Do you support negative gearing?

[Marty McDonald]

NG is not fully understood by the masses. Why should you not be able to claim expenses incurred while trying to make a profit.

However at present you can't offset business losses against personal income. Why the f not I say!

Perhaps those against ng should consider if it is fair to tax rental income at ones marginal rate and not allow expenses deductions?? WTF are they on about.

 

[agent007]

In Australia, I would think if NG was abolished, rentals will become more scarce, because some LL will need to sell.Of course this will cause a "vicious circle". Prices will need to drop, because new investors will not purchase. Most properties are bought by homeowners. Maybe this will push prices down enough to make buying a house attractive to renters? When the prices are down enough to make properties CF+, investors will start buying again.

In the long run, I think it will be better for investors interested in living off rent.

Prices may go down in the short term but, in the long run I believe they will go up. Both, rent and house prices will go up. Australia has one of the highest population growth in the OECD countries. It is approx 2.2 percent (comparable to India) so, population growth will quickly use any surplus stock. It may me think about countries like Switzerland where there is not ng and properties are very expensive. However, rents are very high too. To the point that if one is lucky enough to get a loan to purchase a property, mortgage payments would usually be lower than rents

This make you wonder if ng is the evil to crucify for the second time

According to A Einstein, the definition of insanity was to do the same thing over and over again expecting different results all the time

 

[kathryn d]

Switzerland where there is not ng and properties are very expensive. However, rents are very high too. To the point that if one is lucky enough to get a loan to purchase a property, mortgage payments would usually be lower than rents

Ours would be the same as Switzerland..except there are plenty of properties that are not expensive.

Almost most of our rentals would be cheaper for a tenant to buy, than rent.
It is the difficulty in qualifying for the mortgage that stops most.

 

[agent007]

It is the difficulty in qualifying for the mortgage that stops most.

How is it difficult?

 

[Aaron_C]

How is it difficult?

No stable job, on probation, lack of savings, bad credit history, bad servicing etc the list goes on and on.

 

[kathryn d]

No stable job, on probation, lack of savings, bad credit history, bad servicing etc the list goes on and on.

Or even no credit.
My son had the genuine savings for a house deposit. He did not have any credit, because he didn't have a credit card, even though he could prove he paid his utlility bill on time for 3 years.He work at the same job for 3+ years.He had no debt at all. Not good enough.
Son applies for a credit card.Denied.
Son applies for another credit card, where they accept lower income.Denied (other son, with same income, job stability is accepted. Only difference is, he never applied for a mortgage, or a previous credit card).First son will need a few months to apply for credit card again.He needs this to qualify for a mortgage in about 8 months.

Yes, getting approved for a mortgage can be very difficult.
It was extremely hard for us a couple of months ago even when we needed to refinance a mortgage that no longer offered mortgages in Canada (so we had no choice)...our bank finally made an exception. Not having a Payg made it very difficult.

 

[sentsie]

Yes I support NG and agree with Propertunity.

The data is from ATO :
http://www.ato.gov.au/content/downloads/cor00268761_2009CH2PER.pdf

With around $4.5B tax losses on 2.35M properties (table2.7), the expense by government to house 2.35M household (that is including repair/maintenance, etc) is less than $37pw per property.
I can not see any cheaper way to house 2.35million household.

 

[truong]

Make no mistake, NG removal is aimed at bringing property prices down, and when this happens all property owners will be impacted, not just CF- investors. The impact on the banking system and the economy will also be huge. So it’s naive to think that you can’t care less because you’re CF+ or have no IPs.

There’s a lot of property investors who are not wealthy and have only their IPs to provide for their retirement. Small as it was, their super balance was hit hard by the GFC. If investment in property is discouraged and made more costly, or if property values are destroyed then expect the government to fork out billions of $ in increased pension payment in the years to come – very bad tìming as the number of retirees sky rockets. The 4.5b that NG currently costs will look like peanuts.

There are about 1.7m investors, so 4.5b is only $2600 per person. Expect the average pension payment to increase by much more.

In general I have no confidence in economists including Saul Eslake and Treasury promising us the world. Their modelling has been proven to be deeply flawed time and time again and taxpayers/consumers like us have been made to pay for their mistakes. Examples abound.

This doesn’t mean I am for higher prices. If we had to do it again maybe NG in its current form should not be there in the first place. But now that we’ve had it for many years, it’s utterly unfair for millions of people who have invested in good faith to see their assets destroyed. The carbon tax is not a huge cost to individuals yet it generated a lot of anger. Expect the anger to be much greater if NG is badly managed, even maybe warfare between sections of our population to the detriment of the nation.

IMF is telling us that property is overvalued by 15%, so what’s the problem? Prices are already coming down and with inflation at 3% it will only take a few years for the problem to rectify by itself.

 

[Token Funder]

mate google it. The information is public. That's the main reason ng was put back in a rush

I'll take that as a no, then.