At its core, negative gearing is a tax deduction available
to property investors when their rental income falls short of their loan
interest and property expenses.
This difference between income and expenses (the "negative”
part of gearing) can be deducted from the investor’s taxable income, which can
provide financial relief, particularly in the early years of property
ownership.
This practice incentivises investors to purchase and
maintain rental properties, as it can soften the cash flow burden until the
property appreciates or rental income grows to cover costs.
Negative gearing is not an exclusive benefit for property
investors; it’s a foundational tax principle applied across many asset classes
in Australia, including shares, bonds, and business investments.
Singling out property investors for using negative gearing
ignores the widespread application of this principle across different types of
investments.
Targeting property investment alone ignores the broader
purpose of negative gearing as an investment incentive across the board.
RealRenta has all the
tools that a property manager has but for less than ¼ the cost of a property
manager.
You can now manage your Residential, Commercial or share/student
accommodation property
Join now and the cost
is less than a cup of coffee a week to manage your rental property.
RealRenta also has a
free vision, so why not check it out.
Jason Gwerder
Thursday, 30 January 2025