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Negative Gearing / Super Gearing planning

Negative Gearing is about claiming your out of pocket investment holding costs in tax. If you spend $1 on your investment, be it for mortgage interest, rates, depreciation, maintenance etc., you can expect to get 20c to 40c back in tax. It is important to understand that even after a tax refund, you are generally out of pocket. Thus unless your investment grows in value at a rate higher than what you are losing each year, you could end up on the losing side. Not all negative gearing products are therefore good for you. It is a matter of picking up something which generates wealth for you in the long run.

Super Gearing is an extension of the above concept with an advantage of moving your negatively geared investment into your self managed superfund. This gives you additional advantages like lower capital gains tax.

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