Gen Y using super for property deposit?

[VYBerlinaV8]

http://www.news.com.au/money/supera...holas-gruen-says/story-e6frfmdi-1226159497739

Interesting idea. Obviously not law yet, but I'd be cheering. Surely anything that increases the buying power of consumers will put upward pressure on prices?

 

[wobbycarly]

Your view - LOL - but I agree with the interpretation!! Wouldn't be biased, of course.

Love this - NOT:

Grattan Institute economist Saul Eslake said the tax system was "riddled" with loopholes, not least the $4.5 billion paid out each year to affluent investors through negative gearing.

Apparently, I'm affluent.

At least they put forward the alternative view:

But the executive chairman of property developer Central Equity Ltd, Eddie Kutner, defended negative gearing saying it allowed many Australians to invest in property.

"Were it not for negative gearing, many investors could not or would not afford to invest in property," he said.

"You would find that developments would not proceed, shortages would be increased, be aggravated and so rents would be increased."

 

[Propertunity]

Personally I'm not a fan but for only one reason. Once superannuation money goes into a property it loses any "preservation status" it once had. The property could be sold any the super money spent.

 

[Sunfish]

http://www.news.com.au/money/supera...holas-gruen-says/story-e6frfmdi-1226159497739

Interesting idea. Obviously not law yet, but I'd be cheering. Surely anything that increases the buying power of consumers will put upward pressure on prices?

In favour of another home sellers' bonus?

 

[marg4000]

It ain't gunna happen.

There is a looming huge "black hole" for future welfare payments, so no Government is going to allow retirement savings (which is what superannuation is) to be reduced even slightly.
Marg

 

[VYBerlinaV8]

In favour of another home sellers' bonus?

From a purely selfish perspective, hell yeah. From a 'good for the country' perspective, not so much.

 

[Sunfish]

From a purely selfish perspective, hell yeah. From a 'good for the country' perspective, not so much.

Nothing in it for me. My remaining property is not on the market.

 

[mattnz]

Your view - LOL - but I agree with the interpretation!! Wouldn't be biased, of course.

Love this - NOT:



Apparently, I'm affluent.

At least they put forward the alternative view:

The statistics tell a different story. 75% of those claiming negative gearing have incomes under $80k per annum.

 

[Aaron_C]

The statistics tell a different story. 75% of those claiming negative gearing have incomes under $80k per annum.

Is that because after negative gearing their taxable income is only $80k?

 

[Sunfish]

Is that because after negative gearing their taxable income is only $80k?

Good point. $80k after $20k neg gearing, you're not exactly in the poor house.

 

[sydprop]

Surely anything that increases the buying power of consumers will put upward pressure on prices?

Probably but what happens when those same GenYers retire without enough funding? (I know, rhetorical - the pension!)

I think the point of compulsory super was to encourage for people to save for their retirement. There is an argument that people should have their own choice although I counter that if you are smart enough to make the choice then you would taken advantage of a tax effective SMSF.

That article was just a negative gearing bash up though..

 

[Ideo]

I still maintain that negative gearing is a crock.

Knee jerk reactions like this are the result of an unsustainable policy.

Very few other countries use negative gearing, and rentals in most of them are cheaper, as are housing costs. And you can actually make money from property rather than using it as a tax dodge.

Just my opinion, and I realise it will be unpopular.

For the record I try to be positve geared.

 

[Aaron_C]

Well Ideo you just have to make money from the system as it currently stands. For what it's worth, I think that without negative gearing you'd see hardly any developments particularly in inner-city areas. Which is fine if you own a Camberwell bungalow on a 2,000sqm block of land but it means that less people can live in the better areas.

 

[Cloudedhouse]

Ideo is pretty spot on for me.

Although Aaron_C has a point, but he is a broker. Probably loves lending for developments....think of all that trail commission aye haha

LOL. It's a bonus to prices, it's a longer term worry for the country, but socially as if Gen Y care about their super for retirement. As far as they are concerned poor old Mum and Dad will be killed off by then and they can " retire on the nest ".

 

[Aaron_C]

Ideo is pretty spot on for me.

Although Aaron_C has a point, but he is a broker. Probably loves lending for developments....think of all that trail commission aye haha

lol. Developments pay no trail But I love developments cause I'm doing one myself and it's fun to create something new.

 

[Cloudedhouse]

You dont get any trail on a construction loan?

Why is my broker always encouraging me to get one?

 

[Aaron_C]

Because he gets an upfront commission. Or maybe he wants you to make money by developing..

 

[Cloudedhouse]

Yeah he is pretty decent. Probably wants to make me rich or something!

The nerve of him... so I can borrow more and buy more and borrow more. haha

 

[Ideo]

Well Ideo you just have to make money from the system as it currently stands. For what it's worth, I think that without negative gearing you'd see hardly any developments particularly in inner-city areas. Which is fine if you own a Camberwell bungalow on a 2,000sqm block of land but it means that less people can live in the better areas.

I disagree with that.

I used to work in the UK. No negative gearing there.

The amount of both greenfield and brownfield jobs I was involved in was far greater than in Australia.

There is still massive underlying demand for property. That would still exist without negative gearing.

It is also possible to make money off property in the UK, both on rental returns and CG.

 

[Aaron_C]

I disagree with that.

I used to work in the UK. No negative gearing there.

The amount of both greenfield and brownfield jobs I was involved in was far greater than in Australia.

There is still massive underlying demand for property. That would still exist without negative gearing.

It is also possible to make money off property in the UK, both on rental returns and CG.

Of course you can make money off property in any jurisdiction. Negative gearing isn't the catalyst for it by itself. It does, however, allow for bigger property portfolios than would otherwise occur.