Negative gearing and the taxation of capital gains in Australia

George Fane*, Martin Richardson

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

10 Citations (Scopus)


This paper studies the interaction between negative gearing and three capital gains tax regimes - the current Australian system, the one that prevailed between 1985 and 1999 and a realisation tax that mimics an accruals tax. We report estimates of the effective rates of income tax for each regime in two scenarios - slow anticipated real capital gains and very rapid unanticipated real capital gains. We conclude that negative gearing should be retained and capital gains taxation reformed to approximate an accruals tax. This desirable package would be no harder to administer than the current regime.

Original languageEnglish
Pages (from-to)249-261
Number of pages13
JournalEconomic Record
Issue number254
Publication statusPublished - Sept 2005


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