What is negative gearing |
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| FAQ - ABOUT HOME LOANS |
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Negative gearing involves using a home loan to purchase a property and then renting that property out to make an income. The property is considered negatively geared when the income generated from the rental does not cover the costs associated with running the property and the interest on the home loan used to buy it. Any losses incurred during this process are tax deductible and can then be offset against other assessable income and boost returns. The profit occurs when the value of the property goes up over time, resulting in capital gains outweighing the losses incurred during the negative renting period. |
| Last Updated ( Tuesday, 25 May 2010 12:39 ) |
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