Expect Pain on Tuesday
- Thread starter coastymike
- Start date
I assume you're referring to an increase in CG from increased demand, but in that scenario with increased rental supply, rents may fall significantly, hurting your yield.
GP
Change is always good news for accountants.okay - i'll be queuing up for advice on wednesday ...
GP
Yields have been falling for the last couple of years. I'm not complaining, because prices have been going up. If prices go up but yields go down, is that such a bad thing? Given that I can then refinance and buy something else? Yields have been coming down since the start of the last boom.
Alex
okay - i'll be queuing up for advice on wednesday ...
Change is always good news for accountants.
GP
I don't practise as an accountant in the traditional sense, so it's not like I get to charge more if tax rules change. My employer isn't going to pay me more if the rules change.
Alex
Regarding private health, I see in today's paper that Swan has already stated that the Medicare levy surcharge threshold will double from $50K to $100K. Presumably that's for singles, but it doesn't say anything about the $100K threshold for couples. Good news if you're not interested in private health cover and earn between $50K and $100K.
And Rudd supposedly informed the private health industry that the 30% general rebate would remain, although he also apparently told them that the Medicare levy surcharge threshold wouldn't change either.
The paper also states there's a confirmed increase in luxury car tax for vehicles over $57K from 25% to 33%, and that another thing Swan has mentioned is means testing for certain benefits that the wealthy can currently claim, like the baby bonus.
GP
And Rudd supposedly informed the private health industry that the 30% general rebate would remain, although he also apparently told them that the Medicare levy surcharge threshold wouldn't change either.
The paper also states there's a confirmed increase in luxury car tax for vehicles over $57K from 25% to 33%, and that another thing Swan has mentioned is means testing for certain benefits that the wealthy can currently claim, like the baby bonus.
GP
CGT Discount removal
If the CGT discount is removed is there anything wrong with either of these strategies.
1. Move property into a SMSF therefore avoiding CGT (i think) if your strategy is for retirement income
or
2. Live of equity for a year and therefore have no income and as CGT is charged at your highest tax rate, if you are not paying tax you wouldnt pay CGT.
These solutions are probably way too simple and th e ATO would have thought of them but I am interested if you could do these.
If the CGT discount is removed is there anything wrong with either of these strategies.
1. Move property into a SMSF therefore avoiding CGT (i think) if your strategy is for retirement income
or
2. Live of equity for a year and therefore have no income and as CGT is charged at your highest tax rate, if you are not paying tax you wouldnt pay CGT.
These solutions are probably way too simple and th e ATO would have thought of them but I am interested if you could do these.
that alone will piss me off the most..
we in aus pay the most in the developed world for luxury cars.. and they will jack up the lct again !
definitely seems like a robinhood budget.
Harris
Which are the rust belt states?
Gearing products for SMSFs aren't really fully developed yet. Also, depending your age it might not make sense, since you can't access SMSF assets and income tax free until at least your 50s. Also, selling a property to your super fund means you have to pay CGT.
True, but you'd have to live off equity for a year, and not get any employment income. For the average working person, that's not practical even if you have enough equity to LOE. If you're already in a position to LOE AND you don't work, the budget isn't aimed at you anyway because you're in a small minority. Though realistically, if you've owned a property for a while, your CG would likely to be in the 6 figures. That means you're going to have to pay a part of that in CGT anyway.
Not really. It's just relatively rare so that the govt won't be targetting it directly. Do you really see the govt specifically aiming at 'older people who can afford to not work and LOE for a year to minimise CG'?
More importantly, CGT is only ever payable when you sell. For those still building their portfolios, they won't be selling anyway. I'm certainly not going to sell just to 'crystalise' my gains at the 50% discount. When (or IF) I sell in 20 years or whatever, even if I have to pay the full CGT, it's better than selling now because the tax I would have paid has been appreciating tax free for 20 years. In any case, right now I'm still working and I can't just stop for a year: when I sell it'll be likely that I won't be working.
But remembering that most 'investors' have this idea that they need to sell to realise money, even if it's 20 years down the track, they'll think 'hey, CG on property isn't as good as it used to be so maybe I should sell and put more money into super instead'. That's irrational, since you're trying to avoid an expense that may not eventuate for 20 years (and who knows what tax laws will look like by then). When people act irrationally, there's opportunity.
Alex
that alone will piss me off the most..
we in aus pay the most in the developed world for luxury cars.. and they will jack up the lct again !
definitely seems like a robinhood budget.
That'll teach YOU to be in the minority group of rich people who drive fancy cars, Harris.
Alex
Thanks Alex
I am way away from this position, however I was just thinking through the implications. I am sure as you said the tax landscape will be very different if and when I want to sell.
I am way away from this position, however I was just thinking through the implications. I am sure as you said the tax landscape will be very different if and when I want to sell.
hi all
interesting that this post is put up by coastymike.
a I agree with alex that you play within the rules and on wendsday the people like coasty should be one of the busiest people
as structure have to be adjusted this is not a bad thing but it is a very good example of why you need a structure that can adjust.
I hope mine can.
budgets come and they go.
but in reality will any of these so called changes really change anything to increase supply.
for me no
this is tinker, tinker and playing the fiddle.
wasn't it nero played while rome burned.
mr rudd tinkers while the resi market burns.
difference is that nero could see the flames.
I think mr rudd has his eyes closed.
cutting cgt
increasing flash cars rates,
desalination units,
talking mandarin,
helping mothers to stay at home
for me is tinker tinker.
the problem is to hard so lets find if there is a way of getting people eyes off the problems.
so lets tinker tinker and maybe no one will notice.
well sorry they will
can anyone tell me on wendsday how anything in the budget will
drop petrol prices
drop rents
increase the number of cranes on the horizen
drop real interest rates on comm and resi.
drop milk and food prices
cut the dual monoploy of coles and woolworths.
and stop banks hiring stupid investment managers that can't understand that you can't lend $1.00 to one person to drive a share up and lend $1.00 to another person to drive the same share down and lose both $2.00 and they are investing in day trading 2 cent shares.
and then say its all the fault of a credit squeeze ( no it not its a case of you are just stupid)
not pointing any fingure at anyone this is a hyoper thetical example but the budget needs to aim at these things.
maybe a task force to look into banks for tax evaition.
for me if you have lost money and there is no logical reason for that loss then pay tax on your loss at the normal 33 cents in the dollar.
so your westpacs anz would be up for 330 mil each now that would change a few peoples ideas about right downs.
try a task force that anything over 5 mil in a write down has to go past the task force and if it is shown that the company has lost because of there inability via training or what ever thats fine you pay 33cents in the dollar straight tax not defered for the loss.
lets see that money come in.
interesting that this post is put up by coastymike.
a I agree with alex that you play within the rules and on wendsday the people like coasty should be one of the busiest people
as structure have to be adjusted this is not a bad thing but it is a very good example of why you need a structure that can adjust.
I hope mine can.
budgets come and they go.
but in reality will any of these so called changes really change anything to increase supply.
for me no
this is tinker, tinker and playing the fiddle.
wasn't it nero played while rome burned.
mr rudd tinkers while the resi market burns.
difference is that nero could see the flames.
I think mr rudd has his eyes closed.
cutting cgt
increasing flash cars rates,
desalination units,
talking mandarin,
helping mothers to stay at home
for me is tinker tinker.
the problem is to hard so lets find if there is a way of getting people eyes off the problems.
so lets tinker tinker and maybe no one will notice.
well sorry they will
can anyone tell me on wendsday how anything in the budget will
drop petrol prices
drop rents
increase the number of cranes on the horizen
drop real interest rates on comm and resi.
drop milk and food prices
cut the dual monoploy of coles and woolworths.
and stop banks hiring stupid investment managers that can't understand that you can't lend $1.00 to one person to drive a share up and lend $1.00 to another person to drive the same share down and lose both $2.00 and they are investing in day trading 2 cent shares.
and then say its all the fault of a credit squeeze ( no it not its a case of you are just stupid)
not pointing any fingure at anyone this is a hyoper thetical example but the budget needs to aim at these things.
maybe a task force to look into banks for tax evaition.
for me if you have lost money and there is no logical reason for that loss then pay tax on your loss at the normal 33 cents in the dollar.
so your westpacs anz would be up for 330 mil each now that would change a few peoples ideas about right downs.
try a task force that anything over 5 mil in a write down has to go past the task force and if it is shown that the company has lost because of there inability via training or what ever thats fine you pay 33cents in the dollar straight tax not defered for the loss.
lets see that money come in.
That'll teach YOU to be in the minority group of rich people who drive fancy cars, Harris.
Alex
Malcolm Turbull calls this "politics of envy" and says that it will have a universal effect on the price for all cars, not just luxury cars. Then the increased lct will attract gst ont he increased value so you get tax on tax.. on tax
http://www.theage.com.au/news/national/politics-of-envy-turnbull/2008/05/11/1210444217984.html
Harris
Its pretty wrong - I was gobsmacked by the price of cars in the UK... So cheap!
Speaking Mandarin is tinkering with the economy???
Zaoshang, wo chi zaofan le.
Oops... I think I just raised interest rates 1/2 a percent...
GP
Hi GreatPig,
I read in yesterday's Age that Medicare levy threshold for couples, will rise from $100k to $150K.
Lily
I read in yesterday's Age that Medicare levy threshold for couples, will rise from $100k to $150K.
Lily
