Two-thirds of property investments negatively geared: ATO figures

Expect a stampede of property investors storming the Treasury building in Canberra if the government ever ends negative gearing tax allowances as some in the industry have proposed.

The latest ATO figures for the 2010-11 tax year show just how reliant property investors are on being able to offset rental losses against their taxable income and reduce their tax bills.

Around two-thirds of 1,811,174 property investors - 1,213,597 taxpayers – claimed losses on their investment properties for the 2010-11 tax year up from 1,110,290 who claimed losses in the 2009-10 tax year.

Dividing the total rental income loss claimed by taxpayers by the number of taxpayers, reveals that the average loss recorded for negatively-geared property investors was $10,947 in 2010-11, up from $9,132 in 2009-10.

The figures show there was a small rise in gross rental income from $28 billion to $30.7 billion but a rise in tax deductible rental interest payments (up from $18.4 billion to $22.7 billion), capital works deductions and other allowable rental deductions.

The highest proportion of tax payers claiming rental deductions are those earning between $37,000 and $80,000 per year, making up more than a third of all negatively-geared property investors.