diff --git a/gio/glocalfile.c b/gio/glocalfile.c
index a55bddb68..8b0805005 100644
--- a/gio/glocalfile.c
+++ b/gio/glocalfile.c
@@ -1197,6 +1197,7 @@ g_local_file_set_display_name (GFile         *file,
     {
       g_set_error_literal (error, G_IO_ERROR, G_IO_ERROR_EXISTS,
                            _("Can’t rename file, filename already exists"));
+      g_object_unref (new_file);
       return NULL;
     }