Negative Gearing :
- Negative Gearing is when you put in more than the rent you are earning to cover your expenses
- These expenses then becomes a tax deduction, meaning you will pay less income tax
- But you are still putting in $xx into your Investment
Positive Gearing :
- When your rent is high enough to cover all your outgoings plus you receive on ongoing income from the difference
- Yes your tax deductions are now far less but the upside is you are not putting in any money into your investment