Yes, I understand that, but it seems strange to me, especially seeing as though they are trying to distance themselves from the unions at other times.
Negative gearing to go?
- Thread starter hobo-jo
- Start date
Yes, I understand that, but it seems strange to me, especially seeing as though they are trying to distance themselves from the unions at other times.
Exactly Evand. The outer suburbs have gone to the Liberals. What better way to win back the votes. The Mortgage belt are usually paying off their Owner Occupier homes, not negatively geared on Investment properties, so would not be impacted at all by the change.
It's a clear vote winner for Labor in the May 2012 budget.
Gillard would be the worst prime minister we ever had
Has no idea of money matters and always looks for ways to punish people who take risks She will always try to look after her union mates
Well thats the politics out of the way now lets see what happens if she gets rid of negative gearing
Mr Keating tried that in 1985 and I must say he was a smart poly Guess what happened There was such a shortage of rental property that there was a bidding war to lease properties
Well it was dropped like a hot potato and Before he dropped it he gave more depriatiation allowances so in fact investors ended up better of than they were before the government abolished negative gearing
Senior
Has no idea of money matters and always looks for ways to punish people who take risks She will always try to look after her union mates
Well thats the politics out of the way now lets see what happens if she gets rid of negative gearing
Mr Keating tried that in 1985 and I must say he was a smart poly Guess what happened There was such a shortage of rental property that there was a bidding war to lease properties
Well it was dropped like a hot potato and Before he dropped it he gave more depriatiation allowances so in fact investors ended up better of than they were before the government abolished negative gearing
Senior
Evidence please
This is an older article, but I do remember reading something recently from Saul where he repeated the same story.
http://www.smh.com.au/articles/2003/08/24/1061663676588.html
SENIOR, please read.....
Thanks G MAN
I had an investment property in 1985 and was caught up in it
I am now retired and all my properties are positively geared so this wont effect me
So if they did bring it in would I invest in property (No)
Why not well what do you look for
1 Capital Growth
2 Yield
3 depreciation allowances
4 tax offsets (negative gearing)
So Limited capital growth poor yield near capital cities were I only invest
no negative gearing and in accumilation of property bonus (Land Tax)
It has been great in the past but believe it wont be worth the risk in the future
Senior
I had an investment property in 1985 and was caught up in it
I am now retired and all my properties are positively geared so this wont effect me
So if they did bring it in would I invest in property (No)
Why not well what do you look for
1 Capital Growth
2 Yield
3 depreciation allowances
4 tax offsets (negative gearing)
So Limited capital growth poor yield near capital cities were I only invest
no negative gearing and in accumilation of property bonus (Land Tax)
It has been great in the past but believe it wont be worth the risk in the future
Senior
Did you read the article?
...so you picked up it it doesn't so much support your proposition as refute it?
Can someone explain the mechanics, simply and logically, why neg gearing makes more rental housing available? (God save me from spin!)
Clearly it makes property investment attractive to a different group of investors but this group tend to be parasites. Uncontrolled, parasites kill the host.
Is the host showing severe signs of distress?
Clearly it makes property investment attractive to a different group of investors but this group tend to be parasites. Uncontrolled, parasites kill the host.
Is the host showing severe signs of distress?
Some ridiculous ideas in this thread. Why should someone with 5 $100k properties be penalised more than someone with one $500k property?
Gillard needs the boot. Instead of trying to choke demand by targetting investors, perhaps she should focus on reindustrialising Australia so that we aren't a glorified quarry that sends its raw materials overseas rather than process them here. I daresay that if people had better paying jobs, then those seemingly unnaffordable houses might be affordable.
She might also consider that lowering taxes would leave money in people's pockets, with which they can use to pay for their homes. If we reduced the size of this bloated, incompetant government, we wouldn't have such high tax rates, and an excellent way to shrink government is for that mole to quit.
Gillard needs the boot. Instead of trying to choke demand by targetting investors, perhaps she should focus on reindustrialising Australia so that we aren't a glorified quarry that sends its raw materials overseas rather than process them here. I daresay that if people had better paying jobs, then those seemingly unnaffordable houses might be affordable.
She might also consider that lowering taxes would leave money in people's pockets, with which they can use to pay for their homes. If we reduced the size of this bloated, incompetant government, we wouldn't have such high tax rates, and an excellent way to shrink government is for that mole to quit.
Yep, & it never ceases to amuse & frustrate me, many of the "hard done by's" are the first to complain about the government THEY voted for. One change that would see the effective end of the Gillard's useless lot is if Australia were to make voting non-compulsory as in the UK. A large portion of the voters would then stay in bed as they only turn up to avoid the fine anyway....... Sorry for off topic but our Govt' get me so p****d!
It's a newspaper article referring Saul Eastlakes research (which I haven't read but have had the opportunity to talk to him about) and references several reports which are available if you do some looking (subscription only, hence I can't post)
Your anecdotes ain't data but feel free to provide some ( of the latter)
I'm not worried, I'm just overwhelmed with a desire to take a run up and slap some of these politicians. And they presume to lead me. "lead". ha!
I guess because very few could afford to hold high CG properties (inner city) and fund the shortfall from after tax dollars. it costs me a lot more to buy a house in an inner suburb than it does for my tenant to live there -thus i am subsidising the tenant's wish to live in this area. Otherwise very few LLs could buy these properties, ergo less available for rent. May lead to proportionally more being available to rent in regional areas, though. Hopefully people will want to live there..
I see myself as trying to build a portfolio through long term CG that will increase the likelihood of being able to fund my own retirement. I subsidise my tenants & use the tax system available to ALL business ventures to reduce my out of pocket expenses. You consider that this makes me a parasite; and you are on a PI forum. Which is why i think this does have a good chance of getting up.
The fact that the government has postponed the tax forum, and is now preparing the masses for tax reforms without the consultation agreed to as part of their minor government arrangements should be cause for concern for all Australians, and reason enough for the independents to cross the floor but what would we expect from a Labor governement desperately in need of a cash injection.
Demanding more than is reasonable and then accepting less has always been the union modus operandi. Keating did it in 1985 when he removed negative gearing and introducing CGT. Negative gearing was returned and the CGT was retained.
A government with two and a half years left of their term and desperate to get back into surplus have nothing to lose by slugging a quite minority such as property investors, and any taxes can be offset for the poor by providing rebates and extra payments.
In the case of the property tax reforms they are selling the idea that only the rich multi-property owners will be targeted. The mum and dad investors with only one IP need not fear. The whole thing plays to the misconception of the greedy landlord against the proletariat, instead of average people wanting to be self funded retirees.
Instead of rewarding the people who want to ensure that they are not a burden on the system, successive governments at both federal and state level continue to erode the returns on property investment by unfair tax regimes.
To imply that this type of ongoing attack will not result in a move away from property investment, a reduction in available properties and increased pressure on rents is to be off with the fairies. It's time governments at all levels looked at ways to curb spending on politically motivated reforms and reward those who are willing to make sacrfices to make a better life for themselves and their families.
Regards
Andrew
If it goes, it goes a little something like this..(queue RUN DMC)
Its introduced similarly to the CGT intro in 1985, with no retrospectivity. All dwellings (new and existing) are affected. My key assumption is that Retrospective taxation is and would be such an unpalatable option for any government to pursue, it would be opening itself up to a chorus of possible court actions but more relevant the political graveyard it would be moving to.
We open up retrospective taxation for one area today, it opens the way for any future government to do something similar if it choses. How does business work in that environment? What are the affects on investment decisions? Claims of sovereignty risk so eloquently, if not overblown in the mining tax debate, are re-run. Queue other scare campaigns (HIA, REI etc) and if Abbott (who is better than any at attacking new taxes) gets on board, you have a potent attack mob.
Prices will fall in some areas without a doubt, especially where there is a prevalence of more investors. Dare I say, mortgage belt country, not inner city areas, where houses/homes have been in families for decades if not longer and have higher incomes. (Stonnington & Port Philip LGA's have the highest incomes in Victoria for example). Politically, does the government want to deliver a policy to homeowners especially in more marginal electorates that probably would reduce the price of their homes. This would be contradictory to the fundamental premise of current Federal and State government policy of trying to help people buy their own home. The message being here is some money to purchase your home and now, that we have encouraged you to buy your home, we have introduced a policy that will reduce the price of your home. Let alone the wealth impact on the economy. Refer to US, UK, Spain and other countries for recent extreme examples of this.
I hear you say, but what about those people who are looking to get into the property market? Surely they will be the beneficiaries. First point is psychology. With the ensuing negativity around prices, this would scare many people off purchasing especially those who have never purchased before. So the rush of these locked out buyers suddenly having purchasing is overblown imo.
Rents would increase. Why? The risk associated with resi investment has been reduced, as NG cushions the out of pocket shortfalls. The often heard "the tax man and the tenant pays for your mortgage". People will start to expect higher rates of return for a riskier asset class now that it doesn't have this as an incentive. At the same time, renting is clearly a more affordable (money terms) option than buying in almost all major capital cities. Do any sums against almost any suburban property and this becomes self-evident. LL's will increase their rents, trying to recoup the benefits lost from abolishing NG . Renting like having a PPOR mortgage today will become more expensive and saving for those tenants will be harder.
At the same time, those who have properties unaffected by these new laws will be the beneficiaries of an increased return counterbalanced by a possible reduction in price, at least in the short and possibly medium term. If you are not forced to sell, you now have an asset whose return is going to increase still with NG benefits.
As an aside, tenants unions may become more vigilant as rents increase, possible changes to tenancy laws. How do banks react when they see falling prices. Tighter serviceability rules? Tighter restrictions around postcodes. Who would these affect more?
Who was this policy supposed to help again?
Its introduced similarly to the CGT intro in 1985, with no retrospectivity. All dwellings (new and existing) are affected. My key assumption is that Retrospective taxation is and would be such an unpalatable option for any government to pursue, it would be opening itself up to a chorus of possible court actions but more relevant the political graveyard it would be moving to.
We open up retrospective taxation for one area today, it opens the way for any future government to do something similar if it choses. How does business work in that environment? What are the affects on investment decisions? Claims of sovereignty risk so eloquently, if not overblown in the mining tax debate, are re-run. Queue other scare campaigns (HIA, REI etc) and if Abbott (who is better than any at attacking new taxes) gets on board, you have a potent attack mob.
Prices will fall in some areas without a doubt, especially where there is a prevalence of more investors. Dare I say, mortgage belt country, not inner city areas, where houses/homes have been in families for decades if not longer and have higher incomes. (Stonnington & Port Philip LGA's have the highest incomes in Victoria for example). Politically, does the government want to deliver a policy to homeowners especially in more marginal electorates that probably would reduce the price of their homes. This would be contradictory to the fundamental premise of current Federal and State government policy of trying to help people buy their own home. The message being here is some money to purchase your home and now, that we have encouraged you to buy your home, we have introduced a policy that will reduce the price of your home. Let alone the wealth impact on the economy. Refer to US, UK, Spain and other countries for recent extreme examples of this.
I hear you say, but what about those people who are looking to get into the property market? Surely they will be the beneficiaries. First point is psychology. With the ensuing negativity around prices, this would scare many people off purchasing especially those who have never purchased before. So the rush of these locked out buyers suddenly having purchasing is overblown imo.
Rents would increase. Why? The risk associated with resi investment has been reduced, as NG cushions the out of pocket shortfalls. The often heard "the tax man and the tenant pays for your mortgage". People will start to expect higher rates of return for a riskier asset class now that it doesn't have this as an incentive. At the same time, renting is clearly a more affordable (money terms) option than buying in almost all major capital cities. Do any sums against almost any suburban property and this becomes self-evident. LL's will increase their rents, trying to recoup the benefits lost from abolishing NG . Renting like having a PPOR mortgage today will become more expensive and saving for those tenants will be harder.
At the same time, those who have properties unaffected by these new laws will be the beneficiaries of an increased return counterbalanced by a possible reduction in price, at least in the short and possibly medium term. If you are not forced to sell, you now have an asset whose return is going to increase still with NG benefits.
As an aside, tenants unions may become more vigilant as rents increase, possible changes to tenancy laws. How do banks react when they see falling prices. Tighter serviceability rules? Tighter restrictions around postcodes. Who would these affect more?
Who was this policy supposed to help again?
