Negative Gearing – What is it Good For?

Last updated: Jun 6, 2019

Let’s say that your Investment Property is costing you money – is this is a good thing?


How? Because you have access to Negative Gearing.

Negative Gearing is where you use the loss you are making on your Investment Property and the Depreciation, and reduce your taxable income by that amount – this therefore provides you with a tax savings/refund which can counteract the initial cost for you.

See an example below:


Income Rent: $25,000
Expenses Interest: $20,000
  Property Manager: $2,000
  Insurance: $2,000
  Rates: $2,000
  Maintenance: $2,000
  Cost: $3,000
  Depreciation est.: $9,000
  Total (Tax Loss): $12,000
  this is what you will reduce your taxable income by
  Tax Loss: $12,000
  Marginal Tax Rate: 34.5%
  Tax Savings / Refund: $4,140
  Original Cost: $3,000
  Tax Savings / Refund: $4,140
  Cash Positive after using Negative Gearing! $1,140


Do you know if you have Negative Gearing available to you?
Have a chat with the team so they can complete a complimentary review of your Investment Property to ensure you are using it to your advantage!



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