Negative gearing helps low income earners the most

It’s likely the negative gearing debate will rage at least until the election in July.

So here’s another way of looking at the argument…

The truth is the relative benefits of negative gearing are greatest at low income levels, Michael Potter  a research fellow in the Economics Program at the Centre for Independent Studies wrote  on the ABC.neg-gearing-hero2-Recovered

Of course that’s contrary to what most people believe.

Those against negative gearing argue we should get rid of negative gearing because it provides a greater benefit to the rich than the poor.

Yet according to analysis by the Centre for Independent Studies (CIS) the largest relative benefit of negative gearing is at low income levels rather than high income levels.

In fact, the benefit is particularly substantial at low income levels.

This is shown in the graph below:

So the relative benefits of negative gearing are greatest at low income levels; but this shouldn’t determine what is done.

Much more important is the impact on the budget, the housing market and economy more broadly.

Source:  Negative gearing helps low-income people most, but that’s besides the point

Also published on Medium.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

'Negative gearing helps low income earners the most' have 1 comment

  1. May 6, 2016 @ 2:15 pm Jack

    Like it or lump it there are Owners and Renters
    When negative gearing was removed some years ago there became an intense shortage of rental accommodation
    People were screaming that they could not get a house or flat to rent
    Eventually the govt of the day reinstated the negative gearing because they DIDNT WANT TO PROVIDE CHEAP PUBLIC HOUSING


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