what makes property price in Australia (Sydney in particular) overpriced ?

[truong]

Negative gearing (be it property or other asset classes) is essentially a subsidy paid by workers and savers to borrowers and speculators and is bad tax policy.

And you as a banker loan money to people so they perpetuate this “bad policy”? Aren’t banks “exploiting” the system too?

It annoys me to see people like the CEO of ANZ riling against negative gearing while happily profiting from it. Is this not a betrayal of those of their customers who would suffer financially if negative gearing was withdrawn?

I would have thought, if you’re against negative gearing then you don’t facilitate it thru your own actions.

 

[InnerWestie]

And you as a banker loan money to people so they perpetuate this “bad policy”? Aren’t banks “exploiting” the system too?

It annoys me to see people like the CEO of ANZ riling against negative gearing while happily profiting from it. Is this not a betrayal of those of their customers who would suffer financially if negative gearing was withdrawn?

I would have thought, if you’re against negative gearing then you don’t facilitate it thru your own actions.

I've said it before, I'll say it again.

Bring on the abolition of negative gearing if it means that I will not be taxed on the income from cash flow positive properties.

Most rental properties rarely stay negatively geared for any longer than 7 years before they become CF+, at which point the ATO profits handsomely from the tax paid on the rental income derived from the property, particularly in a buy and hold situation where the owner may pay tax on rental income for many decades.

It is absurd to suggest that the subsidy gained from holding a loss making asset until it inevitably becomes CF+ should be forgone unless the owner of the asset can also enjoy the benefit of tax free rental income.

I know hundreds of older resi investors that no longer actively accumulate properties that are paying 10s of thousands of dollars in tax on their rental income, after 5-7 years of diminishing negative gearing benefits. It's a great deal for the ATO and they know it.

 

[emptyvessel]

I've said it before, I'll say it again.

Bring on the abolition of negative gearing if it means that I will not be taxed on the income from cash flow positive properties.

Most rental properties rarely stay negatively geared for any longer than 7 years before they become CF+, at which point the ATO profits handsomely from the tax paid on the rental income derived from the property, particularly in a buy and hold situation where the owner may pay tax on rental income for many decades.

It is absurd to suggest that the subsidy gained from holding a loss making asset until it inevitably becomes CF+ should be forgone unless the owner of the asset can also enjoy the benefit of tax free rental income.

I know hundreds of older resi investors that no longer actively accumulate properties that are paying 10s of thousands of dollars in tax on their rental income, after 5-7 years of diminishing negative gearing benefits. It's a great deal for the ATO and they know it.

Thanks for this, I was getting genuinely despondent about the whole abolish -ve gearing movement. I am perfectly happy paying tax on my rent when I am +ve geared enough to do so. Just don't nerf my accumulation phase by removing -ve gearing in the next 10 years!

 

[Token Funder]

And you as a banker loan money to people so they perpetuate this “bad policy”? Aren’t banks “exploiting” the system too?

It annoys me to see people like the CEO of ANZ riling against negative gearing while happily profiting from it. Is this not a betrayal of those of their customers who would suffer financially if negative gearing was withdrawn?

I would have thought, if you’re against negative gearing then you don’t facilitate it thru your own actions.

We lend money to for people to buy property in the market as it exists not as it should be.

And as you note, many lenders ARE doing something about it by arguing it's bad policy. But you don't like that either, it would appear.

 

[Token Funder]

I've said it before, I'll say it again.

Bring on the abolition of negative gearing if it means that I will not be taxed on the income from cash flow positive properties.

Most rental properties rarely stay negatively geared for any longer than 7 years before they become CF+, at which point the ATO profits handsomely from the tax paid on the rental income derived from the property, particularly in a buy and hold situation where the owner may pay tax on rental income for many decades.

It is absurd to suggest that the subsidy gained from holding a loss making asset until it inevitably becomes CF+ should be forgone unless the owner of the asset can also enjoy the benefit of tax free rental income.

I know hundreds of older resi investors that no longer actively accumulate properties that are paying 10s of thousands of dollars in tax on their rental income, after 5-7 years of diminishing negative gearing benefits. It's a great deal for the ATO and they know it.

In a sensible system your early losses would be carried forward and deducted from any subsequent capital gain.

Given your heartfelt concern for the ATO' you will pleased to know that this is a far better deal for them

 

[Belbo]

In a sensible system your early losses would be carried forward and deducted from any subsequent capital gain.

Would you advocate this as sensible for all investment classes or only property, and if so, why only for property?

 

[Token Funder]

Would you advocate this as sensible for all investment classes or only property, and if so, why only for property?

It's particularly poor tax policy in the property context but the general principle holds for all asset classes.

 

[Dazz]

It's particularly poor tax policy in the property context but the general principle holds for all asset classes.

.....which is only your opinion, based heavily on the fact that you currently don't invest in nor currently own any property yourself.

Lovely to be so pious standing at the water's edge, telling everyone how to swim without actually getting your toes wet.

You remind me of these expert female football commentators who know everything about the game but have never actually played the game.

 

[Belbo]

It's particularly poor tax policy in the property context but the general principle holds for all asset classes.

Why is it such poor tax policy? How do you justify your implication that investment earning activities and personal-exertion earning activities (wages/salaries) should be each taxed according to different principles?

 

[Token Funder]

Why is it such poor tax policy? How do you justify your implication that investment earning activities and personal-exertion earning activities (wages/salaries) should be each taxed according to different principles?

It's poor tax policy, among other reasons, because (a) it amounts to a taxpayer-supported incentive to borrow and speculate that costs a bomb and (b) underpins the more favourable tax treatment income derived in this way receives compared to income generated from working and saving.

I'm in favour of income being taxed on the same principals irrespective of source.

 

[Token Funder]

.....which is only your opinion, based heavily on the fact that you currently don't invest in nor currently own any property yourself.

Lovely to be so pious standing at the water's edge, telling everyone how to swim without actually getting your toes wet.

No, it's my opinion as someone with a strong interest in an equitable and administratively efficient tax policy, who has owned IPs in the past and now owns a freehold PPOR.

You remind me of these expert female football commentators who know everything about the game but have never actually played the game.

Unlike your opinions on everything from how to run bank credit policy to the lifestyle choices of pensioners.

Got any actual rational arguments to make or are insults all you got?

 

[Belbo]

It's poor tax policy, among other reasons, because (a) it amounts to a taxpayer-supported incentive to borrow and speculate that costs a bomb and (b) underpins the more favourable tax treatment income derived in this way receives compared to income generated from working and saving.

I'm in favour of income being taxed on the same principals irrespective of source.

But businesses are allowed to negatively gear in exactly the same way, just as business income receives more favourable tax treatment than personal exertion income (in that it can claim operating expenses against income where individuals can't). Would you undo this favourable tax treatment too?

 

[emptyvessel]

But businesses are allowed to negatively gear in exactly the same way, just as business income receives more favourable tax treatment than personal exertion income (in that it can claim operating expenses against income where individuals can't). Would you undo this favourable tax treatment too?

The special "business owner" privileges are the ones I struggle with the most as an individual investor. I think it is why many individuals setup complex trust and company structures. Essentially to avail themselves of the same privileges and even the playing field.

Nerf -ve gearing for individuals only if you do the same for businesses I say!

 

[Rolf Latham]

The special "business owner" privileges are the ones I struggle with the most as an individual investor. !

Which priveleges for small to medium business are those ? I need to know what Im missing out on

ta
rolf

 

[Token Funder]

But businesses are allowed to negatively gear in exactly the same way, just as business income receives more favourable tax treatment than personal exertion income (in that it can claim operating expenses against income where individuals can't). Would you undo this favourable tax treatment too?

One step at a time grasshopper. Let's get some equity and simplicity inserted into the personal income sector first before we get into the complicated mess that is the business taxation regime.

 

[Dazz]

One step at a time grasshopper.

Classic.

Let's get some equity and simplicity inserted into the personal income sector first before we get into the complicated mess that is the business taxation regime.

Oh yes please, lets. You concentrate on moaning about the inequitable state of the tax system. I'm going to adjust / adapt / overcome the current rules and make some money.

 

[Token Funder]

Got any actual rational arguments to make or are insults all you got?

Oh yes please, lets. You concentrate on moaning about the inequitable state of the tax system. I'm going to adjust / adapt / overcome the current rules and make some money.

I'll take that as a "no"' then.

 

[Belbo]

One step at a time grasshopper. Let's get some equity and simplicity inserted into the personal income sector first before we get into the complicated mess that is the business taxation regime.

I agree, our taxation system needs a complete overhaul. But this is my whole problem with what you appear to be suggesting. Start with property investors by refusing them and them alone the opportunity to employ negative gearing, in the name of equity? Give me a break!

 

[Dazz]

I'll take that as a "no"' then.

....hahaha....credit weiners....mate, you clowns take it sideways.

 

[Token Funder]

I agree, our taxation system needs a complete overhaul. But this is my whole problem with what you appear to be suggesting. Start with property investors by refusing them and them alone the opportunity to employ negative gearing, in the name of equity? Give me a break!

You're not paying attention. Not property investors; negative gearing irrespective of asset class.

It doesn't matter where you start, vested interests will object. NG is simply a particularly egregious example that is simply and quickly addressed.

By knocking it off for new purchases straight off the bat and phasing out for existing geared investments over, say, 5 years, no-one with a remotely sensible investment is dudded and future investors go into it knowing they will have to carry their own losses until it is discounted off their subsequent CG.

Gotta love the weird "I'm a well-positioned investor for whom ng is just a bonus" vs. " Removal of ng is worse than killing kittens by beating them to death with baby harp seals" dichotomy on this site....