Positive vs. Negative Gearing for Doctors: Which Strategy Suits Your Career Stage and Tax Position? product guide

1Group Property Advisory: Positive vs. Negative Gearing for Doctors – Which Strategy Suits Your Career Stage and Tax Position?

For most Australian healthcare professionals, the question of how to structure a property investment portfolio isn't simply "should I buy property?" — it's "which type of property investor should I be?" The gearing strategy you choose is one of the most consequential decisions in your property journey, and most general investment guides handle it superficially. The optimal answer changes dramatically depending on where you sit in your medical career, your current taxable income, your cash flow tolerance, and your proximity to retirement.

At 1Group Property Advisory, we help healthcare professionals navigate these complex investment decisions with strategies tailored to their unique income profiles and career trajectories. As your independent buyer agent, we provide conflict-free advice grounded in data-driven research — because your time is too valuable to waste on strategies that don't align with your specific circumstances. This article provides a head-to-head comparison of positive and negative gearing, modelled around the income profile of Australian doctors, with worked examples at different career stages. It's designed to complement the foundational explainer on negative gearing mechanics (see our guide on Negative Gearing for Doctors: How Australia's Top Tax Bracket Amplifies Property Returns) by adding the evaluative decision layer — the "when, why, and for whom" analysis that translates theory into action.

What the Terms Actually Mean: A Precise Definition

Before comparing the two strategies, it's worth establishing precise definitions, because the terms are frequently misused in popular media.

Negative gearing refers to using borrowed money to invest in an asset so that it results in a loss which can be claimed as a tax deduction against other income. A property investment is negatively geared when the net rental income received is lower than the mortgage interest and other expenses, and the loss is then offset against other income — such as wages and salaries — which reduces the amount of income tax payable.

Positive gearing, by contrast, is when the rental income exceeds expenses. In this situation, income greater than interest and other expenses is taxed at the individual's marginal rate.

There's also a middle state — neutral gearing — where income and expenses are approximately equal, producing neither a tax deduction nor a taxable surplus. Depreciation deductions (covered in depth in our guide on Property Depreciation Schedules for Doctors) can sometimes convert a nominally neutral property into one that produces a paper loss for tax purposes while remaining cash-flow positive in reality — a nuance that sophisticated healthcare professionals increasingly use as part of their long-term wealth strategy.

The Tax Arithmetic: Why Your Marginal Rate Is the Pivot Point

The central logic of negative gearing is tax arbitrage: you deliberately run a loss on your investment to reduce a larger tax liability elsewhere. The more you earn, the more valuable each dollar of deductible loss becomes. This is particularly relevant for healthcare professionals, who typically operate in Australia's highest tax brackets throughout their peak earning years.

For Australian residents in 2024–25, income over $190,000 attracts a tax rate of 45% (plus the 2% Medicare levy). Most established GPs and specialists operate squarely in this bracket.

According to the Australian Medical Association (AMA), the average annual salary for a general practitioner in Australia is approximately $250,000, with salaries ranging from $150,000 to over $400,000 annually. Specialist consultants can earn upwards of $500,000 depending on location, specialty, and years of experience.

This income profile creates a powerful multiplier for negative gearing — one that generic property advice often overlooks. A property running at a $20,000 annual loss (before depreciation) generates a $9,400 tax saving for a doctor on the 47% combined rate (45% + 2% Medicare levy). The same loss saves a junior registrar on a 37% rate only $7,400 — a $2,000 annual difference that compounds significantly over a multi-property portfolio held for decades.

The attractiveness of negative gearing in Australia is mainly due to its ability to reduce the amount of income tax, and for this reason it can be more beneficial to individuals who are on higher marginal tax rates — precisely the position most healthcare professionals find themselves in.

Positive gearing inverts this logic: a positively geared property adds to your taxable income, which at a doctor's marginal rate means the ATO takes nearly half of every dollar of surplus rental income. The strategy therefore demands a clear rationale beyond simple cash flow preference — one that aligns with your specific career stage and financial objectives.

Head-to-Head Comparison: Negative vs. Positive Gearing for Healthcare Professionals

This comparison framework forms the foundation of how we approach your property brief at 1Group — we don't apply a one-size-fits-all strategy, because your circumstances as a healthcare professional demand tailored, conflict-free advice based on where you actually are in your career journey.

Modelling After-Tax Cash Flow: Two Doctors, Same Property, Different Outcomes

Consider a $900,000 investment property generating $36,000 per year in gross rent (approximately 4% yield), with total holding costs (interest, rates, insurance, management, maintenance) of $58,000 per year. This produces a $22,000 pre-depreciation loss.

Dr. A — Specialist Surgeon, Taxable Income $480,000

• Marginal tax rate: 47% (45% + Medicare levy)
• Tax saving from $22,000 loss: $10,340/year
• Real out-of-pocket cost: $22,000 − $10,340 = $11,660/year
• Annualised cost per week: approximately $224/week

For Dr. A, the ATO is effectively subsidising 47 cents of every dollar of loss. If the property appreciates at 6% per annum (a conservative long-run assumption for quality capital city assets based on our data-driven research), the annual capital gain of $54,000 dwarfs the after-tax holding cost. The negative gearing strategy is a highly efficient wealth accelerator at this income level — precisely the scenario where property investment delivers maximum value for time-poor, high-income healthcare professionals.

Dr. B — GP on Parental Leave, Taxable Income $55,000

• Marginal tax rate: 30%
• Tax saving from $22,000 loss: $6,600/year
• Real out-of-pocket cost: $22,000 − $6,600 = $15,400/year
• Annualised cost per week: approximately $296/week

For Dr. B, the same property costs $72/week more to hold. More critically, on a reduced parental leave income, the cash flow demand of a $15,400 annual shortfall may be genuinely difficult to service without drawing on savings or a buffer account. The tax benefit exists but is significantly diluted.

This is the core insight that drives our approach at 1Group Property Advisory: the value of negative gearing is not fixed — it scales directly with your marginal tax rate. A strategy that is highly efficient at $480,000 of income is materially less attractive at $55,000. Understanding this relationship is fundamental to making informed decisions about your property portfolio.

When Negative Gearing Delivers Maximum Value for Healthcare Professionals

Negative gearing is most powerful for doctors in the following circumstances — scenarios we encounter regularly when working with healthcare professionals on their property brief:

1. Peak earning years — consultant and specialist phase

In Australia, consultants and specialist doctors command substantial salaries due to their high level of expertise and extended training; on average, a consultant can expect to earn between $200,000 to $310,000 annually, though some physicians in private practice can earn significantly more. At these income levels, the 45% marginal rate applies to a large portion of earnings, making every deductible dollar worth $0.47 in tax savings. This is the prime window for accumulating negatively geared, high-growth assets — and it's where property investment can have the most profound impact on long-term wealth creation.

As your independent buyer agent, we focus on identifying properties in this phase that combine strong capital growth potential with maximum tax efficiency, so your investment dollars work as hard as you do.

2. High-interest-rate environments

At the start of 2024, the 4.35% cash rate was significantly higher than the 1.5–2.5% range seen in the preceding six years, and during 2023–24, an overwhelming majority of landlords were required to absorb annual trading losses of between $20,000 and $35,000. For high-income healthcare professionals, this environment paradoxically increases the value of negative gearing, because higher interest costs generate larger deductible losses, which translate into larger tax refunds at the 47% rate.

This counterintuitive dynamic is precisely why conflict-free advice matters — what appears challenging on the surface can actually enhance the tax efficiency of your investment when you're operating at the highest marginal rate.

3. Early portfolio-building phase

When a doctor holds one or two properties and has significant borrowing capacity (see our guide on How to Calculate Your Borrowing Capacity as a Doctor in Australia), accepting negative cash flow in exchange for high-growth assets is a rational trade. The tax subsidy effectively reduces the cost of holding premium assets that would otherwise be unaffordable on a pure yield basis.

At 1Group, our due diligence process makes sure that when you accept negative cash flow, you're doing so for properties with genuine growth potential — not simply because they're negatively geared. The strategy must serve your long-term wealth objectives, not exist for its own sake.

4. New builds and depreciation amplification

Research published in the Journal of Housing and the Built Environment (2023) found that negative gearing is being used to cushion any net rental loss during periods of low yield while investors expect capital growth over their holding period. This is amplified when depreciation deductions are stacked on top of operating losses through a quantity surveyor report — a strategy explored in depth in our guide on Property Depreciation Schedules for Doctors.

Our data-driven research approach identifies opportunities where depreciation benefits can materially improve the after-tax position of negatively geared properties, creating a more sustainable holding cost for healthcare professionals building their portfolios.

When Positive Gearing Becomes More Attractive for Healthcare Professionals

Despite the dominance of negative gearing in Australian property discourse, there are specific circumstances where positive gearing is the strategically superior choice for doctors — scenarios we actively plan for when developing your property brief.

1. Parental leave and income interruptions

When a doctor takes parental leave — a period that can reduce taxable income from $400,000+ to $55,000–$80,000 — the marginal tax rate drops from 47% to 30% or lower. The tax subsidy on a negatively geared property shrinks by approximately 35%, while the cash flow demand remains unchanged. A positively geared property in this scenario provides income to offset the reduction in clinical earnings, without creating additional tax liability at a rate that matters.

This is where property investment demonstrates its true value: a well-structured portfolio anticipates these career transitions rather than reacting to them. As your independent buyer agent, we help you plan for these scenarios years in advance, so your portfolio evolves with your career.

2. Approaching retirement or transitioning to part-time work

As a doctor scales back clinical hours, taxable income may fall below $135,000 — below the 37% threshold. For income between $135,001 and $190,000, the tax rate is 37%, and for income over $190,000, it is 45%. A portfolio of negatively geared properties that made sense at a 47% rate becomes progressively less efficient as income falls. Transitioning to positively geared assets — or properties that have naturally drifted into positive territory as rents have risen over time — generates income without the capital growth dependency that underpins the negative gearing model.

This transition is a fundamental shift in investment strategy, one that requires careful planning and conflict-free advice to execute effectively. Healthcare professionals deserve guidance that prioritises their long-term wealth over transaction volume.

3. Portfolio maturity and serviceability constraints

Positive gearing can provide steady income, stronger cash flow, and improved borrowing power for Australian investors. When a doctor's portfolio has grown to three or more properties, lenders assess the net rental position of the entire portfolio when calculating serviceability. A mix of positively and negatively geared properties can improve the overall borrowing profile, enabling further acquisitions. A portfolio that is entirely negatively geared may hit a serviceability ceiling despite strong asset values (see our guide on Building a Property Portfolio as a Doctor).

Understanding these lending dynamics is crucial for healthcare professionals who want to build substantial property portfolios. Our data-driven research extends beyond individual property selection to portfolio-level strategy, so each acquisition enhances rather than constrains your future options.

4. High-yield regional markets

The highest rental yields in Australia are found in regional Western Australia and the Northern Territory, with the average house in country NT yielding 6.7% and investors able to expect an 8% annual return on units in rural WA. Australia's national average rental yield sits at 3.74% in 2025. For a doctor seeking income diversification — particularly one near retirement — a regional high-yield property may deliver better outcomes than a low-yield capital city asset that requires ongoing cash subsidisation.

However, high yields alone don't justify an investment. Our due diligence process examines the sustainability of rental demand, employment drivers, population trends, and infrastructure investment to make sure any regional property recommendation is backed by evidence, not just attractive headline yields.

The Neutral Gearing Sweet Spot: Depreciation as the Bridge

There's a hybrid position that sophisticated doctor-investors increasingly target — and one we actively structure for healthcare professionals at 1Group: a property that is cash-flow neutral or mildly positive before depreciation, but produces a paper loss after depreciation is claimed. This allows the investor to:

1. Avoid the cash flow drain of a genuinely negatively geared property
2. Still generate a deductible tax loss through non-cash depreciation claims
3. Accumulate a high-growth asset without ongoing capital injections

This approach is particularly powerful with new residential builds or off-the-plan purchases, where Division 40 (plant and equipment) and Division 43 (capital works) deductions are maximised. A $750,000 new build with $18,000 in annual depreciation deductions could be cash-flow neutral while producing a $12,000–$15,000 paper loss for tax purposes — generating a $5,640–$7,050 tax refund at the 47% rate without any real out-of-pocket cost.

At 1Group Property Advisory, we work closely with quantity surveyors and tax specialists to identify properties that maximise depreciation benefits while maintaining cash flow neutrality — a strategy that is particularly effective for healthcare professionals in their peak earning years who want tax efficiency without cash flow pressure. This is property investment at its most sophisticated: aligning tax benefits, cash flow sustainability, and capital growth potential in a single asset.

Career-Stage Decision Framework for Healthcare Professionals

Your optimal gearing strategy isn't about personal preference — it's about where you are in your medical career. Here's how we approach property briefs for healthcare professionals at different stages:

Junior doctor / registrar (taxable income: $85,000–$150,000)

• Marginal rate: 30–37%
• Recommended gearing approach: Neutral to mildly negative, with strong depreciation component. Avoid deeply negative gearing — the tax benefit is insufficient to justify heavy cash flow demands on a junior salary.
• Key priority: Establish borrowing capacity and structure correctly from the outset (see our guide on Property Ownership Structures for Doctors). The decisions you make now will impact your portfolio for decades.
• 1Group approach: We focus on properties that balance modest holding costs with genuine growth potential, establishing a foundation for portfolio expansion as your income increases.

Senior registrar / fellow (taxable income: $150,000–$220,000)

• Marginal rate: 37–45%
• Recommended gearing approach: Moderate negative gearing on high-growth capital city assets. The tax benefit is meaningful but not yet at its maximum.
• Key priority: Use medico lending privileges to enter the market with minimal LMI exposure (see our guide on Medico Home Loans Explained).
• 1Group approach: As your independent buyer agent, we use your improving borrowing capacity to secure properties in established growth corridors, positioning you for the wealth accumulation phase ahead.

Consultant / specialist — peak earning years (taxable income: $250,000–$600,000+)

• Marginal rate: 47%
• Recommended gearing approach: Aggressively negative gearing on premium growth assets. Every dollar of deductible loss is worth $0.47 in tax savings. This is the optimal window to accumulate high-value assets.
• Key priority: Stack depreciation deductions on top of operating losses to maximise the tax-efficiency of each property.
• 1Group approach: This is where property investment delivers maximum value for time-poor, high-income healthcare professionals. Our data-driven research identifies premium assets in high-growth locations, our conflict-free advice makes sure you're not overpaying, and our due diligence process validates every assumption before you commit. From your property brief to settlement, we manage the entire journey so you can focus on your practice.

Established practitioner / pre-retirement (taxable income declining)

• Marginal rate: Falling from 47% toward 30% or lower
• Recommended gearing approach: Transition toward neutral and positively geared properties. Consider whether existing negatively geared assets have drifted into positive territory as rents have risen. Evaluate CGT timing carefully (see our guide on Capital Gains Tax Strategies for Doctor Property Investors).
• Key priority: Replace tax deductions with income-generating assets that support lifestyle without clinical income dependency.
• 1Group approach: We help healthcare professionals transition their portfolios from wealth accumulation to wealth preservation and income generation, so your property investments continue to serve your evolving objectives as you scale back clinical work.

The Risk Profiles Are Not Equal

Negative and positive gearing carry structurally different risk profiles — not just different tax outcomes. This is where conflict-free advice becomes essential, because different advisors may have different incentives when recommending one strategy over another.

Negative gearing risk: The strategy depends on capital growth to justify the holding cost. Research published in the Journal of Housing and the Built Environment found a negative relationship between mortgage lending rate and number of investors, indicating that a rising lending rate will increase expenses and contribute to low yield. If capital growth stalls for several years — as occurred in parts of Sydney and Melbourne between 2017 and 2019 — a negatively geared investor is paying out-of-pocket for an asset that is not appreciating. For a doctor with strong income and a long investment horizon, this is manageable. For a doctor in a cash-constrained period (parental leave, illness, part-time work), it can create genuine financial stress.

Our data-driven research approach at 1Group focuses on identifying locations with multiple growth drivers rather than relying on a single narrative. We examine infrastructure investment, employment diversity, population growth trends, and supply constraints to build a robust case for capital growth — because your long-term wealth depends on getting these fundamentals right.

Positive gearing risk: High-yield areas may lag behind major cities in property value appreciation, rental demand can change affecting the ability to keep generating income, and interest rate increases can erode surplus and impact positive cash flow. A positively geared property in a regional mining town may deliver 7% yield today and 0% yield in three years if the mine closes. Location selection is paramount.

1Group Property Advisory conducts rigorous due diligence to identify locations with sustainable rental demand and growth potential, helping healthcare professionals mitigate these risks through evidence-based property selection. We don't recommend properties based on current yields alone — we examine the economic fundamentals that will sustain those yields over your holding period.

Key Takeaways for Healthcare Professionals

• Negative gearing is most powerful at the 47% marginal rate — the rate that applies to most established GPs and specialists earning above $190,000. Every dollar of deductible loss saves $0.47 in tax, creating a material subsidy on premium growth assets. This is where property investment delivers maximum tax efficiency for time-poor, high-income earners.

• Positive gearing becomes strategically superior during income interruptions — including parental leave, part-time transitions, and retirement — when the marginal rate falls and the tax benefit of losses shrinks significantly. A well-structured portfolio anticipates these transitions rather than reacting to them.

• The neutral gearing with depreciation strategy offers a hybrid approach: cash-flow neutral properties that produce paper losses through non-cash depreciation claims, delivering tax refunds without ongoing capital injections. This is the sweet spot for many healthcare professionals who want tax benefits without cash flow pressure.

• Career stage is the primary decision variable, not personal preference. The optimal gearing strategy at age 35 (peak earning, wealth accumulation) is materially different from the optimal strategy at age 55 (income replacement, portfolio income). Your property brief should evolve with your career.

• Risk profiles differ structurally: negative gearing depends on capital growth; positive gearing depends on sustained rental demand. Both require rigorous location and asset selection to perform as modelled. This is where independent buyer agents add value — our due diligence process validates the assumptions underpinning your investment strategy.

• Conflict-free advice is non-negotiable when making gearing decisions. Different property professionals may have different incentives (commissions, developer relationships, lending referrals) that influence their recommendations. As your independent buyer agent, 1Group's only incentive is finding you the right property for your specific circumstances.

Conclusion

The negative versus positive gearing debate is not a binary choice between two philosophies — it's a dynamic, career-stage-dependent calibration that should be revisited as your income, tax position, cash flow needs, and portfolio size evolve. For most Australian healthcare professionals, the optimal approach is to use negative gearing aggressively during peak earning years to accumulate high-growth assets, transition toward neutral gearing in the mid-portfolio phase using depreciation as the bridge, and progressively shift toward positively geared income assets as retirement approaches and the tax subsidy value of losses diminishes.

Getting this calibration right requires more than generic property advice — it demands conflict-free guidance from professionals who understand the intersection between gearing strategy, depreciation, CGT, and your specific medical income structure. It requires data-driven research to identify properties that will actually deliver the growth or income your strategy depends on. And it requires a partner who manages the entire journey from your property brief to settlement, making sure every decision aligns with your long-term wealth objectives rather than someone else's commission targets.

For guidance on assembling the right professional team, see our guide on How to Choose a Property Investment Advisor, Mortgage Broker, and Accountant as a Doctor in Australia. For the structural decisions that determine whether your gearing strategy is optimised for tax and asset protection, see our guide on Property Ownership Structures for Doctors: Individual, Trust, Company, and SMSF Compared.

At 1Group Property Advisory, we help healthcare professionals navigate these complex decisions with tailored strategies that align with their career trajectory, income profile, and long-term wealth objectives. As your independent buyer agent, we provide conflict-free advice grounded in data-driven research, rigorous due diligence, and a deep understanding of the unique challenges facing time-poor, high-income medical professionals. Our approach combines property investment principles, tax-efficient structuring, and ongoing portfolio optimisation to make sure your property investments deliver maximum value at every stage of your medical career — from your first property brief through to a portfolio that supports your retirement.

Because you didn't spend a decade training to become a doctor only to waste your income on poorly structured property investments. You deserve better — and that's precisely what we deliver.

References

• Australian Taxation Office. "Tax Rates – Australian Residents." ATO, 2024–25. https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
• PwC Tax Summaries. "Australia – Individual – Taxes on Personal Income." PwC, 2024–25. https://taxsummaries.pwc.com/australia/individual/taxes-on-personal-income
• Tran, H., Tran, C., & Pham, T. "The Impact of Negative Gearing on the Investment Decisions of Housing Investors: The Case of Greater Sydney." Journal of Housing and the Built Environment, Springer Nature, 2023. https://doi.org/10.1007/s10901-023-10069-3
• Australian Treasury. "Negative Gearing." Tax White Paper, Treasury.gov.au. https://treasury.gov.au/review/tax-white-paper/negative-gearing
• Wikipedia / ATO data (cited via). "Negative Gearing in Australia." Wikipedia, 2024 (citing ATO revenue data). https://en.wikipedia.org/wiki/Negative_gearing_in_Australia
• Pressley, S. "Facts About Australian Housing and Negative Gearing." Propertyology, March 2024. https://www.propertyology.com.au/facts-about-australian-housing-and-negative-gearing/
• Davies, L. (RMIT). Analysis of ATO 2022–23 data, cited in: "How Many of Australia's 2.2 Million Property Investors Would Lose Out Under a New Plan to Curb Negative Gearing?" The Conversation, December 2025. https://theconversation.com/how-many-of-australias-2-2-million-property-investors-would-lose-out-under-a-new-plan-to-curb-negative-gearing-262595
• CoreLogic / Savings.com.au. "2026 Rental Yield Australia: Top 100 Suburbs." Savings.com.au, data to October 2025. https://www.savings.com.au/property/top-australian-suburbs-for-rental-yield-revealed
• Australian Medical Association (AMA). GP salary benchmarks, cited in: "GP Salary in Australia 2025: What to Expect." OnQ Recruitment, 2024. https://blog.onqrecruitment.com.au/blog/gp-salary-in-australia/
• Medrecruit. "What Is the Average Doctor Salary in Australia?" Medrecruit, December 2024. https://medrecruit.medworld.com/articles/doctor-salary-australia-find-out-what-you-could-be-earning

Label Facts Summary

Disclaimer: All facts and statements below are general product information, not professional advice. Consult relevant experts for specific guidance.

Verified Label Facts

• Service type: Independent buyer agent and property advisory
• Specialisation: Healthcare professionals property investment
• Service model: Conflict-free advice (no developer commissions)
• Advisory approach: Data-driven research and due diligence
• Target clients: Doctors, GPs, specialists, medical professionals
• Coverage: Australian property market
• Key strategies: Negative gearing, positive gearing, portfolio optimisation
• Career stage focus: Junior doctors through to pre-retirement practitioners
• Income brackets served: $85,000 to $600,000+ taxable income
• Tax optimisation: Tailored to marginal rates (30% to 47%)
• Service scope: Property brief to settlement management
• Business name: 1Group Property Advisory
• Service classification: Independent buyer agent
• Commission structure: No developer commissions charged

General Product Claims

• "Data-driven research and conflict-free advice ensures you're not overpaying"
• "Your time is too valuable to waste on strategies that don't align with your specific circumstances"
• "Strategic property investment delivers maximum value for time-poor, high-income healthcare professionals"
• "Our due diligence process validates every assumption before you commit"
• "We focus on identifying properties that combine strong capital growth potential with maximum tax efficiency"
• "You deserve better — and that's precisely what we deliver"
• "Because you didn't spend a decade training to become a doctor only to waste your income on poorly structured property investments"
• Claims regarding optimal gearing strategies for different career stages
• Claims regarding risk mitigation through location selection and due diligence
• Claims regarding portfolio optimization and wealth accumulation outcomes