What is negative gearing?

Negative gearing is again in the news. Labor party has announced their policy of restricting negative gearing to new buildings only after July 2017. Labor's policy aims to reduce the discount given to Capital Gain Tax also. Melbourne based tax consultant Saji John, who is the director of AAA Accounting and Financial Services, explains about these.

A sold sticker adorns a real estate sign advertising a property in Sydney on Tuesday, May 22, 2012. (AAP Image/Paul Miller) NO ARCHIVING Source: AAP