Negative gearing costs other taxpayers $13b
- Thread starter MsAli
- Start date
I liked this paragraph:
I don't think it will be feasible to abolish, though..
I don't think it will be feasible to abolish, though..
Here we go again..... if negative gearing goes, just imagine the real cost of renting. I feel sorry for my tenants already.
Absolutely! I believe from what I've read here that the government would be paying more than this to house all the people that are housed via the private system.
What people who peddle this fail to understand is that the Government doesn't control housing - it is the bank policy that does. Many people who pay rent are those who can't afford to buy a house for whatever reason - lack of verifiable income, no deposit etc. Kicking investors out wouldn't necessarily mean these people could afford a property where they want to live. Unless of course the Government comes out with the USA-style Freddie Mae and Freddie Mac (remember them??) but we all know what those did to house prices.
Peter Martin is a true blue warrior, he wears his colours on his sleeve.
No, this did not happen. It is a common myth though.
The government only reversed the policy to win an election.
Just ask the simple question "who did they sell their rentals to?" to see how that argument falls completely apart.
Negative gearing has to go, it's doing too much damage. Politically difficult though, it will take a brave government, perhaps it can be capped and/or phased out gradually.
You've hit the nail on the head...Despite what we all know about the impact that abolishing NG will have on the rental market, we have to understand that governments (moreso the incumbent federal government) don't think logically and look to short term fixes and leave the long term impact of their decisions for the next government to look after.
I liked that too.... so my question is...if other countries don't have neg gearing, how do their rents stack up vs ownership? and why? have we had neg gearing for so long it is now an intergral part of our housing valuations? or is rent undervalued here and tenants are paying less than what they should be?
I know Kathryn (AlmostBob) has remarked that it is cheaper to buy than rent in Canada. (at least where she is)
I am sure i am not wording all that right
Your tenants and every other tax payer are already paying for it via the 13billion
wonder how many hundreds of billions are being paid in tax by positively geared landlords - and capital gains tax on investment property sales - and land tax?
Think I'm going to get rather a bit of a bill this year ... how about we make a deal ... get rid of NG and Land Tax in one hit?
I always have a chuckle when I read these threads, the responses from IP owners are always the same. I.e. Rents will go up! No one will rent houses any more! There will be a shortage of housing! The government needs us!
So what you're saying is that in the rest of the world, where negative gearing doesn't exist, you cant rent a home as the rents are way too high or there are no rentals available? Please.
If the only reason you invest is because of the tax deductions I'd take a good hard look at your investments and consider selling. Talk to all those investors in Great Southern or Timbercorp, the only reason people consider those was because of a tax deduction.
The net result from the potential removal of NG is that property prices would drop as demand would drop, and some investors would be forced to sell. Your yield would go up as a result though.
But don't worry too much, I can't see it happening for a while.
At most you'd see a restructure to the system such as: You can only offset the rent by the cost of the interest/other expenses. Not your other taxable income.
So what you're saying is that in the rest of the world, where negative gearing doesn't exist, you cant rent a home as the rents are way too high or there are no rentals available? Please.
If the only reason you invest is because of the tax deductions I'd take a good hard look at your investments and consider selling. Talk to all those investors in Great Southern or Timbercorp, the only reason people consider those was because of a tax deduction.
The net result from the potential removal of NG is that property prices would drop as demand would drop, and some investors would be forced to sell. Your yield would go up as a result though.
But don't worry too much, I can't see it happening for a while.
At most you'd see a restructure to the system such as: You can only offset the rent by the cost of the interest/other expenses. Not your other taxable income.
The mid 80's 'ending' of NG was quarantined and grandfathered. Those who held existing property were allowed to continue to NG it. There was no mass sell off of property by existing investors.
1.25?
I can see Julia Gillard however, standing up at a news conference stating that the benefits dished out to the fabulously wealthy IP owners needs to be reigned in as our nation can't continue to fund the exploitation of the renting battlers... and how this will bring us back to surplus and help fund the nation building nbn...
I liked that too.... so my question is...if other countries don't have neg gearing, how do their rents stack up vs ownership? and why? have we had neg gearing for so long it is now an intergral part of our housing valuations? or is rent undervalued here and tenants are paying less than what they should be?
I know Kathryn (AlmostBob) has remarked that it is cheaper to buy than rent in Canada. (at least where she is)
I am sure i am not wording all that right
Similar to some areas of the UK. Cheaper to buy than to rent. Renting is more of a short term thing that you do when you first move to an area rather than the only option. With the obvious exception of central London and Council Housing.
It would be an interesting experiment if nothing else.
I don't buy into the whole negative gearing nonsense. I want investments that make money. Not lose money so I pay less tax. Hell. I want my investments to do well. If I am paying tax on the profits from them, then I am coming out well ahead.
I agree. However, negative gearing doesn't mean you are losing money necessarily. You are incurring costs that exceed your initial income in the expectation of a capital gain in the future. A similar principle applies to people who operate multiple businesses - their losses from one business can offset the other.
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