What if negative gearing is abolished?

The Hawke Government in the mid 1980s abolished the right to claim losses from rental property against other income, but they didn’t abolish the right to negative gear. However, this undesirable situation meant that investors left the market in droves and placed the burden of housing the rental population to the government – and they simply can’t provide for everyone.Given the extreme shortage of rental accommodation that resulted, the government was forced to repeal the legislation in 1987.

It is considered unlikely that the government will make the same mistake twice.But should it happen it is doubtful that the change would be retrospective and negative gearing would still be possible by matching your rent to your outgoings.