HOW DOES NEGATIVE GEARING WORK

Rarely a day goes by without an investor or member of the media mentioning negative gearing. But what does it mean exactly?

Gearing simply means borrowing money to buy an asset. And the reason you hear so much about it is because the government’s gearing policies have a big impact on how attractive the property market looks to investors, which, in turn, has a big impact on everything from the amount of housing available to the average weekly rent. 

Here’s what you need to know about the three types of gearing: negative, neutral and positive.

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