The investment return (rental for example) does not meet the minimum loan repayments.
The ability to claim a tax deduction for 'shortfalls' experienced when the expenses incurred in holding an investment are greater than the income earned from that investment.
A way of obtaining tax advantages through an investment where the deductible expenses (typically including interest) exceed the income derived from the investment.
Where an investment is geared (usually to 100%) to produce a tax loss. (ie: the total income from rent is less than the total outgoings - including mortgage payments, rates, insurance etc, and depreciation) This loss may be able to be deducted from other taxable income.
where the return from an investment property doesn't cover the maintenance costs and mortgage interest costs.
An investment where maintenance costs exceed the income generated by the investment.
Where your mortgage repayments exceed the income received from a rental property.
Where the return on an investment is insufficient to meet the costs of the investment, which then means a reduction in assessable taxable income
This is when the money you make on an investment property (usually through renting) is less than the cost of maintaining it.
Borrowing money to acquire assets where the interest payments exceed income from the assets, which generates a tax deduction.
Where the return on an investment is not sufficient to cover the costs on the investment such as interest on the loan and property maintenance.
Negative gearing occurs where you have borrowed money for investment purposes, and the income you earn from your investment is less than the interest you pay on your loan. An investment may also be positively geared, where your investment income is greater than your loan interest, or neutrally geared, where the two are equal. There are no glossary terms available for this letter of the alphabet.
Borrowing to an extent where the interest paid is greater than the income received (eg. dividends, franking credits, rent) from an investment.
Where the return on an investment is not sufficient to cover the costs on the investment, eg: property maintenance and interest on the loan against income from letting/leasing.
The situation when an investment such as property or shares is purchased with the assistance of borrowed funds and where the rental or dividend income is less than the interest commitment in the course of the financial year. This loss can then be offset from any gain from other sources for tax purposes.
Where the return on an investment is insufficient to meet the costs of the investment, leading to a reduction in assesable income for taxation purposes.
Negative gearing occurs when you borrow for investment purposes (i.e. to purchase an investment property), and the costs of the investment (such as interest charges) exceed the returns from the investment (i.e. rental income). The loss may then be claimed as a tax deduction, depending on the circumstances of the investment - if considering negative gearing, ensure you seek financial advice first.
When your annual property costs are greater than what you receive in rental income, you can claim the difference against other types of income such as your salary
Occurs when an investment produces less income than the interest being paid on the borrowed funds.
An investment is negatively geared when the interest on borrowed funds exceed the returns from the investment.
Where interest repayments on a loan fall short of the amount of rent collected a property is negatively geared. At present in Australia these payments can be offset against taxable income and hence is a popular way to reduce tax paid. The holder of the property hopes that the property will appreciate in value greater than deficit in cash flow.
Negative gearing on a rental property occurs when the annual interest payable on the loan used to acquire the property plus other expenses incurred in maintaining the property exceed the annual rental income that the property generates.
As already explained. If the tax deductible expenses from the property investment are greater than the rental income the excess tax deductions can be offset against income from other sources as salary or investment income.
Where the return on an investment is insufficient to meet the interest costs of the loan used to fund the investment.
Where the income earned from an investment is less than the costs associated with obtaining and maintaining the investment. The "loss" can be deducted from taxable income.
An investment strategy where related costs (eg. interest payments on funds borrowed to buy an income-producing asset) exceed the income from the asset.
Gearing your investment so that the cost to maintain it (loan repayments, council rates, maintenance etc) out weigh the income produced by the investment, leading to a reduction in taxable income.
effectively means loss through borrowing. It is an investment strategy whereby an asset is purchased and its related income and expenditures result in a net loss which deducted from your taxable income therefore reducing your tax payable.
purchasing an investment with borrowed funds where the interest on the borrowing exceed the income from the investment.
Where the income produced by an investment is not sufficient to cover the costs associated with maintaining that investment. This is the opposite of Positive Gearing. Hide Definition
When the cost of borrowed funds is not covered by the return of an investment which has been bought with those borrowed funds, and the interest paid on the borrowing is greater than the interest derived from the investment.
The purchase of an investment using borrowed funds, where the interest on the borrowing exeeds the income derived from the investment. For tax purposes, this negative net income can be offset against income gained from other sources. Negative gearing is most often associated with purchases of investment real estate, but can also apply in the case of shares or managed investments.
The purchase of an investment eg. shares, managed investment, or property, where the interest on the loan exceeds the income received from the investment. The negative net income is then offset against income received from other sources for tax purposes.
when income from an investment is less than the costs of an investment
Negative gearing is a form of financial leverage where an investor borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan. (When the income does cover the interest it is called positive gearing.)