Is it the end of negative gearing

[tobe]

Just to clarify for those that don't know ... NG is only for the ongoing costs of owning IP's ... ie, interest payments, PM fees, ongoing maintenance offset against income etc.

Any Capital Loss that occurs during the sale of an asset can only be offset against a future capital gain ... it cannot be claimed against general income ... however a capital gain is taxed in the financial year it occurs.

That's probably why shares won't ever be included in the NG calcs, as there is no negative ongoing expenses to offset against income - only dividends, capital gains and capital losses.

you claim NG on shares where the dividend is less than the holding costs. The holding costs include, taxes and buy in costs, interest on loans (where the purpose was to buy income producing shares), bank fees, accounants fees, financial adviser/broker fees etc.

What I think is interesting is where the ATO deny these costs for 'speculative stocks', ones that dont pay a dividend, but allow us to NG on 'speculative' housing, where the yield is insignificant but the chances of CG are great.

changing this rule might be a good way to inflate the mining sector (if it needs any help)

 

[Ed Barton]

Just to clarify for those that don't know ... NG is only for the ongoing costs of owning IP's ... ie, interest payments, PM fees, ongoing maintenance offset against income etc.

Any Capital Loss that occurs during the sale of an asset can only be offset against a future capital gain ... it cannot be claimed against general income ... however a capital gain is taxed in the financial year it occurs.

That's probably why shares won't ever be included in the NG calcs, as there is no negative ongoing expenses to offset against income - only dividends, capital gains and capital losses.

There are plenty of people who borrow to buy shares. some by margin lending and some by loans secured by property. a lot of these will be negatively geared.

 

[jaycee]

you claim NG on shares where the dividend is less than the holding costs. The holding costs include, taxes and buy in costs, interest on loans (where the purpose was to buy income producing shares), bank fees, accounants fees, financial adviser/broker fees etc.

What I think is interesting is where the ATO deny these costs for 'speculative stocks', ones that dont pay a dividend, but allow us to NG on 'speculative' housing, where the yield is insignificant but the chances of CG are great.

changing this rule might be a good way to inflate the mining sector (if it needs any help)

Correct !





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[lizzie]

Okay - I stand corrected.

Obviously I was wrong, forgot about those who borrowed to buy shares and didn't realise ... will edit my post so not to lead others astray.

Still reckon if they got rid of NG, Stamp Duty and Land tax it'd be a lot better.

 

[jaycee]

Okay - I stand corrected.

Obviously I was wrong, forgot about those who borrowed to buy shares and didn't realise ... will edit my post so not to lead others astray.

Still reckon if they got rid of NG, Stamp Duty and Land tax it'd be a lot better.

What do you think would be better ?

 

[tobe]

Still reckon if they got rid of NG, Stamp Duty and Land tax it'd be a lot better.[/QUOTE]

I think you'll find yourself welcomed by our cousins in the land of the long white cloud......

 

[kathryn d]

Obviously it wasn't obvious to me...

Where do you think people who are on any form of welfare should live ?

Apartment units..basic..all in the same building, if possible.

yeah, I know. Not PC

 

[jaycee]

Apartment units..basic..all in the same building, if possible.

yeah, I know. Not PC

You do realise that the cost to rent some apartments is the same as it costs to rent some houses right ?

What if someone says ":instead of living in an apartment in .... suburb, I'll rent a house for the same amount in ...."

Would that situation be ok with you ?

I'm just asking cause as you already present your view, I figure I may as well try to understand it...

I have not judged your view in anyway (as pc / not pc or anything else)., I'm just asking what I think are innocent questions

 

[Aaron_C]

Ah the good ol' kathryn v jaycee debate. Keep it at while I get the popcorn...

 

[kathryn d]

You do realise that the cost to rent some apartments is the same as it costs to rent some houses right ?

What if someone says ":instead of living in an apartment in .... suburb, I'll rent a house for the same amount in ...."

Would that situation be ok with you ?

I'm just asking cause as you already present your view, I figure I may as well try to understand it...

I have not judged your view in anyway (as pc / not pc or anything else)., I'm just asking what I think are innocent questions

I remember a few years back, when Rob still lived in Melbourne, we went into the city and he pointed out a couple of big apartment buildings, that were originally marketed for government assisstance.(I hope i am remembering this correctly) They were a bit run down at that time.For whatever reason, it didn't go over well.

Yes, some apts would be higher end, and cost the same as houses, and also some houses are at the lower end and would also be cheaper.

I don't think when someone is receiving government assisstance, they should get to choose the area in which they live. They can either accept it, or decline it.
The next argument from you most likely it.."what if it is not a safe area?"
Who is not making it safe? Other welfare recipients? What an incentive to get a job, don't you think?

Now jaycee, you know my view, what is yours?

 

[lizzie]

I think you'll find yourself welcomed by our cousins in the land of the long white cloud......

A lot of them over there are closer rele's than my cuzzie's bro ... and many of them are also property investors.

Why do I think it would be better ... removing taxes (giving and taking) would put the market back onto a more even keel (get rid of incentives), simplify the process of owning investment property and encourage development by removing more red tape.

 

[tobe]

a more efficient and transparent market. Like how capitalism is sposed to be.

 

[jaycee]

I remember a few years back, when Rob still lived in Melbourne, we went into the city and he pointed out a couple of big apartment buildings, that were originally marketed for government assisstance.(I hope i am remembering this correctly) They were a bit run down at that time.For whatever reason, it didn't go over well.

Yes, some apts would be higher end, and cost the same as houses, and also some houses are at the lower end and would also be cheaper.

I don't think when someone is receiving government assisstance, they should get to choose the area in which they live. They can either accept it, or decline it.
The next argument from you most likely it.."what if it is not a safe area?"
Who is not making it safe? Other welfare recipients? What an incentive to get a job, don't you think?

Now jaycee, you know my view, what is yours?

Can you pick a maximum figure you are happy for welfare recipients to pay in rent first ?

 

[tobe]

In my role I get to see a lot of FTB centrelink letters that show rental assistance, which varies substantially depending on income, and the amount of rent paid.

The proportion of rent assistance varies with the amount of rent paid, just because someone is paying lots in rent doesnt mean they get more rent assistance. its something like 25% of your income as a base level for rent, anything above that threshhold, rent assistance helps with, up to a determined market, or reasonable rent for the area.

So moving to the country, and renting a mansion for the same price as a bedsit in town would decrease the amount of rent assistance, as the market/reasonable rent in the country is diferent to the inner city.

Id say the system works pretty well for what it is intended for. Its interesting the amount of people in receipt of FTB and rent assistance.

2 incomes, average FT wage at 45 or so and the Mrs working casual to 15k or 20k and 1 kid, FTB and rent assistance. eligible for a home loan to purchase at the lower end of the scale....

 

[kathryn d]

Can you pick a maximum figure you are happy for welfare recipients to pay in rent first ?

That is for social assisstance to determine ultimately.

If it was me..I'd go by what the person making minimum wage is able to afford by themself.
Rent is usually supposed to be no more than 33% of their pay?
($15x38)x 33%=$188 week.

sounds like a good rent.

 

[jaycee]

That is for social assisstance to determine ultimately.

If it was me..I'd go by what the person making minimum wage is able to afford by themself.
That is usually supposed to be no more than 33% of their pay?
($15x38)x 33%=$188 week.

sounds like a good rent.

Ok...

If someone could get a 2 bed apartment for $188 / week for themselves and their child in one suburb.

Or they could get a house in another suburb for the same price $188/week

Do you think the welfare recipient be allowed to apply for the house or should the be limited to the apartment

I'm just trying to understand your proposed view

 

[kathryn d]

Ok...

If someone could get a 2 bed apartment for $188 / week for themselves and their child in one suburb.

Or they could get a house in another suburb for the same price $188/week

Do you think the welfare recipient be allowed to apply for the house or should the be limited to the apartment

I'm just trying to understand your proposed view

Which is generally more desirable when you have a family?
I would assume a house..right?

So the welfare recipient should get the apartment.

I've never made it a secret, I detest long term welfare.
It is a hand up, not a hand out.
I want people, to want to get off it.

 

[jaycee]

Which is generally more deisrable when you have a family?
I would assume a house..right?

So the welfare recipient should get the apartment.

So are you saying all welfare recipients should be made to rent apartments only ?

You're not making you're view very easy to understand kathryn

You doe realise that there are m100's or 100's of properties available to rent right ?

 

[kathryn d]

So are you saying all welfare recipients should be made to rent apartments only ?

You're not making you're view very easy to understand kathryn

You doe realise that there are m100's or 100's of properties available to rent right ?

neither are you..please rephrase

 

[jaycee]

neither are you..please rephrase

So what do you suggest welfare recipients should rent for $188 / week ?

Should they be told where to live ?

Should they be allowed to do what they do now, apply for what they can afford ? Something else ? what ?


If I can't see the issue with a welfare recipient paying $188 for an apartment or $188 for a house.

Do you ?

If that's not clear enough, you don't have to reply.

I'm not trying to be antagonistic for the sake of it, I'm just trying to have a discussion


lizzie seems to understand my English just fine lately, maybe ask her to clarify