Negative Gearing ….. How long will this baby last!

Howdy All,

The Australian Taxation Office (ATO) has just released its 2011-12 Taxation Statistics, which once again revealed Australia is a nation of loss-making landlords, with 15% of taxpayers owning rental properties declaring a combined $7.86 billion of losses.

According to the ATO, there were 1,895,775 property investors in Australia in 2011-12, up from 1,811,175 in 2010-11 (see next chart).

ScreenHunter_2224 May. 01 07.28

Some more interesting (worrying?) facts that can be deduced from the ATO data includes:

  • Just over 1 in 7 (1,895,775) Australian taxpayers are a property investor (either negatively geared or positively geared), claiming a total of $7.859 billion in rental losses;
  • 1 in 10 Australian taxpayers (1,266,540) are a negatively geared property investor claiming a total of $13.799 billion in rental losses;
  • The average income loss for all property investors in 2011-12 was $4,146; and
  • The average income loss for all negatively geared property investors in 2011-12 was $10,895.

At the risk of sounding over dramatic, one can’t help but feel that this initiative will be subject to change. While we believe that the Government won’t be brave enough to do this in the coming budget, it will form part of overall tax reform in the coming period.

With thanks

Innate Wealth