The Wire

Labour’s proposal to alter the laws regarding negative gearing has caused heated debate within parliament, but many Australians are confused about what negative gearing actually is. Negative gearing refers to investing borrowed money, which actually runs at a loss for the investor. Although this may sound illogical, the money lost may be deducted from income tax, allowing investors to qualify for a lower tax bracket. Labour’s proposal is to limit the ability use negative gearing, an action which experts are claiming may benefit first time buyers as well as the vast majority of middle income earners.