G'day all,
And especially TonyC00
It's when you read the last paragraph of the article with references to "negative gearing loophole" and "halving the tax on capital gains" that you realise that how mistaken the article is
My reaction to this article was "What a crock!!!" Agree with Tony's comment re "negative gearing" and the various attempts over the years to do away with it.
But then, this:-
"halving the tax on capital gains"
Which was the Ralph review answer to doing away with the Capital Gains Index (I think that's what it was called).
How conveniently Messr. Gittins FORGOT to mention that this "halving" of the CGT was necessary in order to bring the "new" rules reasonably close to the OLD rules (CG Index).
In short, NOTHING to do with "creating" a property boom at all. If Ralph had never happened, the "old way" was so close to the "new way" as to have made no believable difference !!!!!
And, to put things in perspective, the "innercity apartments" scenario has had a major Achilles heel for MANY years (how many, I don't know.... maybe someone else does...) And that is the %age of overseas investors that are touted to purchase such investments. From figures I heard/read, nearly 50% of OTP inner-city apartments were purchased by OVERSEAS investors (who are prevented from buying 2nd-hand because of the FIRB!!)
So, they rush the only opportunity to purchase property in Australia, then, if they need to sell, they CAN'T SELL to other o'seas buyers (because the apartments are now SECOND-HAND !!!!!!!!!!!) so the number of eligible buyers instantly drops by HALF !!!!! What does THIS do to the supply/demand curve???
Is this a recipe for disaster, or what????? Enter, volatility !!! Or depression !!!!!!
In the words of the song "Give me a home amongst the gum trees, with lots of plum trees, etc...." Give me land, a home, and neighbours on the same level as you (and 40 metres away). None of this neighbours above, below, 5 metres away, etc.
Regards,