Negative Gearing
- Thread starter David Mark
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My personal take on NG is that it's a sugar up tool from the government to encourage investors that were making a lost to continue investing so that the economy will keep running.
It irritates me every time I heard someone tell me they "NEED" to buy a NG property because they are paying too much tax
, to the point they said their accountant suggest them to buy a NG property to offset their tax liability.
I usually tell them they only get back a portion not the full amount, and that at the end they are still earning less money even after the tax return, they always argue back with NG properties usually grow faster...which I'm confused because if you were trying to make a lost to offset tax, why would you want to gain to pay CGT = more tax?
Anyway I'm a big no no to NG...
It irritates me every time I heard someone tell me they "NEED" to buy a NG property because they are paying too much tax
, to the point they said their accountant suggest them to buy a NG property to offset their tax liability.I usually tell them they only get back a portion not the full amount, and that at the end they are still earning less money even after the tax return, they always argue back with NG properties usually grow faster...which I'm confused because if you were trying to make a lost to offset tax, why would you want to gain to pay CGT = more tax?
Anyway I'm a big no no to NG...
if you were trying to make a lost to offset tax, why would you want to gain to pay CGT = more tax?
Well, they pay CGT if they sell but they could just hold them and grow equity while getting some tax break. Basically this relies on the anticipation of high CG.
Obtaining further deductions for depreciation is a bonus, since you're claiming for capital works which you haven't actually paid upfront. This amount can offset some of the loss after the tax return.
Argh! Makes my blood run cold. If an accountant ever to me to "invest" my money so that I could lose money, I would feel like punching him in the nose. Think: wood chips, olives, tea trees... there have been dozens of disatrous money losing tax schemes. Horrifying.
Losing money is never a great business strategy.i dont understand this, why does removing depreciation make sense?
It doesn't. I was coming from the angle that depreciation is a number on an accounting sheet rather than a real, tangible object. If landlords can use Depreciation to get a reduced amount in their tax payable column, without really spending any cash to purchase anything, then it could be argued that it isn't "real". It is some imaginary factor that, like NG, allows home owners to be out-priced by investors when it comes to serviceability affording to purchase a property. I can argue that it is just as detrimental to affordability as NG is and we could suggest that it be disallowed.
I spoke to David last night.
It's a shame our off-camera conversations weren't captured as they had a lot more substance than the interview questions, but that's how tv goes.
The piece should most likely air tonight or tomorrow.
I'm interested to see how it comes together and what makes it to air.
It's a shame our off-camera conversations weren't captured as they had a lot more substance than the interview questions, but that's how tv goes.
The piece should most likely air tonight or tomorrow.
I'm interested to see how it comes together and what makes it to air.
Nice one, I'll keep an eye out for it.
To be honest though, I'm a bit disappointed in David. He just never got back to me after saying that he was interested in doing the interview. A simple "Changed my mind, sorry" would have done the trick.
Is that the 730 Report, Tonight or tomorrow?
Hugh
Depreciation is just a small part of the puzzle. One thing to consider here is that depreciation benefits are by far greater on new housing. And it's new housing that is needed to boost supply (to put a lid on demand). Governments need investors to get into new housing. On older properties, the depreciation returns are modest, so from that perspective there is not as much in them for investors.
Scott
So would a doubling of depreciation benefits be a better policy ?
I fear that would have the spruikers out in force and there would be some stuff getting built in questionable locations just for the tax benefits.
See post number 12.
Food for thought :
http://somersoft.com/forums/showthread.php?p=1311763#post1311763
Food for thought :
http://somersoft.com/forums/showthread.php?p=1311763#post1311763
Yeah, it was for 7:30.
I'll drop a message in here when it's airing (when I know). I'm hoping there are comments open somewhere online afterwards. Always interesting to read the debate.
Which SBS channel? I'll watch it tonight
Which SBS channel? I'll watch it tonight
It's on the ABC.
Not airing tonight. Possibly tomorrow.
Oh! I hope you don't get bumped.
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