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If you can't deduct interest, what happens? Lower LVRs, less investor preference for property, lower prices, lower interest payments to the banks. Sure individuals can have higher tax rates, but they may have lower than 30% too. Negative gearing allows property (or any asset class) investors to...

The revenue authorities do not lose out from negative gearing on investment properties for the following reasons: 1. The interest on the loan is assessable in the hands of the lender. Any lost revenue to the authorities through negative gearing (resulting from high LVRs, high interest rates...