negative gearing

In its simplest form, negative gearing occurs when the interest that investors are paying on the loan is more than the income or rental return generated by their asset. As a tax incentive, it allows investors to claim the costs of holding the asset as a direct deduction on their total income. By claiming deductions, investors reduce their taxable income and, ultimately, their tax payable. As the income tax is reduced, their cash flow is improved.

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Comments

Peter Wilkinson
The problem stems from accountants and others living in the past and assuming growth is going to happen, a lot of advisors simply imply capital growth is king but doing the numbers when comparing nega.....negative gearing usually looses. Why pay a dollar to save 30 cents it doesn't make sense. Having wor...
Ben Turner
I agree with Todd Hunter (he wrote a great article against NRAS on his blog). Its essentially negative gearing repackaged and remarketed. Run your investment property at a loss to get some tax money b...
David McG
This goes to show if the RBA liked Labour they would have dropped rates sooner and deeper and actually made the investors pay tax instead of being negative geared making the government a windfall in r.....negative gearing which will in turn push rents up if they do abolish it.
Surprising only 5% of Au...
RHONDA
Investors take a massive risk providing accommodation for people. We have to jump thru all the hoops for the banks, they can put the interest rate up at anytime. We have to pay interest, water, rates,.....negative gearing they have to make sure they have enough money each week to cover all the costs, too...

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