I posted in another thread "You can't change economic factors for long" without paying a price for it.
A cornerstone of our economic system is:
An expense incurred in making income is tax deductable.
If you remove this for a select group of people or situation, then our system will become unstable.
Now to be precise NG was'nt actually abolished, just "quarantined against other income". Very big difference.
The ATO though has pretty much used this for a lot of other income sources since achieving a similar effect ie more revenue other the last decade.
Will it go back to that? Well maybe, as this applies for many "on the side" activities already.
Will they make it offset against CGT? Also a possibility.
The net effect is that people are paying to own IPs (not really investing).
The problem for the gov is that from their POV they will never see revenue on the gains of property never sold unless they tax ownership, which seems a little harsh.
So if you have a situation where people are stuck paying a house for 20yrs and it's too expensive for them to sell (as they realise their losses), and house prices don't increase relatively much, then gov revenue declines.
So out they come with a million reports on how to squeeze a few extra dollars out of those who may have some.
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Just read geoffw's post below:
Though the effect it would have nowadays is much less than it had then, and would only affect fairly high income earners out there.
And this is what may make it a good case of "tax those rich SOB landlords" for the communist good that may appeal to some.
A cornerstone of our economic system is:
An expense incurred in making income is tax deductable.
If you remove this for a select group of people or situation, then our system will become unstable.
Now to be precise NG was'nt actually abolished, just "quarantined against other income". Very big difference.
The ATO though has pretty much used this for a lot of other income sources since achieving a similar effect ie more revenue other the last decade.
Will it go back to that? Well maybe, as this applies for many "on the side" activities already.
Will they make it offset against CGT? Also a possibility.
The net effect is that people are paying to own IPs (not really investing).
The problem for the gov is that from their POV they will never see revenue on the gains of property never sold unless they tax ownership, which seems a little harsh.
So if you have a situation where people are stuck paying a house for 20yrs and it's too expensive for them to sell (as they realise their losses), and house prices don't increase relatively much, then gov revenue declines.
So out they come with a million reports on how to squeeze a few extra dollars out of those who may have some.
-----
Just read geoffw's post below:
Though the effect it would have nowadays is much less than it had then, and would only affect fairly high income earners out there.
And this is what may make it a good case of "tax those rich SOB landlords" for the communist good that may appeal to some.