This podcast defines and explains the mechanism of negative gearing, an investment strategy where the expenses of owning a rental property, primarily loan interest, exceed the income it generates. This operational deficit results in a net rental loss, which the investor can claim as a deduction against their overall taxable income, such as salary or business earnings, thereby reducing their immediate tax liability. The podcast emphasises that this technique is most beneficial to higher-income earners who are willing to cover short-term cash flow gaps in anticipation of substantial future appreciation, known as capital gains. Finally, the podcast covers the additional complexities involved, including deductions for depreciation and the specific tax rules applied when the property is eventually sold. You can contact us via our web page - here.You can find out more at https://www.mortgagechoice.com.au/richard.ferguson/

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