Example: If you had an income of say $80,000 you would be paying approx $26,000 in tax. If you purchased a new investment property for approx $350,000 you would be able to reduce your tax by approx $8,000 ie to $18,000. You can now utilise this money to help pay for the property.

This of course depends on how you structure your purchase and the selection of property.

Gearing means borrowing money to invest.

Negative gearing means your borrowing (interest and expenses) exceed the income you receive on your investment.

Positive gearing means your borrowing costs (interest and expenses) are fully covered by the investment income.

InvestRite Australia can help you with your choices.