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Negative Gearing

Buying a rental property? Creating wealth through property investment is a very popular way to secure your financial future


What is Negative Gearing?

In its most simplistic form, negative gearing for investment housing allows investors to deduct their losses against their personal taxable income. These losses may occur when the investor incurs costs such as interest on a home loan as well as maintenance and other small expenses on an investment property. However, it is important to note that negative gearing is not unique to the property asset class; it also applies to businesses and shares in Australia. The most important thing to realise about asset negative gearing is that it is fundamentally off-setting a loss. Although you can claim that loss on your tax return, the investor must carry the cost of that loss throughout the year. Ultimately, when investing, most purchasers would be hoping that rental rates increase over time and result in the asset moving from a loss-making one to an income producing one. Cameron Kusher - RP Data senior research analyst.

Video Series

The Video series provided highlight various tax tips and address some of the issues to think about when buying a rental property. If you own a rental property, or are thinking of buying one, this series of short videos will help you understand your record-keeping and tax obligations.

The videos discuss some of the tax issues that you will came across when buying, owning, and selling a rental property.

comTo place some of these rules into perspective use our simple Negative Gearing Tax Simulator to determine how much an investment property could be costing you after expenses. Please read the Disclaimer and Disclosure below before using this simulator.