Negative Gearing under spotlight AGAIN

[Foxy Moron]

I like Henry Ergas' take on the negative gearing debate.

 

[Francesco]

I like Henry Ergas' take on the negative gearing debate.

Thanks for the reference. Good point made quantitatively about the efficiency of negative gearing for individuals in residential properties.

 

[Paul@PFI]

These reviews ignore the simple fact that a small equity interest in an IP can be highly leveraged for little cashflow risks. This is reflected in the high ROI numbers. You can buy an IP for $5,000 down and $40 a week. It can generate +CF and tax benefits. It only "loses $" if you sell. It doesnt matter iof its value falls unless you actually sell.

Its no different to the false assumption people make with shares. There are many shareholders wh0 bougt CBA shares for $5 who earn $20 a year in divs now. They dont give a rats if the price drops 40%. They still earn 400% yield. $550% with franking credits. The yield doesnt change if the share drop 50%....

 

[wategos]

Negative Gearing is a failed tax policy that has done a lot of damage. The sooner it goes the better. It's good to see the mainstream slowly coming around to this realisation, but pressure to abolish it needs to be sustained.

 

[Francesco]

Does anyone has any data about party affiliation and belief on negative gearing? It would be interesting to conduct a poll of The case for or against maintaining negative gearing for individual investors in residential properties on simplisticy dichotomy to demonstrate the probability:

ALP/Green = Against
Coalition = For

Just thinking, no offense to SS forumers who hold contrary positions to the theory!