Negative gearing is a system where the rent earned on a property – after removing other expenses – doesn’t cover the interest on the mortgage. You can then take that loss, and use it to offset other taxable income. It’s a system where you deliberately run what is a effectively a business at a loss, hoping to offset that loss later by selling the property and pocketing capital gains (which will also be tax discounted)
Following up on last night’s post, let’s look at tonight’s budget. First off, that tax cut.
So… Peter Costello, one of the major contributors to the problems with the budget, is calling for income tax cuts. Apparently, the levels he left it at aren’t right anymore.