A bit like refund of excess franking credits, negative gearing isn’t a bad idea, but it needs some limits.
Too many investors use negative gearing to build a property empire. As one property transitions to being positively geared, they borrow again for another property so end up with losses still. Rinse and repeat. The really keen ones use interest only loans to speed up the accumulation process. If you want to become a property mogul, fine, but not be subsidised by the taxpayers to get there.
My thoughts...Just like refund of excess imputation credits should be capped, negative gearing should be capped either by a dollar amount, or number of properties / units that can be subject to negative gearing (say, 2, maybe 3 properties...enough to generate a reasonable retirement income, should direct property be your preferred retirement strategy).
