More than two thirds of investors recorded a net rental loss in the 2006 – 2007 financial year, contributing to a sharp increase in the number of investors negative gearing.
Australian Taxation Offices research said interest repayments and expenses outweighed rents last year by $6.4 billion.
Property Council of Australia chief executive Peter Verwer added the biggest user taking advantage of the tax perk was middle Australia “which is trying to build wealth for retirement.”
Former Reserve Bank of Australia Boss Bernie Fraser however is not so glowing, recently called for the tax to be abolished.
“Negative gearing hasn’t solved the rental accommodation shortage but that was the scream when negative gearing was taken off temporarily,” he told the AFR.
The incentive was introduced in 1985.