Borrowing to purchase an investment or asset where the interest and tax-deductible costs exceed the income generated from your investment is known as negative gearing.
Normally associated with investment properties, negative gearing is also applicable with income-producing investments such as shares and managed funds. Negative gearing indicates negative cash flow, so it will need to be funded by other means.
Rasmussen & Associates Chartered Accountants will assess your financial situation and advise whether negative gearing is a suitable decision for you. While negative gearing can be very beneficial, it is also a risky business and the decision should not be taken lightly. It is not a financial move that is suitable for all investors and can cause significant losses if not managed properly.
Negative gearing may allow you to invest in shares or properties that might have been otherwise unattainable; however a decline in the investment value can reduce your overall financial gain.
As trained accountants, we will help you to simplify the record keeping involved with investment properties and assets, as well as helping to minimise your overall taxation expenses.