Negative Gearing on chopping block

[HiEquity]

I can just picture a news article posted to Somersoft which details how speculators are hoarding fresh fruit & veggies, doubling the price for consumers. Some here would be saying, "Well food may be a human right, but why do they need to eat fruit & vegetables when they can survive on two minute noodles or rice?".

Hobo, this analogy is as irrelevant as they come. You can't rent fruit and vegetables.

In your analogy, renting a house is equivalent to eating the fruit and vegetables. Owning a house is equivalent to owning the fruit and veg shop. The first is a relevant concern for humanity. The latter is of relatively little demonstrable benefit to society (it has some benefit but has nothing to do with human rights, where the former concern is most definitely directly relevant).

If anything, home ownership discourages mobility in the economy (eg we have massive youth unemployment in Tasmania at the same time as lots of jobs going begging in the Pilbara), particularly with stamp duty as high as it is. If you want to talk about addressing imbalances that are detrimental to society, stamp duty would have to top the list - it is a pure mobility tax. Right up there with payroll tax as one of the worst forms of taxation that can be imagined!

 

[hobo-jo]

It has nothing to do with the shop. I was making the comparison between different 'grades' of food (fresh fruit/veg vs noodles/rice) and shelter (rent vs ownership).

I agree it shouldn't be expected that everyone will be able to own, many may not even want to. But there does have to be balance somewhere. We are supposedly one of the wealthiest countries and yet have a falling home ownership rate, that tells me there is an imbalance.

 

[HiEquity]

I agree it shouldn't be expected that everyone will be able to own, many may not even want to. But there does have to be balance somewhere. We are supposedly one of the wealthiest countries and yet have a falling home ownership rate, that tells me there is an imbalance.

Yet we still have one of the highest rates of home ownership in the developed world. That tells me the real balance point is likely to be a fair way down from where we currently are... with or without NG.

 

[perthguy]

Home ownership is not a human right. Neither is a tax system which treats all assets exactly the same for investment purposes. Though if you listened to those in the thread with self, social or political interest in government decisions around either, you would think that it was the case.

Look at residential property as an example.
An owner occupier pays no capital gains tax in their main residence.
An individual investor, partners and some trusts get a 50% capital gainst tax discount.
There are also CGT small business concessions.
Others, such as companies, pay full capital gains tax.

This changes in some cases whether an asset is owned for 12 months or more.

I don't think there is a tax system which treats all assets exactly the same for investment purposes.

 

[roe]

If anything, home ownership discourages mobility in the economy (eg we have massive youth unemployment in Tasmania at the same time as lots of jobs going begging in the Pilbara), particularly with stamp duty as high as it is. If you want to talk about addressing imbalances that are detrimental to society, stamp duty would have to top the list - it is a pure mobility tax. Right up there with payroll tax as one of the worst forms of taxation that can be imagined!

I think stamp duties will go in the future and will be replaced with a more reliable income stream like double/triple land tax ... this is a sure thing, as long as you hold properties you pay these tax without depending on properties boom to bring in the revenue.

I think ACT has start going down this path where they will phase out stamp duties for higher land tax in 10-15 years time.

 

[rabidz]

No change on negative gearing..
Yayy..

 

[Francesco]

In fact the Rudd programs for affordable homes by FHO is being down played. It is 'not abolishing negative gearing plus'.

 

[WillG]

I think stamp duties will go in the future and will be replaced with a more reliable income stream like double/triple land tax ... this is a sure thing, as long as you hold properties you pay these tax without depending on properties boom to bring in the revenue.

I think ACT has start going down this path where they will phase out stamp duties for higher land tax in 10-15 years time.

I believe land tax is much the same but rates are increasing at a higher rate

 

[wategos]

No change on negative gearing..

That completely sux. Gutless wonders.

 

[D.T.]

That completely sux. Gutless wonders.

Are you serious?

 

[wategos]

Are you serious?

Of course, completely. It?s a tax policy that has failed miserably.

 

[D.T.]

Of course, completely. It?s a tax policy that has failed miserably.

What makes you think that it failed?
Theyre far from gutless given all the other cost saving measures theyve just implemented. Maybe neg gearing doesnt cost them as much as you think it does?

 

[The Fence]

That completely sux. Gutless wonders.

No it does not suck, it's great!

Im off to buy some more and reap the benefits! Yay!

Gutless wonders...?

Now that's just wrong and you know it. Calm down and go for a surf.

 

[hobo-jo]

Theyre far from gutless given all the other cost saving measures theyve just implemented.

Sadly, the government is planning to increase revenue from 23% (2013/14) up to 24.9% (2017/18)? while spending stays fairly consistent at about 25.3%. The Liberal Party are trying to tax their way into surplus.

https://www.facebook.com/photo.php?...2662105520.392296.214297000519&type=3&theater

 

[Mry]

I could go back 20 years and find a quote along the lines of "The Government is seriously considering getting rid of negative gearing" every single year and nothing has happened. Its like Donald Trump running for the US presidency, popular among some groups but an empty gesture as he pulls out before he is required to submit his tax returns.

When I see legislation introduced, I might believe it but until then you are quite safe in ignoring these claims. As you can see with this Government, they'll take away benefits, raise entitlement requirements and cut health and education before considering negative gearing.

 

[Timkot]

Negative gearing should be an absolute right, if we are going to tax people on profits later on, its as simple as that. It is outrageous to tell an investor that they have to wear all risk, not write off costs but then later say if you do manage to make a profit then we are going to take a large chunk of your profit.

If the government wants to stop negative gearing then thats ok, so long as they also do away with taxing the profit.

 

[Corey Batt]

Negative gearing should be an absolute right, if we are going to tax people on profits later on, its as simple as that. It is outrageous to tell an investor that they have to wear all risk, not write off costs but then later say if you do manage to make a profit then we are going to take a large chunk of your profit.

If the government wants to stop negative gearing then thats ok, so long as they also do away with taxing the profit.

Or they could just quarantine the losses within the class, so that when you turn a profit in the future you can mitigate your taxable liability.

Much the same as business does in so many tax treatments.

 

[HotRod]

Or they could just quarantine the losses within the class, so that when you turn a profit in the future you can mitigate your taxable liability.

Much the same as business does in so many tax treatments.

I agree.

Along the same lines as carrying forward a capital loss to off-set against a capital gain.

If you have a negative loss on all you properties, that gets carried forward to off-set once you start turning a profit or when you sell it.

But, what would the effect on this be? I dare say it would cost the government more having to fund more for low income rentals as PIs would sell up and there would be less rental stock in the market. Rents might increase, putting further pressure on the government to build low income rentals.

I'm happy either way.

 

[The Fence]

Thats the funny thing about an essential service, like rental properties.

It's got to stack up no matter what !

Cut whatever they like but they will still make it a viable investment.

If not, then back to the USSR.

 

[marks]

Did anyone realise what the new wealth tax means to negative gearing?

Anyone who pays it (ie. earns more than $180k taxable income), you will get an extra 2% for the next 3yrs claimed for deductions?

Is my maths right? They mean the effect of NG just increase by 4%.....