According to the ATO, of the 2,156,319 Australians that owned investment property in 2017, just over 1.3 million had a negatively geared portfolio.
And one of the main reasons why it’s so popular is because it comes with a generous tax break attached. The Australian government lets you offset your real estate expenses against your income reducing the amount of tax you have to pay if you run at a loss.
As an example, imagine you had an investment property that costs you $10,000 per year. At the same time, you earn a $100,000 salary in your day job. As a direct result of the tax concession, you’ll get assessed on an income of $90,000, not $100,000. (Please consult an accountant for expert financial advice.)