What is Negative Gearing?
This is a term which many of us have come across when you were dealing with any property market or anything negative gearing is a word that we have come across but many of us still are unknown about what this is all about and what that word actually means but here the whole concept will be clear in your minds. People think that negative gearing is the loss as that name itself says that but it is not the loss on the whole. Mostly this is the term used in real estate market and places where the larger amount of money is involved. This concept can be better explained with an instance for example if you have taken some loan from the market for the property for which you have to pay the installments and also the interest. A particular interest amount you are liable to pay and when at the time of repaying the loan amount and the interest amount if the asset you have purchased is not enough to cover up the interest and the loan money then that is the situation which is called the negative gearing as you cannot take cover up the loan and interest amount also from the asset you bought. Put simply, negative gearing is a tax benefit offered to investors on their borrowing costs - be it for property, shares or bonds. If your borrowing costs exceed the revenue gained from your investment, you are entitled to claim those losses against your total income. The benefit of gearing is that it allows you to own investments that would normally be out of reach, giving you the opportunity to make a greater return on your outlay. For more information visit below link: -