A national land tax is comming!

http://www.dailytelegraph.com.au/ne...place-stamp-duty/story-e6frewt0-1225812051057

I once posted if it was wise if I should be concerned over the Henry report. Many of the posters on this board scolded me, saying that I should not be a property investor if I was concerned with such "trivial" things. "It's all part of the business" I was rebutted with though I made a point that government can wipe out wealth with the stroke of a pen...so here it is, a national land tax, paid EVERY YEAR, whether investment or place of residence. Although we don't have the details yet, the one thing I can guarantee is that property investors will be paying a lot more than before. This is the same tax as in America which makes real estate investing over there too expensive. If one knows how their tax system is over there, residents pay a "national" land tax, and then a "state" land tax, yes people, a double whammy.

So now, who here is still going to tell me that its all "part of doing business"?. I have called these taxes a fraud and a scam consistently, and it is these kind of mob-like ciphering wealth off people is truly an enterprise more akin to criminals then lawful governance.

Luckily I held off purchasing my 3rd and 4th IP for fear of something like this, I am so glad I did, this thing could make property investment highly unappealing.

If PI becomes unappealing then less investors will buy the property which in turn will push up the rents.

This favors people like me who are aiming to live off rents rather than equity.

I love people like Daniel who are so easily scared. More renters means higher rents for me. While you were dithering over stuff that MIGHT happen, Daniel, some of us bought, the price has gone up and now we have plenty of buffer to pay a national land tax. IF it appears.

Just because the Henry report recommends something doesn't mean the govt will do it. Government wants to stay in power, and putting direct new taxes on voters is political suicide.

Keep fearing.

DanielG said:

I have called these taxes a fraud and a scam consistently, and it is these kind of mob-like ciphering wealth off people is truly an enterprise more akin to criminals then lawful governance.

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So taxes are the devil's spawn. So what? It's legal. You don't like it, don't buy property. Don't like the government? Move. The rest of us figure it into the costs and get rich within the rules.

Are you unhappy just because you're not getting rich? Some of us are doing rather well within the rules.

Hooray said:

I love people like Daniel who are so easily scared. More renters means higher rents for me. While you were dithering over stuff that MIGHT happen, Daniel, some of us bought, the price has gone up and now we have plenty of buffer to pay a national land tax. IF it appears.

Just because the Henry report recommends something doesn't mean the govt will do it. Government wants to stay in power, and putting direct new taxes on voters is political suicide.

Keep fearing.

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Well I am going to wait for the details...if it's not much to be concerned about or doesn't get implemented, well I have a large reserve of cash ready to buy, if its a law that makes it too expensive to own property (and good luck jacking up rents to cover the new taxes) then I can look at other vehicles...you call that fear, I call it "strategy".

Hooray said:

So taxes are the devil's spawn. So what? It's legal. You don't like it, don't buy property. Don't like the government? Move. The rest of us figure it into the costs and get rich within the rules.

Are you unhappy just because you're not getting rich? Some of us are doing rather well within the rules.

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Hey Hooray, I dont know your circumstances...perhaps your much older than me have had the great luxury of investing for many years so you have built enough of a portfolio to buffer yourself from such taxes, I am fairly young and am only starting out, so its harder for me to start up with such impositions. You may already be rich, in which case I am happy for you, people who are trying to "become" rich are prevented from doing so because taxes like these destroys the ability for someone to get there.

So you warned us, we gave our replies before.

What makes you think any of these opinions have changed, i think we all agree we don't want another tax wacked on us, but look on the brightside. More tenants, higher rents= MORE MONEY!

Now what's so bad about that? If you're scared sell you IPs and give them to me and run for the hills, i'll gladly fork the money out for the extra tax, because in the end it'll earn me more.

Daniel, you would be better served to deal with reality mate. If it replaces SD so be it - I will deal with it by changing strategy if needs be. Stay cool and level headed or stay away from this type of investing. This is just media noise at present

Daniel I can see where your coming from and even though land tax is a
deduction for me I still hate paying it and always object to my land valuations
this will horrify most members here, but that's just me I don't need high
valuations to increase my ability to borrow, Im comfortable with owning outright.

I think you are missing out of wealth building if you are concerned about what
might happen in the future.

You should be getting in now and if in the future a National land tax occurs
and your ability to pay is of a concern you can always sell your properties.

DanielG said:

[
Luckily I held off purchasing my 3rd and 4th IP for fear of something like this, I am so glad I did, this thing could make property investment highly unappealing.

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Daniel

If we take seriously what we read in the news we'll never do any investing
and we'll end up like Steve Keen, all talk and no assets.

If the government decides to do a reform and it manages to pass the changes through then investment in housing will be reduced, rents will go through the roof and they'll have to start spending their own money and provide public housing.

Like they say there is no free lunch....
At the moment we have a system which works so why fiddle with it?

BV said:

Daniel

If we take seriously what we read in the news we'll never do any investing
and we'll end up like Steve Keen, all talk and no assets.

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Shouldn't that be all WALK and no assets.

Daniel, no-one likes taxes. I hate them! But I would be a fool to stop purchasing because they might impose another tax. If they do, I'll deal with it. If it scares investors off, then rents go up. It's all good.

The government has already voted to ignore several of the likely recommendations by the Henry review, before they've even been tabled. So, I am not too worried at this point.

Knowing that there is an election next year and Abbott is making a little ground already, they would need to phrase this very carefully to avoid a negative reaction amongst voters. Homeowners don't pay land tax at the moment, only investors; imposing this upon them would not be a simple PR task, certainly.

It is possible, but I'm not betting on it just yet.

Bye the way, the review is not just about creating new streams of revenue. Half the idea is to (supposedly) simplify the tax system, so I would also expect to see some current taxes reduced or waived, as well.

Time will tell. The review hasn't been released yet and even then, the government will take its time in issuing a response, let alone take any action.

JamesGG said:

Time will tell. The review hasn't been released yet and even then, the government will take its time in issuing a response, let alone take any action.

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Yes agree 100%.

At least DanielG held off on IP #3&4 and only cost himself 10% CG this year alone for fear of a tax not tabled, not read or considered by government and not enacted into law.

I hope you are doing something worthwhile with that stash of cash Dan

JamesGG said:

Homeowners don't pay land tax at the moment, only investors; imposing this upon them would not be a simple PR task, certainly.

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Exactly, but governments are silly enough to impose taxes on all home owners i swear politicians get great joy out of being unpopular..!

So even though it's less likely to be brought in still very possible, but in my opinion shouldn't it make you more inclined to buy now..? Before the tax is introduced, grow your portfolio that way you are protected by rents etc, when and if it is put in place..?

Lil Skater said:

So even though it's less likely to be brought in still very possible, but in my opinion shouldn't it make you more inclined to buy now..? Before the tax is introduced, grow your portfolio that way you are protected by rents etc, when and if it is put in place..?

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I dont understand your statement Lil Skater...if I buy right now, and this law is introduced next year or the following...then Im caught out. Two years is no where near enough time to build up enough of an equity and cash flow buffer to circumvent such an imposition.

DanielG said:

Two years is no where near enough time to build up enough of an equity and cash flow buffer to circumvent such an imposition.

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No, I think that she made a valid point. I suppose that it depends on your investment strategy, though.

DanielG said:

I dont understand your statement Lil Skater...if I buy right now, and this law is introduced next year or the following...then Im caught out. Two years is no where near enough time to build up enough of an equity and cash flow buffer to circumvent such an imposition.

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Two years is plenty, as James said it depends on your strategy.

If you go about it in the right way, you're not caught out, you're better off.

Lil Skater said:

Two years is plenty, as James said it depends on your strategy.

If you go about it in the right way, you're not caught out, you're better off.

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DO you mind providing an example?

DanielG said:

Two years is no where near enough time to build up enough of an equity and cash flow buffer to circumvent such an imposition.

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Uh, how do you know how much this national land tax, IF it comes in, is going to be? If you don't know how much it's going to be, how do you know how much buffer you'll need?