| What is Negative Gearing |
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Negative gearing occurs when the income from your investment is less than the interest paid in servicing the loan for that investment. It is a process by which investors can offset losses incurred during the course of owning an income bearing investment against income from other sources. Simply put, this means that if it costs you more to have an investment than you make on that investment, you can deduct this amount from your taxable income from other sources. Initial expenses that may be deducted include valuation fees, loan establishment fees and lender's mortgage insurance. Ongoing expenses may include insurance on the property, property management fees, body corporate levies, council and water rates, gardening and maintenance and advertising costs. Speak with your accountant and other financial specialists about the implications of negative gearing before you purchase your investment property. |
| Last Updated ( Friday, 03 October 2008 12:17 ) |
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