I'm not personally involved in the property market as a business. But it always puzzles me why this topic keeps raising its head. And also, why the phrase "negative gearing" is used - most often pejoratively - in lieu of "business expenses".

If I run a business in which I invest in an asset, I am allowed to do two things: I am permitted to depreciate or amortise; and I am allowed to record in the business' P&L the legitimate expenses incurred in the maintenance of that asset.

Why is it considered differently, if my business is property?

Seriously. Why?

But a bigger 'why' is why should any business expense be a legal tax rort when the cost of being an employee is not?

TBC, I'm not so sure that rents will fumble as you say.

Hoses back around 2000 were very affordable and, that was when the grant came out,yet many still did not enter the market.

What makes you so sure they will if prices fall and, they can't really tumble as you say, otherwise there would be a complete financial meltdown.

OUG, you buy a car or a computer and use it for business you get the same tax breaks, they are just under a different banner.

Pepper,as a normal procedure when borrowing fo another house, the financier insists on a personal guarantee, therefore, your assetts are at risk no matter who lends you th money, unless you have the correct structure in place and they cost a small; fortune.

579, investors often buy new just for the depreciation benefits.

If people can't buy a house with $21K thrown in TAX FREE, they most likely never will.

Pericles, I think the term negative gearing is used because it describes the negative amount needed to supplement the holding costs of the property.

TBC, to answer your question about business expenses, can you really imagine anyone becoming an employer if they have to not only take the risks, but also have no tax breaks for doin so.

Does the term, sitting on your hands, come to mind.

I can assure you all that I, as an investor would not acquire any more investment properties if not for NG, and I think I speak for the vast majority of investors here.

Having said that, I do not have negatively geared properties, but I did some years ago.

Some of you suggest that NG doesn't apply to new properties in the main, however, what do you think the sellers of these older properties buy when they re enter the market, as most do.

If we remove NG the building industry would have a major set back, if not a collapse and the lenders would tighten up thier lending, then what!

Yes, well that all goes to show what a total scam 'investing' really is, paid for by others, the old style privatising the profits and socialising the losses and risks.

Really, if you want to be a capitalist, stand on your own feet and stop hiding behind subsidies.

Not a house owner Blue? For many of us older folk, the home is our superannuation policy, there wasn't much going a while back.

It would be quite disastrous for many if housing prices were to fall much, so many are all ready teetering on zero or negative equity, they won't have to fall too much to generate a complete break down of the financial system.

The whole thing would work so much better if we could stop state governments profiteering in the release & sale of new land, & ridiculous stamp duties on everything to do with housing.

Careful has been, you may hit a nerve as it sure is easy to spot the under achiever on this site. They hate anyone who dares to take risks.

As for stamp duty, I heard just the other day that the QLD gov is abolishing SD on investment properties and increasing the tax on home owner purchases, as a trade off for the very unfair ambulance levy.

As if potential owners are not struggling enough, they go and slap another 16 grand on the $400K home.

Economic vandals these labor governments!