Federal Budget Negative Gearing
- Thread starter ricflair
- Start date
Be interesting if they did. Given the very low levels of existing housing stock, I don't know that it would be a great time to do it. It would exacerbate an already hot rental market.
That said, it would certainly help to pay for DisabilityCare (the NDIS).... but then, so would the MRRT tax, if it had been drafted a bit better.
That said, it would certainly help to pay for DisabilityCare (the NDIS).... but then, so would the MRRT tax, if it had been drafted a bit better.
If they had, it would have already been leaked and we would have been conditioned. There is zero chance for a surprise in this space.
Both sides of politics have consistently reaffirmed the support of the status quo. Zero chance people.
Both sides of politics have consistently reaffirmed the support of the status quo. Zero chance people.
Wouldnt make much sense from a business perspective abolishing negative gearing....for every $1 they give in negative gearing deductions back to investors the govt generates another $4.50 indirectly in other taxes.
Back in the mid 80's Keating abolished it only the once but soon reintroduced it. Private investors were bailing out of the market left, right & centre leaving the tenants falling back onto the public purse in the effort to find places to house them.
It was soon brought back, so much so the govt actually increased the negative gearing benefits in an effort to entice investors back in again.
Back in the mid 80's Keating abolished it only the once but soon reintroduced it. Private investors were bailing out of the market left, right & centre leaving the tenants falling back onto the public purse in the effort to find places to house them.
It was soon brought back, so much so the govt actually increased the negative gearing benefits in an effort to entice investors back in again.
Can you post the $1 for $4.50 benefit factor please.
IMO completely, no as it is would be an absolute mess as it would put property unequal to shares as another investment. Sorting that out without massive loopholes would be impossible in such a short time. And they know investors will simply move money else where. Even us here are not wedded to property to death, well most of us!
They may well quarantine losses against gains which Keating did and then let Libs wind it back and cry "helping the rich". That us by the way.
They could as Election ploy. It would only come in July 2013. Election Sept 2013, they lose, Libs problem to fix. They get in, then their problem but nahh, they will not get in.
Who knows, well on the ropes, about to go down, try anything!
Peter 14.7
IMO completely, no as it is would be an absolute mess as it would put property unequal to shares as another investment. Sorting that out without massive loopholes would be impossible in such a short time. And they know investors will simply move money else where. Even us here are not wedded to property to death, well most of us!
They may well quarantine losses against gains which Keating did and then let Libs wind it back and cry "helping the rich". That us by the way.
They could as Election ploy. It would only come in July 2013. Election Sept 2013, they lose, Libs problem to fix. They get in, then their problem but nahh, they will not get in.
Who knows, well on the ropes, about to go down, try anything!
Peter 14.7
They would not be that stupid not with the rising costs to fund the rising costs for our ageing population and where will the funding for the massive infrastructure for government housing come from there is not much left to tax in this country ,the "PPOR" may well be in the range every time you sell pay tax on the sale they may try that ..imho..
Another reason to not is that fact with rates so low and going lower, it is unlikely to save as much as before. Rates high it would. Not that a logical argument like this would come in to it.
Peter
Peter
I dont have the link. I read it online somewhere over the years but never saved it.
If you find the papers please post them and Ill do the same.
Will do.
I would love to shove it up some friends without IPS who spout the "investors push up prices" scenario, whilst they live in their $1M plus hobby farms and oppose subdivision and medium density.
Peter q4.7
They may well quarantine losses against gains which Keating did and then let Libs wind it back and cry "helping the rich". That us by the way.
That's the only way I see it working.
Much like CG. Losses are quarantined for use to offset against a future gain.
Can see that done for ALL investment losses. Carry forward the losses until the property starts to make money, which then offsets and tax payable on the positive gearing until all used up. Add in some grandfathering to keep current owners happy.
Kinda a neat little thing.
So I don't think, totally beyond the realms of impossibilities.
Housing stock would still be supported, but refunds would be capped by the government going forward, saving the government some money, plus the lower rates would also help some.
Interesting.
Personally, I don't see negative gearing as being an overall positive as it does create inequity in the market to some degree. When I had investments that tended to be neutral to positive as that is my preference. But, to remove negative gearing would create huge pressures on existing investors and lead to unfortunate wider financial implications.
The only way to do it would be to retain it for existing properties, but not for new properties. But it's not going to happen. It would lose more votes than it would gain.
This did not happen, it was just a scare tactic at the time which became an urban myth.
There was no effect on rents, or investors bailing out of the market (and selling to who? .... other investors or former renters... zero sum game) when negative gearing was abolished.
It was only restored for political purposes to win a close election.
Who ever would purchase them.
It did happen. Obviously you didnt but I witnessed it first hand.
Tim Soutphommasane wrote an article in the SMH earlier this week about the NDIS - he was trying to make an argument for the end of negative gearing.
http://www.smh.com.au/opinion/politics/when-did-the-lucky-country-become-selfish-20130505-2j120.html
"Maybe, just maybe, this will include long overdue steps to abolish wasteful tax breaks such as negative gearing and fuel tax credits for companies. According to the Australian Tax Office, more than 1.2 million property investors claimed an income loss of an average $10,950 in 2010-11. It is difficult to determine exactly how much tax revenue is forgone because of this - but this involved $13.2 billion of tax losses in 2010-11. Fuel tax credits, meanwhile, are estimated to have cost $5.5 billion in 2011-12."
http://www.smh.com.au/opinion/politics/when-did-the-lucky-country-become-selfish-20130505-2j120.html
"Maybe, just maybe, this will include long overdue steps to abolish wasteful tax breaks such as negative gearing and fuel tax credits for companies. According to the Australian Tax Office, more than 1.2 million property investors claimed an income loss of an average $10,950 in 2010-11. It is difficult to determine exactly how much tax revenue is forgone because of this - but this involved $13.2 billion of tax losses in 2010-11. Fuel tax credits, meanwhile, are estimated to have cost $5.5 billion in 2011-12."
I think it did in a way the market went sideways for about 2 years,i was only starting off then but it may have only lasted for about 0ne-half years
there is some good books on the time in this site,about that period from then to now..
http://nickrenton.com/ppd.htm
http://nickrenton.com/neb.htm
I think comparing 1985 experience to 2013 is like comaprign a 1985 commodore to a 2103 VF. Same name but very different beast.
For a start we should all agree NG was not abolished but quarantined and Capital Gain tax introduced and Depreciation Allowances introduced. Three tax changes not one.
In 1985 if you wanted a loan the average purchaser had to have a bank history and a guarantor like parents. In 2013 the banks will say "who much $$$$!!!"
Also:
1985 Wages were lower, as a professional 18 year old I pulled $180 a week after tax, rents were cheaper I paid $35 to share a house, supply was tight, cost of goods high, cost of utilities low.
2013 wages are very high like $800 clear a week, rent are very higher like $200 a room, supply still tight, cost of goods very, very high (in 1895 you took a loan to buy white goods) and cost of utilities much higher.
I personally would supply changes if done as whole as per the Garnaut ? tax report but ALP stuffed it by excluding GST the biggest tax of all.
Like a fine watch the economy works as a whole, change one wheel and you need to adjust the lot. If not, the watch will stop working.
Regards Peter 14.7
For a start we should all agree NG was not abolished but quarantined and Capital Gain tax introduced and Depreciation Allowances introduced. Three tax changes not one.
In 1985 if you wanted a loan the average purchaser had to have a bank history and a guarantor like parents. In 2013 the banks will say "who much $$$$!!!"
Also:
1985 Wages were lower, as a professional 18 year old I pulled $180 a week after tax, rents were cheaper I paid $35 to share a house, supply was tight, cost of goods high, cost of utilities low.
2013 wages are very high like $800 clear a week, rent are very higher like $200 a room, supply still tight, cost of goods very, very high (in 1895 you took a loan to buy white goods) and cost of utilities much higher.
I personally would supply changes if done as whole as per the Garnaut ? tax report but ALP stuffed it by excluding GST the biggest tax of all.
Like a fine watch the economy works as a whole, change one wheel and you need to adjust the lot. If not, the watch will stop working.
Regards Peter 14.7
Interesting the NGing is only ever talked about in terms of PIs. What people need to realise that NGing applies to all assets.
Be interesting to see the effects of quarantining/grand fathering it across all assets.
The sweeping comments on the abolishment go along the lines of "$14B is given to evil slumlords who must be punished and the budget needs that $14B to bring it into surplus" ignoring the fact it's $14B from PIs plus all the rest from other classes and from not just private tax payers but businesses too.
Be interesting to see the effects of quarantining/grand fathering it across all assets.
The sweeping comments on the abolishment go along the lines of "$14B is given to evil slumlords who must be punished and the budget needs that $14B to bring it into surplus" ignoring the fact it's $14B from PIs plus all the rest from other classes and from not just private tax payers but businesses too.
What may also pay to think about is at that time in the 80'S ng still was in place on the ASX so just like now the funds went from property into the ASX,different times and different numbers..
