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Negative Gearing

How do you negative gear?

With negative gearing, the cost of owing an investment exceeds the income it produces.
Put simply, your investment must make a loss before you can claim the tax benefits.
It works not only for property, but also shares and bonds.

Negative Gearing can also offer tax benefits?

Under current Australian Taxation Laws, an investor may be able to claim a deduction for the loss, which can be offset against other taxable income such as salaries, business income or other investment income.
For example, let's suppose you buy an investment (it could be shares, managed funds, a rental property, etc) for $100,000 and pay $6,000 in interest and receive $3,000 income from the investment. You have a loss before tax of $3,000. Suppose you have a well-paid job and pay tax on your salary at the top rate of 48.5%. You can now deduct this loss from your taxable income, and reduce your tax bill by $1455 (48.5% of $3000). The tax saving reduces your cost of borrowing.
You only get a tax benefit if you earn other taxable income in the first place. If you earned nothing else apart from his investment, you’re just left with a $3,000 loss.

Risks associated with gearing

There is an inherent risk associated with borrowing to fund an investment. While gearing can help you increase your gain on borrowed funds, the losses can be large in adverse circumstances.

Negative Gearing… Friend or Foe?

Often proclaimed as a property investor's best friend, negative gearing is a strategy that
Provides immediate tax benefits while also gaining capital appreciation.
Sadly, it is a concept that few people really understand and causes a lot of financial heartache.
Borrowing to invest, or gearing, can be a powerful means to build wealth. This of course depends on your own personal needs and circumstances.

A Total Package designed to maximise Your Total Financial Security

Tony Taktak & Associates provides a total advisory rental property investment programme.
Our investment strategy is not new, it is not complicated and it is not a get - rich - scheme.
What we do offer is a proven, reliable path to your strong financial future.
Have you ever stopped to think about all the money that you will slip through fingers while you are working? Let alone the total tax you will pay plus the total interest you will pay on your house mortgage.

If you are looking a getting into business or are already in business, Tony Taktak & Associates can show how to build wealth, through long - term investments.


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