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CFL Financial location Level 9, 360 Queen Street Brisbane, QLD 4000
fax CFL Financial 07 3328 8999
phone CFL Financial 07 3328 8988
Email CFL Financial mail@cflfinancial.com.au

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If you’re a successful and Motivated business owner, and want to set yourself up for retirement, this guide would be perfect for you. My clients who follow these 3 simple steps live with comfort, security and the peace of mind that financial success brings.

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If you’re a busy Professional and you feel like you’re not building your wealth fast enough and you want smarter ways to utilise your cash flow, this guide is perfect for you. Clients who have used our strategies have the peace-of-mind knowing they have a ‘game plan’ for financial abundance.

Negative gearing for property investors

Posted on Sep 8, 2015 by CFL Financial

Whether you’re an established property investor or contemplating purchasing your first investment property, you may care to familiarise yourself with the way that negative gearing works.

A property is considered to be negatively geared if the owner has taken on debt in order to acquire it and the net rental income is less than the costs of maintaining the property (including the interest paid on the loan). Investors with negatively geared properties are able to claim the shortfall between their associated costs and rental income as a deduction against their total taxable income. In the event that your taxable income is insufficient to absorb the difference, then the remaining deduction can be carried forward to the next financial year.

Many Australians would not be able to enter the real estate market without taking on some form of debt. While taking on debt allows you to make investments that would otherwise have been beyond your reach, it also ramps up your risk profile because you will have a greater amount invested. Furthermore, if your investment property is underperforming, you remain responsible for making loan repayments.

Obviously, it is preferable to have an investment property that is positively geared, meaning that rental income covers loan repayments, interest and routine maintenance. Paying tax on a profit is typically considered to be a better option than minimising your tax liability while making a loss.

Even if you think that your investment property will be positively geared, understanding the benefits of negative gearing can give you a little peace of mind. You know that if the property does lose money, you will be able to offset the loss against your taxable income. When a property is positively geared, the income earned is added to your total taxable income. As such, it is taxed at your marginal tax rate. The same applies to any capital gain that you make from selling a property.

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Retirement-in style

Retire in style checklist™

There are a few reasons why Business Owners need a Retire In Style Checklist

If you’re a successful and Motivated business owner, and want to set yourself up for retirement, this guide would be perfect for you. My clients who follow these 3 simple steps live with comfort, security and the peace of mind that financial success brings.

Retirement-prosperity-thumbnail

The Retirement Prosperity Guide™

Make sure you don’t miss out on the Retirement Prosperity Guide

If you’re a busy Professional and you feel like you’re not building your wealth fast enough and you want smarter ways to utilise your cash flow, this guide is perfect for you. Clients who have used our strategies have the peace-of-mind knowing they have a ‘game plan’ for financial abundance.

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Email:
Phone: 07 3328 8988
Fax: 07 3328 8999

Office Location:
Level 9, 360 Queen Street
Brisbane
QLD 4000

Postal Address:
GPO Box 2468,
Brisbane,
QLD, 4001

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