Analyse an Australian investment property — rental yield, negative gearing tax benefit, net cash flow, and CGT on sale.
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Negative gearing occurs when your investment property expenses (including loan interest) exceed rental income. The net loss is deductible against your other income, reducing your tax bill. As of 2025, negative gearing remains policy in Australia.
Investment properties held for >12 months receive a 50% CGT discount. CGT is calculated on the gain (sale price − purchase price − selling costs). Depreciation claimed may be "clawed back" (capital works depreciation recapture).
A tax depreciation schedule (from a quantity surveyor) allows deduction of building costs (2.5%/year) and plant & equipment items. Can save $5,000–$15,000+ per year in tax on new properties.