negative gearing

Negative gearing tips for Australian expats

The Australian Government strongly welcomes overseas investors in the property market. The term ‘negative gearing’ constantly gets thrown into political discussions by both Liberal and National parties who support negative gearing options.

So, what is negative gearing?

Negative gearing is an established practice where an investor takes out a financial loan to purchase property when the cost of owning the property outweighs the expected income from the property. Negative gearing is considered a form of financial leverage where the investor expects a surge in property value over time which eventually exceeds the cost of holding the property.

An investment property is considered to be negatively geared when the investors’ rental income is less than the total costs of being able to hold the property.

When you are living as an Australian expat, and choose to be a non-resident for tax purposes, Australian expats are able to negatively gear properties. Expats can use any losses from negatively geared properties to offset and reduce any taxable income from Australian earnings.

Tax losses from negative gearing can be carried forward for future tax returns. To get the most from your tax reduction, it’s advisable to maximise any depreciation deductions if applicable.

How can Australian expats benefit from negative gearing? Take a look at the top five benefits of negative gearing:

1. A stable investment that gives the opportunity for expats to use as security to easily obtain low-interest loans.

2. Strategically placed property can result in long-term stable profitable income.

3. Various tax advantages and offsets for Australian expats who choose to negatively gear.

4. Increases the number of tax deductions you’re able to claim – from water rates to maintenance cost to property management costs, expats can take advantage of many tax offsets to reduce their taxable income and gain the most out of their tax returns.

5. Investing in the Australian property gives you a foothold in Australia’s property market (in preparation for your ultimate return).

Negative gearing holds a lot of advantages for the Australian expat looking to profit from multiple income streams and increase their wealth, making it a very attractive option for securing finance and wealth growth for all expats overseas.

Book an appointment with Expat Tax today to discuss expat advice and your negative gearing needs.

Shane Macfarlane CA
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Comments 2

  1. Hi,
    My wife and I are expats living in Europe and we own a property in Queensland. I attempted to complete an Etax return myself this last financial year and was totally unable to work out how to claim my property expenses and have therefore not actually submitted a return for 17-18. Are you able to help us out with some advice and an eventual tax return? How do we go about submitting our returns for next year?



    1. Post

      Hi Grant,

      Thanks for your message. Sorry to hear that you’re having difficulties in completing your e-Tax return for last year (2018).

      We’d be more than happy to prepare and lodge your tax returns for you and to assist you with some advice that you require.

      If you’re interested in learning more about how we can help, please feel free to contact us.

      Thanks again for your message.



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