Negative Gearing or Negative Politicians?
September 4, 2019
There has been a lot of noise in the media these past few weeks about ‘reforming’ the Tax system. Politicians of both major parties are making noises about changing the rule for negative gearing on investment properties.

The last time they had a go at this was back in the mid-eighties and it turned out to be a miserable failure. Why would we think it would be any different this time around?

Even the term ‘Negative Gearing’ is a jargon word that simply describes the situation that arises when the expenses of running an investment property are higher than the income received.

It has long been a principle in tax law that all expenses incurred in running a business are tax-deductible against income received. Property investment is no different to any other small business. In fact, as I’ve often said, if you own a rental property you are in the business of providing accommodation. All costs associated with that business including interest on borrowings should be deductible.

Governments cannot meet the need for rental accommodation in Australia. Indeed, most State Governments have sold off huge numbers of their Government owned rental properties. The private sector does it much more cost effectively and efficiently.

I won’t be voting for any candidate or party that wants to change the rules to the detriment of property investors!