Negative Gearing Calculator: An Overview

Ben Machin • January 17, 2023

Negative gearing is a popular investment strategy used by many Australians to reduce their tax burden and increase their wealth. It involves borrowing money to purchase an investment property and then claiming the interest payments on the loan as a tax deduction. While this strategy can be beneficial, it is important to understand the potential risks and rewards associated with it. This is where a negative gearing calculator can be a useful tool.

A negative gearing calculator is a tool that can help investors calculate the potential tax savings and other benefits associated with negative gearing. It can also help investors determine the amount of money they need to borrow to purchase an investment property and the amount of interest they will need to pay on the loan.

The calculator works by taking into account a number of factors, including the investor’s income, the cost of the property, the amount of the loan, the interest rate, and the amount of time the loan will be held. It then calculates the potential tax savings and other benefits associated with negative gearing.

A bills of currences in negative gearing calculator

For example, if an investor has an income of $50,000 per year and they purchase an investment property for $400,000 with a loan of $300,000 at an interest rate of 5%, the calculator will calculate the potential tax savings and other benefits associated with negative gearing. It will also calculate the amount of money the investor will need to borrow to purchase the property and the amount of interest they will need to pay on the loan.

The calculator can also be used to compare different investment strategies. For example, an investor can compare the potential tax savings and other benefits associated with negative gearing to those associated with investing in shares or other assets. This can help investors make an informed decision about which investment strategy is best for them.

Negative gearing calculators are available online and can be used for free. They are easy to use and can provide investors with valuable information about the potential tax savings and other benefits associated with negative gearing.

Negative gearing can be a great way to reduce your tax burden and increase your wealth, but it is important to understand the potential risks and rewards associated with it. A negative gearing calculator can be a useful tool to help investors make an informed decision about whether or not this investment strategy is right for them.

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