Negative Gearing

[joeExpat]

The other thing we have to ask ourselves is; if the Gubb are losing money from NG; why are they not howling for it's removal, or why haven't they removed it after it was reintroduced back in the '80's??

They did try it back in the 80's, and it didn't seem to improve things (affordability), so it was reintroduced soon after.

Considering that the percent of the total voting population enjoying it is not that large, it's not exactly going to be a vote loser...if anything; it would be a vote winner - given the current level of public and lefty-media noise about it's perceived evils.

The voting population using Negative Gearing is huge, over 1.2 million. This is the main reason why NG remains and was reinstated in the 1980s, nothing to do with affordability or rents. A lot of these NG voters would be more marginal / central than the current NG opposition, which is picking up steam but is still not mainstream yet. The government doesn't see the opposition to NG as a threat yet but this is changing fast.

 

[Francesco]

The voting population using Negative Gearing is huge, over 1.2 million. This is the main reason why NG remains and was reinstated in the 1980s, nothing to do with affordability or rents. A lot of these NG voters would be more marginal / central than the current NG opposition, which is picking up steam but is still not mainstream yet. The government doesn't see the opposition to NG as a threat yet but this is changing fast.

What makes you think that the Coalition govt is favorable to removal of NG? Even though the media is rousing, which Coalition leader is supporting this direction? I agree Labor is happy to be accommodative, especially in opposition.

 

[BayView]

The voting population using Negative Gearing is huge, over 1.2 million.

Is this figure the total investor population?

If so; how do we know that every single one is neg geared? Some aren't.

I only own one IP now - it's very pos geared these days.

Also; what percent of the total housing market is 1.2 million investors?

Or; is this the actual amount of IP's? If so; there are less than this figure of investors due to those with multiple IP's.

 

[VYBerlinaV8]

Watched the report, and I thought there were some gaping holes in the discussion about tax.

First, how much Capital Gains Tax do property investors pay each year? Last I checked, residential property investors alone paid something like $10B per year. How much of this will be lost if we 'remove' negative gearing?

Second, what about future taxes paid when a negatively geared property becomes cashflow positive? If we quarantine losses then presumably they will be carried forward against that asset, right? So what do we really achieve here?

Third, if losses are to be carried forward (ie negative gearing is prevented), what does that mean for new investors versus investors who already hold a substantial portfolio? I can just imagine the creative accounting of having a bunch of properties at various stages of the loss/gain cycle.

I think a debate about negative gearing is a good thing, but it needs to go beyond the superficiality of reports like this and actually start to sift through the underlying issues.