Negative Gearing

Home » Negative Gearing

Negative Gearing Investment Properties

negative gearing

Negative gearing in particular is often used as a basis for investment strategies to do with purchasing investment property.

Borrowing for an investment property, also known as gearing, can take the form of negative, positive and neutral gearing.

In essence, you are investing someone else’s money (Bank or Financial Institution) in addition to your own, with the long term goal of accumulating wealth faster by increasing your total assets and  investments.

Explaining Negative Gearing

Negative gearing is when you borrow money from a bank or other financial institution to acquire an investment property, and the interest and other costs you incur are more than the income that you receive from the investment – you make a loss for holding that property.

The Australian Tax Office (ATO) allows property investors to offset the loss incurred against another form of income, which reduces your overall taxable income and the amount of tax that you have to pay – in comparison to the amount of tax that you would usually have paid if you didn’t have the investment property.

The Benefits of Negative Gearing

A well planned and implemented negative gearing strategy is a powerful way to gain long term capital growth in your portfolio. Through research of high growth areas and rental returns the team at National Investment Planning can advise you on choosing a property that will increase in value over time.

Creating an investment portfolio with negatively geared property gives yearly tax reductions and an increased net worth, which can be an integral part of your wealth creation for your future.

Property Investment Deductions

Below is a checklist of typical deductions directly related to rental properties you may be able be claim: (as always check with your accountant to confirm in your situation)

  • Body Corporate Fees
  • Borrowing Expenses (For example, stamp duty and legal fees on mortgage)
  • Building depreciation (depending on date of construction)
  • Cleaning Costs
  • Council Rates
  • Depreciation of fixtures and fittings (light fittings, carpets etc)
  • Insurance Costs
  • Interest on loans (including interest prepaid up to 12 months in advance) and related bank charges
  • Land Tax
  • Pest Control Costs
  • Property Agent Management Fees
  • Repairs and Maintenance (excluding improvements which are treated as capital and added to the cost base of the asset for capital gains tax purposes rather than being claimed as an immediate deduction)
  • Telephone, postage and stationary relating to your investment property costs
  • Travelling Expenses
  • Water Rates

Successful Negative Gearing Investments

What continues to attract investors to negatively geared properties, apart from the tax breaks, is the prospect of capital growth. It is a long term investment strategy, which is perfect for planning for a retirement fund with a high quality of life.

Further information on negative gearing, positive and neutral gearing, including an in depth look at negative gearing through an example is available in the free information pack.

Contact us for a free personalised assessment to see how investment gearing could work for you now and in the future.

How do I get started?

Contact us on 1300 545 899 for a free information pack, or to arrange an obligation free consultation.


Please read this disclaimer carefully.
Information on this Internet site should not be regarded as a substitute for professional legal, financial or real estate advice. Because every investors needs and financial situations are different, the ideas on this web site are intended as a guide only. National Investment Planning and its related entities responsible for maintaining this Internet site and its directors, officers and agents believe that all information contained within this Internet web site is correct. However, no warranty is made as to the accuracy or reliability of the information contained herein and National Investment Planning disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from the Internet site at


Without limiting the generality of the aforegoing, no person, persons or organisations should invest monies or take other action on reliance of the material contained in this material but instead should satisfy themselves independently (by seeking expert advice or otherwise) of the appropriateness of any such action. National Investment Planning are not licensed financial advisors. The general information we provide is for educational purposes only. Whenever specific financial advice or financial product advice is required National Investment Planning refer you to licensed individuals who hold the appropriate licensing required by ASIC.


© National Investment Planning.
The subject matter on and accessible from the web site is copyright. Apart from fair dealing permitted by the Copyright Act 1968, National Investment Planning grant visitors to the site permission to download and display its copyright material only for private purposes. For reproduction or use of copyright material beyond such uses, permission must be sought directly from National Investment Planning. If given, permission will be subject to the requirement that the copyright owner's name and interest in the material be acknowledged when the material is reproduced or quoted, in whole or in part.


Website links
This site may contain links to other websites operated by entities which do not belong to the National Investment Planning. These links have been provided solely for you to obtain further information about other relevant products and entities in the market. National Investment Planning has no control over the information on these sites or the products or services on them, and therefore makes no representations regarding the accuracy or suitability of the information, services, or products described on them. You are advised to make your own enquiries in relation to third parties described or linked on this site. Inclusion of a link to a third party site should not be construed as that party's endorsement of this site.

By linking to sites operated by third parties, National Investment Planning is not authorising the reproduction of any material on such sites, as such material may be the subject of intellectual property rights.