"Hawkers, how much tax benefit do you get back from tax office if you don't negative geared? 0%.
I do negative gearing and am in the 40% bracket, i atleast get back 40 cents in a dollar, but for you get 0 cents in a dollar."
40 cents? You mean 37 cents or 45 cents?
You do realise that unless capital gains are of sufficient magnitude you are still loosing money? Peoples grasp of tax and negative gearing appears to be quite poor. Lets run a scenario.
Lets say you earn $150k per year. You are taxed $43k. Lets also assume you are negatively tuned to the tune of $20k per annum.
Thus your taxable income is reduced to $130k, reducing your tax by $7,400.
So you have spent $20k to only get $7,400 back!! Now as Ive already said- you are depending on cap gains to make up the shortfall of $12,600 you are loosing every year.
If you were in Melbourne you would be $38k behind over the last 3 years!! You have LOST $38K!! Irrespective of negative gearing!
On the other hand-had you put that $20k per annum into the bank you would have around $65k....
$38k loss versus $65k...now explain to me this wonderful negative gearing thing again??
