The Hawke Government in the mid 1980′s abolished the right to claim losses from rental property against other income, but they didn’t abolish the right to negative gear. However, this undesirable situation meant that investors left the market in droves and placed the burden of housing the rental population to the government – and they simply can’t provide for everyone. Given the extreme shortage of rental accommodation that resulted, the government was forced to repeal the legislation in 1987. It is considered unlikely that the government will make the same mistake twice. But should it happen it is doubtful that the change would be retrospective and negative gearing would still be possible by matching your rent to your outgoings.
Reader Comments
I noticed that the average yield with your properties are around 5%. I dont understand how to make money off that when tax is done once per year and you still have mortgage payments, insurance etc to pay? i also understand that positive gearing is a good cash flow but you would need to yield around 11-12% Are you able to answer this as I would love to get into investing but am put off by the figures, and I guess without the right knowledge its hard to understand how it all works, how money is made unless its by the capital when you sell. I also was told you can buy property without using your own money? And I know that there are people who are very successful buying investment properties how would I go about starting out?