Negative gearing is when the house is run at a loss and the loss taken against regular employment income. That would be when the rent doesn't cover the mortgag

Negative gearing is when the house is run at a loss and the loss taken against regular employment income. That would be when the rent doesn't cover the mortgage interest + maintenance costs. The benefit is that the dominant form of income in the investment is the capital gains, which is under your control to take at a later date when you'll pay a lower tax rate. https://en.wikipedia.org/wiki/Negative_gearing https://en.wikipedia.org/wiki/Negative_gearing