Negative gearing of a Queensland investment property means that:
Correct Answer
D) Deductible expenses exceed the rent, and the loss offsets the investor's other income
Negative gearing occurs when the deductible costs of owning an investment property (mortgage interest, maintenance, depreciation, etc.) exceed the rental income. The resulting loss can be offset against the investor's other taxable income under current Australian tax law.
Why This Is the Correct Answer
A property is negatively geared when its deductible costs, such as interest, rates, repairs and depreciation, exceed the rent it earns. Under current federal tax law the net rental loss can be deducted against the investor's other income, such as salary.
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