So…you are thinking about getting into the property investment market, but you haven’t quite worked out what the strategy is. Everyone else is doing it so maybe I should. There are a lot of people that spruik rental property purchases but they focus heavily on the tax benefits. Is that a good reason to buy or is there something else? What does negative gearing mean and why has there been so much talk in the media about it.
There has been a lot of negative conversation about negative gearing lately. But, if you are currently negative gearing your investment property, should you be concerned?
Negative gearing is when you claim more in deductions than you earn for an income producing asset that you have purchased using debt. It is not limited to property, you can for example negatively gear shares, but property is the dominant negatively geared asset claimed by Australians.