- Negative gearing is a form of financial leverage typically seen in the context of property investing.
- A negatively geared asset is one that does not produce enough income to cover its cost at the moment.
- An investor who is negative gearing expects to gain from tax benefits in the short term and to eventually sell the asset at a higher price to make up for the initial losses.
- Negative gearing only becomes a profitable venture when the property is eventually sold.
Source: investopedia.com
Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.