What is Negative Gearing?

Negative Gearing is the capacity to claim the costs of investment as an offset against total income. Costs include interest paid on borrowings, property depreciation and expenses where there is an expectation that in the future profits will be made.

  Tax Deductions

The following is an overview of permitted tax deductions and how you as an investor can take advantage of these deductions and reduce the amount of tax you pay each payday

• Difference between rental income and interest payable
• Valuation fee
• Mortgage costs
• Loan establishment fee
• Property inspection costs
• Council rates
• Property insurance
• Maintenance costs
• Management  or letting fees
• Other acceptable costs (as per tax schedule)
• Building depreciation (2.5% each year)
• Fixtures and Fittings depreciation (20% approx. over 5 years)

*Other expenses are allowable and a Property Depreciation consultant will advise you on the total allowable depreciation items you may claim for each investment property.

Cash Flow

The combination of: rental income, and the reduction in your income tax each pay day will provide you with an income stream or cash flow which allows you to own investment property at little or in some cases no personal cost.