Could anyone confirm this please as I still don't understand.
My brother is about to settle on his 1st IP. He currently rents and is happy doing this. He earns $100,000. Property is worth $600,000. His accountant told him yesterday that he is best off Negative gearing as much as possible (ie. Having an offset account which has no money in and then having a savings account where he puts rent etc). Then come tax time he will be able to claim a bigger amount.
The way I see it is Negative gearing is give a dollar get 30 cents back... Where as positive gearing is gain a dollar and lose 30cents ish....
So I would be tempt d to place all his money in the offset account and try to make money.?!
He is telling me I have got it all wrong as his accountant has told him it's complicated to explain but to trust her...
Can anyone help explain?
Cheers
My brother is about to settle on his 1st IP. He currently rents and is happy doing this. He earns $100,000. Property is worth $600,000. His accountant told him yesterday that he is best off Negative gearing as much as possible (ie. Having an offset account which has no money in and then having a savings account where he puts rent etc). Then come tax time he will be able to claim a bigger amount.
The way I see it is Negative gearing is give a dollar get 30 cents back... Where as positive gearing is gain a dollar and lose 30cents ish....
So I would be tempt d to place all his money in the offset account and try to make money.?!
He is telling me I have got it all wrong as his accountant has told him it's complicated to explain but to trust her...
Can anyone help explain?
Cheers