NEGATIVE
GEARING
Negative Gearing your Property.
Q. “What is negative gearing?”
A. “A negatively geared investment is one where the interest on the amount borrowed exceeds the net income received.”
What does this really mean? As a Paris Financial small business tax professional will advise, the ATO allows investors to claim a tax deduction on the difference between the interest paid and the net income from the investment. The key benefit of negative gearing is that it enables you to offset costs associated with your loan and renting the property against your salary and wages – thereby reducing the amount of income tax you are required to pay. When you own an investment property, we have many tax tips to share. You may be entitled to deductions such as:
- The interest on the loan
- Letting Agent Fees to manage the property
- Council Rates & Land Tax
- Depreciation of Fixtures and Fittings, including furniture
- The cost of setting up the loan, including Establishment Fees
- The costs of advertising for tenants
- Owner’s Corporation Levies
- Repairs and Maintenance
Not only do you receive tax benefits, your rental property may also increase in value during the year. To succeed in property investment through negative gearing, you need to have a clear understanding of what is involved. Our property tax specialists will work closely with you to assess your personal circumstances to assist you in making a decision on how negative gearing could work for you.