While a large number of people take advantage of negative gearing for residential investment properties in Australia, the majority of the benefits are more narrowly focused. A previous paper by the Australia Institute looked at how the benefit of negative gearing was distributed by income and aged groups. It also looked at how negative gearing and the capital gains tax discount was distorting the property market. This paper will focus on the geographic distribution of negative gearing by federal electorates.

An analysis of the data shows that taxable income and the proportion of people undertaking negative gearing are correlated. As income increases so does the number of people undertaking negative gearing. Taxable income and net rental loss are also correlated. As income rises the amount deducted because of negative gearing also rises.