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Retain negative gearing, says REIA

REIA says that negative gearing is helpful for the rental property sector.
Ahead of the May 14th Budget, The Real Estate Institute of Australia (REIA) is calling on the Australian federal government not to change the negative gearing on property investment.
It raised this plea following rumours that the government is planning to change its arrangements for negative gearing.

President of REIA, Peter Bushby, suggested that negative gearing has been helping the government to increase the stock of rental property within the country.

He said: "Negative gearing could be the difference between investing or not in rental housing in a subdued market, as is the case at present. Any tweaking to the current taxation arrangements could tip the balance against property investment."

Properties are negatively geared if they are bought using a loan and the income from rent, following other deductions, is lower than the interest on the money borrowed.

To help with this, the government currently has a tax system in place that offers property investors to claim for a deduction worth the total amount of rental expenses versus other income and rent.

Posted by Ravin Chatlani

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