In addition to non retrospective application, it may be worth noting that Keating's move in 1995 didn't entirely remove negative gearing, it changed the income that a loss can be claimed against.
During this period you could still negative gear but only against the income produced by the property, not all income from other sources as it is currently. Any excess losses could be preserved for later years so it wasn't as bad as it initially appeared.
Despite my flippant opening comment, it may be worth putting some planning into possible changes, after all can the tax system continue to subsidise ever increasing losses (
http://www.theage.com.au/opinion/political-news/negative-gearing-losses-a-key-drain-on-revenues-20130430-2ir6h.html"]$13 billion in 2010-11) - Who knows?
It seems that most of the negative geared properties (90%) are pre existing dwellings and given that one of the main arguments for NG is it encourages more housing stock to become available, it may be that some tinkering could be on the cards.
Some commentators like David Koch think it could be feasible that if hard pressed, a future govt may change the rules to apply to new builds only and for a limited period of 5 years.
"Negative gearing on an unproductive asset? Does it just go on for time immemorial or is it time to actually put some limits on it - to say, OK for the first five years, but if it's not producing an income after that why are you there?
It's done purely for the attraction of letting the taxman pay half. I'm not saying get rid of it all together, but there's got to be a limit - it just can't go on forever."
There's little positive about negative gearing
Interesting to note after Koch's above comment there was no further discussion on the topic. I think this demonstrates what a touchy subject it is. After all many investors whole approach and financial survival is based around it's continuation in the currently unique and very generous form.
With 10% of taxpayers/voters being NG'd landlords, in the words of Sir Humphrey it would be "An extremely courageous decision," and if ever broached, should provide hours of entertaining high RPM debate zzzzzzzzzzz...
Cheers,
Beef.
