What’s The Tax Benefit Of A Negatively Geared Property?

What’s The Tax Benefit Of A Negatively Geared Property?

When we’re talking about investing in property, there are two ways the property can be structured.

It can be either:

  • positively geared, meaning that the income being generated is higher than the expenses for the property; or
  • negatively geared, meaning that the expenses for the property are greater than the income being received.

With negatively geared properties, the loss that is generated from the property can be used to reduce your taxable income, resulting in a lower tax amount at the end of the year.

Another advantage with properties is the use of depreciation.  Depreciation is the write-off of the cost of the assets and also the building itself.  The cost of these assets is written off over time with the write off amount being considered an expense to offset the rental income made by the property.

The laws around depreciation did change recently, so it’s important that you get the right advice.

It’s a good idea to come in and have a chat to myself or one of the other property specialists here at MBA Business Solutions, and we’ll be able to make sure that you’re structured correctly to get the most out of your properties moving forward.

Amy Bignell, Senior Accountant