registered tax agent and a licensed credit adviser before relying on any figure.

This guide is for investors deciding what kind of Queensland property to buy, who keep seeing homes called cash flow positive. That label hides two results. One lands in your bank account. The other lands on your tax return. From 1 July 2027, a loss on an established home bought after Budget night can't reduce tax on wages, so the two can drift further apart. Every input here is published and dated, and worked figures show their inputs. None of it is an FAA Property listing or result.

Where the cash line and the tax line split

Most holding costs sit on both lines. Council rates, insurance, land tax and agent's fees leave your account, and the ATO lets you deduct them while the property is rented or available for rent on commercial terms. Interest is the same: paid in cash, and deductible. The gap comes from two places.

Principal repayments. On a principal-and-interest loan, part of each repayment pays down the debt. That's cash out. But principal repayments aren't an ATO-listed deduction. A property can look fine at tax time and still drain cash every month.

Capital works. For homes whose construction started after 15 September 1987, the ATO lets owners deduct 2.5% of the construction cost, which isn't the purchase price, each year for 40 years. That's $2,500 a year for every $100,000 of construction cost. No cash leaves your account for it.

On an established home, the deduction depends on when construction started and on the construction cost, and the 40 years are counted from completion, not from purchase. For homes bought from 7:30pm AEST 9 May 2017, deductions for certain second-hand depreciating assets are restricted too, unless the owner is carrying on a rental business or is an excluded entity.

How the 1 July 2027 limit moves the tax line

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is law. Schedule 2 is titled 'Limit negative gearing for residential property to new builds', and the ATO says the changes apply from 1 July 2027.

The test is the purchase date. Properties held at 7:30pm AEST on 12 May 2026, Budget night, are exempt from the negative gearing changes.

Buy an established home after that, and Treasury says a loss can still be deducted against other residential property income, including capital gains, with excess losses carried forward to future years. It can't be deducted against wages or other non-residential income. The Parliamentary Library puts it plainly: from 1 July 2027, net losses from existing residential dwellings won't be deductible against salary, wages or business income. Quarantined and carried forward.

New builds can continue to be negatively geared before and after 1 July 2027.

Back to the table. The cash line is the same in both columns. If it's negative, either owner covers the shortfall from their own pocket every year. The split comes at tax time. On the new build, the loss can still come off wages. On the established home, it waits. Our guide on how negative gearing works covers that comparison.

What counts as new isn't settled yet. On 4 August 2026 the Treasurer released exposure draft legislation with a draft definition: generally a home that adds to housing supply and was bought within 24 months of a certificate of occupancy. The final wording goes into primary legislation after consultation. Don't assume any property qualifies. Read what counts as a new build before weighing up any new build investment property in Queensland.

Your own tax position is a question for a registered tax agent.

How much debt a median Queensland rent covers

The RTA's median weekly rent on new Queensland bonds for a 3-bedroom house was $630 in the June quarter of 2026. That's $32,760 a year before any empty weeks. The RBA's average rate on new variable investor loans in July 2026 was 6.4%.

At that RTA June quarter 2026 rent and RBA July 2026 rate, $32,760 covers the interest on about $511,900 of debt. Interest only. Nothing's left for rates, insurance, management, repairs or vacancy. Borrow more and the rent can't cover even the interest.

Lender rates today may be higher than that. The July figure predates the cash rate rise to 4.60% on 30 September 2026.

Two cautions. The $630 is a statewide median, not the rent for any suburb or home. And dwelling types don't line up neatly. The state's 2-bedroom flat median was $650 that quarter. Don't read it as units out-earning houses. If you're comparing yields by area, use local figures for the area and home type you're looking at.

The costs that decide the cash line

Moneysmart lists the ongoing costs of an investment property: council and water rates, building insurance, landlord insurance, body corporate fees, land tax, property management fees if you use an agent, and repairs and maintenance. Most of these depend on the specific property, so the table says 'your figure'. Get each one from the property's paperwork.

Land tax depends on everything you own. An individual pays Queensland land tax if the total taxable value of their freehold land at 30 June is $600,000 or more. Up to $999,999 it's $500 plus 1 cent for each $1 over $600,000, so QRO's own example comes to $1,300 on $680,000. One property can mean no land tax for one buyer and a bill for another. There's more on land tax on an investment property in our guide.

Interest-only periods end. Then repayments rise to cover the amount borrowed plus the interest. A cash line that only works interest-only has a date on it.

Rates and vacancy. Moneysmart warns that rental income may not cover your mortgage payments and other expenses, and that a rise in interest rates means higher repayments. It lists vacancy as a risk too. Its advice: don't rely on rental income to cover the mortgage.

What you can borrow, and at what rate, is something a lender or broker assesses, not FAA Property. Financial advice sits with other FAA Group companies, which are authorised representatives of Lifespan Financial Planning Pty Ltd (AFSL 229892). Credit assistance is provided under Australian Credit Licence 388789, which authorises credit services only. FAA is not a lender.

Buying before it's built? Costs can start before the first rent. See holding costs on a house-and-land contract and finance when buying off the plan.

Positively geared property and the tax on the surplus

A positively geared property is one where the rent is more than the deductions. The catch: Moneysmart says that for positively geared investments, you may pay tax on your rental income. The surplus adds to your taxable income, so you can keep less than the cash line shows. Even deductible expenses have to be paid up front. The bill comes first. The deduction comes later.

For an established home bought after Budget night, carried-forward losses can be deducted against residential property income, including capital gains. So a later surplus from that kind of home can be used against them. They still can't cross onto wages.

Checking a cash flow claim before you buy

Moneysmart tells investors to be wary of property investment advice from groups of service providers, and of seminars that use high-pressure sales tactics. That covers us too. FAA Property earns a commission from builders and developers when a property purchase proceeds, and the strategy session costs nothing. We source new-build, house-and-land and off-market investment property across South East Queensland. Test what any seller tells you, us included, against these checks.

• The figure is gross rent with nothing taken off.

  Why it happens:

  Gross rent is the full rent before agent fees.

  Why it matters:

  Every cost on Moneysmart's list comes out of it.

  What you can do:

  Ask for a figure on every cost row. A blank isn't nil.

• It assumes interest-only repayments.

  Why it happens:

  Repayments are lower while you pay only interest.

  Why it matters:

  Interest-only periods end, and repayments then rise.

  What you can do:

  Ask for the cash line on principal and interest as well.

• The interest rate is out of date.

  Why it happens:

  Published rates lag. The RBA's July 2026 figure came out on 7 September 2026.

  Why it matters:

  The cash rate rose again on 30 September 2026.

  What you can do:

  Use the rate a lender or broker quotes you today.

• Land tax is missing, or shown as a fixed amount.

  Why it happens:

  It's assessed on the total land an individual holds.

  Why it matters:

  One property can mean no land tax for one buyer and a bill for another.

  What you can do:

  Apply QRO's rates to your own total.

• A tax result is shown as cash.

  Why it happens:

  Capital works cost no cash, and principal isn't an ATO-listed deduction.

  Why it matters:

  Your bank account can say something else, and a surplus may be taxed.

  What you can do:

  Ask for the two lines separately. Read the cash line first.

• New-build status is assumed.

  Why it happens:

  The 2027 carve-out turns on it.

  Why it matters:

  The definition was still a draft at the last primary source checked.

  What you can do:

  Check the current definition and get tax advice on your own position.

Positive cash flow questions

Where to next

• Dual key, dual occupancy and duplex compared
• New build investment property in Queensland
• Land tax on an investment property