What would really happen if negative gearing was changed?
There’s been so much talk about negative gearing and whether it should stay or go, but the real question is how any change would actually happen. From what I can tell, there are three main possibilities:
- Straight-up abolition: All negative gearing benefits are cut off immediately, for both new and existing investors.
- Grandfathering: Anyone who already has a negatively geared property keeps the benefits, but new purchases don’t qualify.
- Phase-out / transition (say 3 years): Deductions still apply for a while, but are reduced year by year until they disappear.
What do you think — would a government really risk abolishing it overnight, or is it more likely they’d grandfather existing investors and go slow on new ones?
3- Phase-out / transition