Negative Gearing

Negative Gearing

Negative Gearing of investment property in Australia refers to a situation whereby the interest and the other costs incurred to acquire that property are more than the rental income received. This cash loss is offset against other sources of income thus reducing the amount of income tax payable.

In other words, with a negatively-geared investment you make a cash loss, but the effects of this cash loss are buffered or absorbed by the tax system meaning that your loss is significantly reduced.

The major factor to consider when purchasing an investment property is new or existing. There is a major advantage with a new property. A new property allows you to maximize your tax advantages and reduce your out of pocket costs that you face to fund the property.

To find out more contact Brain - our professionally accredited property investment advisor. Email Brian