Negative Gearing and Capital Gains Tax Discount Should Be Abolished

Lclearance fan on 11/09/2021 - 20:29
Last edited 12/09/2021 - 09:13 by 1 other user

Property investors have had it too good for too long, claiming Negative Gearing and CGT tax incentive. Property investments sectors are mature and highly profitable, NGs and CGT serve no purposes.Investors provide rental housing are not out of their kindness or altruism but post the opportunity cost for home seekers.

NGs and CGT tax breaks should be abolished so that these funding can be recouped as Government's revenues. People's' power can force policies makers to flatten the forever housing prices rise then you'll have a chance to buy a house at OzBargain.

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Comments

- - - - pogichinoy on 13/09/2021 - 13:04
        
        +1
        
        @brendanm: People have been making bad choices before the pandemic.
        
        brendanm on 13/09/2021 - 13:19
        
        +2
        
        @pogichinoy: Yep, they sure have, buy that has nothing to do with people's jobs being lost, as well as businesses, due to government action.
        
        pogichinoy on 14/09/2021 - 16:02
        
        @brendanm: Arguably some people have done well during the pandemic and received two Jobkeeper payments.
        
        It's kinda unfair to put the entire blame on the govt for the loss of jobs because community health takes priority.
        
        brendanm on 14/09/2021 - 16:27
        
        +1
        
        @pogichinoy:
        
        Arguably some people have done well during the pandemic and received two Jobkeeper payments.
        
        They shouldn't.
        
        It's kinda unfair to put the entire blame on the govt for the loss of jobs because community health takes priority.
        
        Most of what they've done is moronic.
        
        JimmyF on 14/09/2021 - 09:29
        
        @brendanm:
        
        You mean people who had their livelihoods taken from them by the government during lockdowns?
        
        Those people got jobkeeper
        
        I have no sympathy for those that overextend themselves and make poor decisions
        
        Those people got a 12 month pass on making repayments
        
        however this was out of their control, and sue to massive government overreach.
        
        Not really, many people who didn't over extend themselves had no issues in paying the debt they had.
        
        brendanm on 14/09/2021 - 10:09
        
        @JimmyF: $750 isn't quite what a lot of people are making normally.
        
        Those people got a 12 month pass on making repayments
        
        Nope, people that had their jobs and businesses ruined by the government got that. It's also not a pass, it all still had to be repaid, plus interest, so they are actually further behind where they were.
        
        Not really, many people who didn't over extend themselves had no issues in paying the debt they had
        
        Those would be the ones who still had jobs/businesses that weren't shut down by grubs.
        
        JimmyF on 14/09/2021 - 11:00
        
        @brendanm:
        
        $750 isn't quite what a lot of people are making normally.
        
        For sitting at home doing nothing, its not bad. These people could also park their loans too. So $750/wk should have covered your food/bills as loan repayments didn't need to be covered.
        
        Nope, people that had their jobs and businesses ruined by the government got that. It's also not a pass, it all still had to be repaid, plus interest, so they are actually further behind where they were.
        
        Been reading news corpse much? How many businesses do you know that have closed?
        
        Around me, I know of 3 businesses that closed and honestly I wondered how they stayed opened BEFORE covid. So shocked not shocked….
        
        It's also not a pass, it all still had to be repaid, plus interest, so they are actually further behind where they were.
        
        It was a pass. They don't have to repay the missed payments. Yes they still have the balance owing and yes that racked up interest at the grand rate of 2% during this time. But compared to the 'normal' rules of I can't pay my loan, nothing happened to them. Not even a note on their credit report.
        
        Those would be the ones who still had jobs/businesses that weren't shut down by grubs.
        
        Ahhh yes…… that sums up everything. As a QLD, not sure what you're talking about, not many days of lockdown up that way compared to the rest of the world.
        
        brendanm on 14/09/2021 - 13:08
        
        @JimmyF:
        
        For sitting at home doing nothing, its not bad. These people could also park their loans too. So $750/wk should have covered your food/bills as loan repayments didn't need to be covered.
        
        Exactly why the loan repayments thing was done.
        
        Been reading news corpse much? How many businesses do you know that have closed?
        
        I don't read News corp. I've spoken to plenty of people from Melbourne and Sydney who have had issues.
        
        It was a pass.
        
        It's not a pass, as they still have to pay it back, plus interest. Assuming your (low) figure of 2%, and a mortgage of $500k (probably low for Sydney/Melbourne), that's an extra $10k to pay up front, plus more for the life of the loan due to the balance being that bit higher due to 1 year of missed principal payments.
        
        But compared to the 'normal' rules of I can't pay my loan, nothing happened to them. Not even a note on their credit report.
        
        As their shouldn't be, as their businesses weren't shut down due to their own bad choices, it was due to government interference.
        
        Ahhh yes…… that sums up everything. As a QLD, not sure what you're talking about, not many days of lockdown up that way compared to the rest of the world.
        
        I can look past my own backyard. I talk to lots of people from Sydney/Melbourne who are up this way, and I know plenty of people down there are doing terribly. I feel sorry for them, as they are being shafted, through no fault of their own.
        
        JimmyF on 14/09/2021 - 13:46
        
        @brendanm:
        
        I've spoken to plenty of people from Melbourne and Sydney who have had issues.
        
        But had these people that had their jobs and businesses ruined as you claimed? Having 'issues' during a pandemic is expected.
        
        So what I'm hearing is NO you haven't heard any businesses going under and closing, just repeating garbage you read in the news corpse press?
        
        Bit like news corpse keeps saying VIC kids are doing so 'badly' at home schooling they will be so far behind blah blah, but the NAPLAN results just came out, and what do you know? VIC kids are on top beating out the other states that didn't have home schooling.
        
        I can look past my own backyard. I talk to lots of people from Sydney/Melbourne who are up this way, and I know plenty of people down there are doing terribly.
        
        Can't be doing too "terribly" if they are up in QLD for a holiday ;)
        
        I feel sorry for them, as they are being shafted, through no fault of their own.
        
        You understand how a free market and capitalism works? People get shafted daily pre pandemic through no fault of their own, but hey that's capitalism for you! We all love it while making money from it!
        
        tomfool on 14/09/2021 - 09:19
        
        +2
        
        @JimmyF: Renters were also given a no questions asked don't pay your rent for 6 months waiver. I seem to recall many discussions last year about how renters had negotiated their rents down during the lockdown or broken their lease for a much cheaper place.
        
        dji1111111 on 12/09/2021 - 20:34
        
        @JimmyF: Then why are you so upset with that wonderful wealth of knowledge. You should already be a property mogul. You should be celebrating how easy it is to get rich with property. That's essentially what you are preaching now
        
        JimmyF on 12/09/2021 - 20:54
        
        @dji1111111: scroll up, but I see you're one of the "I've got mine" so screw you going around crowd….
        
        dji1111111 on 12/09/2021 - 20:58
        
        @JimmyF: Nope. I'm the "I didn't end up owning my properties by doing nothing or getting anything handed over to me for free" crowd.
        
        If you think the general population really cares about others first, it's time for a serious wake up call.
        
        JimmyF on 12/09/2021 - 21:00
        
        +2
        
        @dji1111111:
        
        If you think the general population really cares about others first, it's time for a serious wake up call.
        
        Yes you have shown us that indeed tonight with your comments. Glad you 'got yours'
        
        dji1111111 on 12/09/2021 - 21:03
        
        @JimmyF: And maybe that's where you are going wrong dude. Time to brush up on how the world operates. Don't blame the property price on tax legislation. Blame the US Feds and our reserve bank.
        
        JimmyF on 12/09/2021 - 21:06
        
        -1
        
        @dji1111111:
        
        And maybe that's where you are going wrong dude
        
        Gone wrong? How so, you assume I don't own property.
        
        dji1111111 on 12/09/2021 - 21:10
        
        +1
        
        @JimmyF: I didn't say anything about you owning or not owning which I give zero rats about.
        I'm pointing out how little knowledge of world finance you and people nitpicking on tax legislation for the property price have.
        
        Did you or people whinging help people who currently own properties buy their place? Probably not. If anything these people would have been calling others stupid for getting into debt or paying too much when they expect a crash just around the corner. So why are these same people expecting help?
        
        Oh and by the way, I hate properties as an investment so if you think I'm saying these things because I love properties , you assumed wrong.
        
        JimmyF on 12/09/2021 - 21:52
        
        +1
        
        @dji1111111:
        
        I'm pointing out how little knowledge of world finance you and people nitpicking on tax legislation for the property price have.
        
        Saying I think we shouldn't have neg gearing and CGT savings applying to property means I have little knowledge? Hmmmm ok
        
        Did you or people whinging help people who currently own properties buy their place? Probably not
        
        Well supporting to remove neg gearing and CGT savings is more support than you are offering.
        
        Oh and by the way, I hate properties as an investment so if you think I'm saying these things because I love properties , you assumed wrong.
        
        So you would have no issues with neg gearing and CGT going away for property…
        
        sarahlump on 13/09/2021 - 09:06
        
        @dji1111111: umm, you do realise we live in an interconnected society, that means we do care about others first.
        
        brendanm on 13/09/2021 - 10:18
        
        @sarahlump:
        
        that means we do care about others first.
        
        You are delusional.
        
        dji1111111 on 13/09/2021 - 10:48
        
        @sarahlump: Haha you are delusional. You probably tell yourself you care about others first but put yourself in a dire situation and you will be the first one to ditch others to look after yourself.
      - MrFunSocks on 13/09/2021 - 09:17
        
        +2
        
        @dji1111111: Exactly!
        
        I now own a second house, just moved in to it, but I bought my first house and lived in it for 12 years, many of those years on about the "average" australian wage, and saved my butt off to be able to afford a 20% deposit on a significantly better house. I don't want to sell my first house because I can afford not to, and I want to have passive income so I can hopefully retire early or at least retire in comfort knowing that if shit hits the fan I have a house that I own outright to live in or sell. I'm in the process of renting it out as we speak, and there are significant costs associated with doing so. I won't be making a cent of profit from renting it out either, not until the mortgage is paid off in another 5-7 years. I've taken on significant financial burden to do so, and it's ridiculous to think that people say I'm "taking advantage of others" or anything like that. I'll be providing a rental house to someone that either can't afford to buy a house or just chooses not to.
        
        cameldownunder on 13/09/2021 - 17:09
        
        -4
        
        @MrFunSocks:
        
        I want to have passive income so I can hopefully retire early or at least retire in comfort
        
        Or so I can exploit other people for my relaxed life.
        
        there are significant costs associated with doing so.
        
        Typical argument used for property investors, forgot to mention that those costs are covered by the renter
        
        I won't be making a cent of profit from renting it out either, not until the mortgage is paid off in another 5-7 years.
        
        So repaying the mortgage is not making a profit ? No ? You repay a Mortgage of 1 Mio, but thas't not profit ?
        
        I've taken on significant financial burden to do so
        
        Not burden and not significant. You have a calculated risk, protected by politicians and banks.
        
        I'll be providing a rental house to someone that either can't afford to buy a house or just chooses not to.
        
        That's the biggest BS of property investors. Because of investors price go up, and people can't afford. Unless, you bought an empty block of land, built a house and renting it now. Otherwise, if it's a recycled house, you have done NOTHING except exploiting people
        
        Anyhow. Congrats of managing to join the "exclusive" club of sharks & piranhas living of other people.
        
        JimmyF on 14/09/2021 - 09:36
        
        +1
        
        @cameldownunder:
        
        That's the biggest BS of property investors. Because of investors price go up, and people can't afford. Unless, you bought an empty block of land, built a house and renting it now. Otherwise, if it's a recycled house, you have done NOTHING except exploiting people
        
        Yep this is the biggest lie property investors spin on people….. My 10 properties are providing a 'home' to someone….. But wait, the rent they pay to live there covers the holding costs/loan repayments.
        
        So because people hoard property, it pushes up the prices as there is reduced supply.
        
        MrFunSocks on 14/09/2021 - 14:44
        
        +5
        
        @cameldownunder:
        
        Or so I can exploit other people for my relaxed life.
        
        How is renting out my home that I bought and lived in for 12 years exploiting other people?
        
        Typical argument used for property investors, forgot to mention that those costs are covered by the renter
        
        I don't have a renter, so no, those costs aren't covered by anyone. I have to spend money to get everything up to code and shipshape before renting it out. Also if the oven was to break, the renter doesn't cover it - the owner does.
        
        So repaying the mortgage is not making a profit ? No ? You repay a Mortgage of 1 Mio, but thas't not profit ?
        
        I didn't buy a house to rent, I am renting out my house that I bought to live in and did so for 12 years. You think that I should be forced to sell it just because you don't own a home? What type of stupid logic is that?
        
        Not burden and not significant. You have a calculated risk, protected by politicians and banks.
        
        You have no idea lol. I have about 5-6k worth of repairs/upgrades to do to make sure I don't get a renter suing me.
        
        That's the biggest BS of property investors.
        
        I'm not a "property investor" like you think. I bought a new house to upgrade and live in, and I still own the first house that I bought. Instead of selling it I am going to rent it out. How on earth is that "exploiting people"? Seems you're just angry at your own situation and want everyone else to be pulled down to your level.
        
        Cartman2530 on 14/09/2021 - 17:44
        
        +1
        
        @MrFunSocks: Your situation sounds exactly the same as mine. Good on you!
      - coffeeinmyveins on 15/09/2021 - 12:54
        
        @dji1111111:
        
        I think it's sad that people who took financial risks and sacrifice to invest in properties are being labelled as if they are taking advantage of others' misfortunes.
        
        Don't blame your own financial decision on others. Same people whinging are probably the people who have been crying bubble and market crash for years and never got in. Probably the first ones to mock people with properties as soon as the market turns around
        
        insert [found the boomer/property investor]
        
        But seriously, property in Sydney especially is like a ponzi scheme. You took a "risk" (lol) to get into an inflated market, and you want to see it go up, because you want to secure your future and money. So you're not directly taking advantage of people, but yeah.
    - cameldownunder on 13/09/2021 - 09:56
      
      -1
      
      We bought out house back in 2012, and now we probably could sell it for 3x the price.
      Do I think about selling: No. It's my home, nobody can kick me out, and I am not interested in selling
      
      And I would be happy if other people could afford the house as I did at my time.
      Would it bother me if my house would be rated "only" at 150% ( 5% yearly gain ) instead of 300%? Probably not. Am I an exception? Probably yes.
      
      We see so many "Role models" like Bill gates, Steve Jobs, Jeff Bezos ( all billionaires ) that we have become greedy our self.
  - pogichinoy on 12/09/2021 - 16:05
    
    +1
    
    I think it's more so owners who aren't feeling sympathetic for first home buyers recently became keen after years of yolo'ing.
    
    e.g. colleague at work hit 42 and realised he had nothing against his name and wants to buy a place. He has spent years living in shared housing, working in IT, but pisses his money away each weekend.
    - dji1111111 on 12/09/2021 - 20:36
      
      +9
      
      Why exactly would anyone be sympathetic about someone else's poor financial choice when they were young? A lot of people started off with their first property by choosing to not spend money on stuff other people of their age group were spending on. Now that tables have turned, why would they feel sympathetic to anyone when they have made sacrifices of their own to get to where they are now. Get real… unbelievable people
      - JimmyF on 12/09/2021 - 20:56
        
        @dji1111111:
        
        Why exactly would anyone be sympathetic about someone else's poor financial choice when they were young?
        
        And how much was a house to buy when you had been young?
        
        What is that house now worth today?
        
        dji1111111 on 12/09/2021 - 21:01
        
        +2
        
        @JimmyF: I'll tell you what. My income when I first bought my house was only one-tenth of the property price. Despite the recent surge in price, my current income to house price ratio is higher than when I bought my first property.
        
        pogichinoy on 13/09/2021 - 00:55
        
        @JimmyF: It was 6.9x my income. 1/1 apartment.
        
        Start small and upgrade or wait till you can afford 1.7M for a nice house in a nice area in Sydney.
      - sarahlump on 13/09/2021 - 09:08
        
        -4
        
        @dji1111111: thank you so much for buying houses so the rest of us can't. and thank you again for comodifying housing. I'm working on a business to lease people their bodies to them from birth. you should invest…
        
        cameldownunder on 13/09/2021 - 10:01
        
        -2
        
        @sarahlump: I've +1, but be ready for a barrage of negs.
        
        brendanm on 13/09/2021 - 10:19
        
        @sarahlump:
        
        thank you so much for buying houses so the rest of us can't
        
        You should have plenty of money saved from not buying food.
        
        dji1111111 on 13/09/2021 - 10:57
        
        +6
        
        @sarahlump: You really have a strange view of the world. I didn't buy a house so that others can't. The fact that you can't buy one is on you, not me or anyone else. I bought it because I thought I should do something with my money at the time.
        
        Lovely blame game there. Maybe reflect on your decisions before blaming others.
        
        How is owning properties = commodifying? Everything in the world is paid for by money so you could say that about everything.
        
        Guess what? Construction companies build houses to make profit in the first place too. Are you going to vilify them too for doing that?
        
        sarahlump on 13/09/2021 - 13:55
        
        @dji1111111: you're not a construction company building things, you're buying things up it might not be your intention to put others out of housing but that's the effect.
        
        you didn't state whether or not you'd be down to invest in my new business. I need people to lobby govt to let me lease people their bodies…like slavery but its ok cause they can still make extra money on top of their lease. You seem like someone who would be down for slavery.
        
        dji1111111 on 13/09/2021 - 17:34
        
        +2
        
        @sarahlump: Haha how is that different though? Well I have paid stamp duty, pay a much higher council rates, higher interest, obscene amount in land tax everywhere all just because I own a property for investment purpose. I think there's plenty of areas the government is penalising people just because they own more than one property. Where do you think all these additional costs borne by investors go?
        
        sarahlump on 22/09/2021 - 19:14
        
        @dji1111111: renters
        
        dji1111111 on 22/09/2021 - 19:59
        
        @sarahlump: So you are just a sour grapes who get annoyed with anyone who makes profit from doing anything lol
        Maybe you should get off your butt and do something as well
        
        tomfool on 14/09/2021 - 09:27
        
        @sarahlump: Woolworths, Coles and other essential item retailers don't farm the items themselves they purchase them and sell them with a margin to make a return. This is just how the economy works.
    - Cartman2530 on 14/09/2021 - 17:56
      
      +2
      
      Those people that pissed away their money were never getting a place, whatever their age. You need to have solid financial discipline to own any house, before and after, otherwise you wont get to keep it..
  - zorodluffy on 13/09/2021 - 15:17
    
    -3
    
    not really, people should just work harder…
    
    im mid 20s and my parents helped me with a deposit for my first doo upper house around 2013…
    
    it has since increased quite a bit and with the equity i paid back their deposit.
    
    also got a another house since then around 2016 and thats gone up quite a bit as well.
    
    Looking to get maybe a 3rd and 4th with the equity!
    
    just start small and build equity guys, seesh not complicated!!
    - JimmyF on 13/09/2021 - 15:38
      
      +1
      
      not really, people should just work harder…
      
      So its lazy people then, who just need to work harder like you did?
      
      and my parents helped me with a deposit
      
      hahahahahaha yeah sounds like you worked really hard at earning that deposit indeed…… More like your parents 'worked hard' you just got it handed to you on a plate.
      
      So your answer is everyone needs rich parents to front you the deposit? Hmmmm ok.
      - zorodluffy on 13/09/2021 - 15:53
        
        -1
        
        @JimmyF: my bad.
        
        yes, just get rich parents like me.
        
        2 houses, and another 2 on the way babyy
        
        JimmyF on 13/09/2021 - 16:22
        
        +1
        
        @zorodluffy:
        
        yes, just get rich parents like me.
        2 houses, and another 2 on the way babyy
        
        Who gave you the kick start into the market…. who without this, you wouldn't have your property portfolio today.
        
        So its laughable that you claim others just need to 'work harder' when you yourself got a handout from your parents and didn't really 'work' for it.
        
        zorodluffy on 13/09/2021 - 17:20
        
        @JimmyF: i told you already, get rich parents.
        
        JimmyF on 13/09/2021 - 17:48
        
        +1
        
        @zorodluffy:
        
        i told you already, get rich parents.
        
        No, you first 'claimed' people should just work harder… Its the laughable answer for working harder in your case, was rich parent handout.
        
        zorodluffy on 14/09/2021 - 11:29
        
        @JimmyF: i worked hard to get in my mamas belly
        
        JimmyF on 14/09/2021 - 11:59
        
        @zorodluffy:
        
        i worked hard to get in my mamas belly
        
        No that was your daddy 'working' hard, not you!
        
        zorodluffy on 14/09/2021 - 12:21
        
        @JimmyF: i beat all my bros to my mamas belly
      - Jtam01 on 15/09/2021 - 17:31
        
        @JimmyF: The world is not fair.. deal with it..
        
        You can only do what you can with the cards dealt to you. I'm assuming you live in Australia. You are already luckier than most.
        
        JimmyF on 15/09/2021 - 18:36
        
        @Jtam01: sure sure…… It certainly isn't 'fair' that people claim people should just work harder… So they can get house, but then say they got a handout from the parents. hahahahahahahahaha yeah…. Cool story.
theHMASfriendship on 11/09/2021 - 20:37

+4

Ok
FLICKIT on 11/09/2021 - 20:38

+2

There was a similar thread the other day:
https://www.ozbargain.com.au/node/649367

and this one earlier today has a similar theme also:
https://www.ozbargain.com.au/node/650468
clearance fan on 11/09/2021 - 20:38 Comment score below threshold.
- popsiee on 11/09/2021 - 20:40
  
  +5
  
  Just get an OZ average wage job of about 78K and housing affordability will be easy .
  - Bjingo on 16/09/2021 - 16:27
    
    the best part about that figure is the Median wage is around 50k meaning there are some people on the high end skewing that average majorly
- SBOB on 11/09/2021 - 20:40
  
  +8
  
  Such a coherent and well thought out comment.
- theHMASfriendship on 12/09/2021 - 01:06
  
  +3
  
  Any bargains?
SBOB on 11/09/2021 - 20:39

+11

Well, I guess it's better than a first poster asking about best car or what do after a crash with no insurance.
- Antikythera on 12/09/2021 - 12:03
  
  +1
  
  or what is the the best car for crash safety after a crash.
- cameldownunder on 13/09/2021 - 10:03
  
  +1
  
  How to reduce the fine for girlfriend parking in a handicapped parking and not being handicapped
- Bargainitis on 14/09/2021 - 16:10
  
  -1
  
  hahaha though its starting to get a little repetitive isn't it…
  
  Oh no…anyway meme
SF3 on 11/09/2021 - 20:56

Same school of thought as those that allow for it, a “What’s in it for me” mentally.

Zero sum game.
jug123 on 11/09/2021 - 20:56

+12

just wondering what you think happens to the negative geared property after 5 -10 yrs? They become postively geared and then those same landlords pay tax on that investment. Most serious property investors never sell unless they have to and they bank on having regular income from the rent in retirement so CGT isnt a problem.
Stop commenting on what you read in the media and do your own reserach
- Vote for Pedro on 12/09/2021 - 10:20
  
  +17
  
  Why should i be subsidising any part of a property investors business?
  
  It’s different to other business losses. It is insane you can offset business losses (the property) against an unrelated income stream (regular wage).
- NigelPearson on 12/09/2021 - 11:08
  
  +10
  
  The owners buy another two properties, with a more massive loan, to hide the income from the first?
  - Laurana on 13/09/2021 - 08:40
    
    Why would they do this in preference to buying properties that are positively geared? Even if they have to pay tax on the $10k they made. It’s still better than losing $10k.
    - cameldownunder on 13/09/2021 - 10:08
      
      Because the properties are so expensive that they are not returning profits, unless they are sold.
      Why would someone, year after year, lose money on property? Because on the other side it's value would grow bigger than the money put in.
      How can a system like that hold up like this? Has to be a Ponzi scheme !
      And it is. Helped by the country's government.
StonedWizard on 11/09/2021 - 20:57

+12

Negative gearing isn’t the issue. Low interest rates are.

Raise rates to 5% or more and watch the housing market slow down.
- justgooddeals on 11/09/2021 - 23:30
  
  +2
  
  Yes. This. In the early 1990’s(can’t remember exactly when-so long ago) fixed interest mortgage rate was close to 17%.
  
  Properties were lot cheaper but interest rates were lot higher.
  
  So properties prices may have increased dramatically but the cost of servicing the actual loan . Not so much.
  - MrThing on 12/09/2021 - 00:00
    
    +3
    
    with the debt swirling around the world these days, we will never see interest rates that high again…
    
    every person, company, country are so up to their eyeballs in debt rates of 17% would cripple the world
  - Antikythera on 12/09/2021 - 12:06
    
    +4
    
    in 1988 I literally got 17% from putting my money in a term deposit. luckily it was a building society other than Pyramid.
  - MrFunSocks on 13/09/2021 - 09:28
    
    Home loans were like $60k back then though, so they were still far better off back then even on smaller wages.
- Ghost47 on 12/09/2021 - 12:47
  
  +4
  
  If our economy actually amounted to anything more than relying on China for growth maybe we could do that. Won’t happen though, and our economy is also reliant on construction.
  
  When China pulls out more we’re stuffed, we need them to be balls deep in us.
  - sangohan on 12/09/2021 - 15:56
    
    +3
    
    married to the USA, but needs to be (profanity) by china. Great lord…
- Dr-StrangeLove on 13/09/2021 - 12:47
  
  Isn't that like a double-edged sword? No one would want to borrow if the interest rates went up and wouldn't that just stop people from spending on big items significantly decreasing the tax collected to keep the economy running?
  - StonedWizard on 13/09/2021 - 15:33
    
    @Dr-StrangeLove - Thats why I said rates need to be around 5 - 6%
    
    It’s not like they’d raise the rate all at once. They’d gradually raise it over time.
Unsafe on 11/09/2021 - 21:03

+13

NG & CGT were never necessary for any reason other than the politicians & those who pay the politicians wanted some tax relief.

It was sold to the people through the misinformation that this was necessary to spruik interest in property as a tool of investment, required for the building of Australia's rental property stocks. But you're correct, all it did was increase property prices.

It is what it is. Buy a place, your mate buys a place next door & you rent your places out to each other. NG ahoy.

System's cactus, but it's capitalism incarnate. So it ain't gonna change, but this formula can help first home buyers even up the cost a little.
- cloudy on 12/09/2021 - 09:00
  
  Unsafe comment
- tomfool on 14/09/2021 - 09:38
  
  CGT discount replaced the inflation indexation. You have to have one or the other otherwise longer term investing is counter productive.
bohn on 11/09/2021 - 21:05

I love my tax breaks - step back.
burningrage on 11/09/2021 - 21:30

+15

Just so you know, new member since 4 hours ago and this person's FIRST post has got nothing to do with the purpose of this website.

Must be rent-a-<insert your politics>-supporter quip.
- [Deactivated] on 12/09/2021 - 12:24
  
  +5
  
  you obviously don't know the concept of opening a new account
- Ghost47 on 12/09/2021 - 12:51
  
  +4
  
  Everyone starts somewhere man. It’s just a thread on the internet, giving the benefit of doubt here can’t be that big of a deal surely?
cauilfield on 11/09/2021 - 21:32

+11

what is the purpose for this topic again? OP to b*tch about the fact they can't afford the property?
Trying2SaveABuck on 11/09/2021 - 21:40

Sorry OP you got no idea what you are talking about, negative gearing literally means you are losing money on a property but get a bit of a tax deduction to cushion the loss. ie depreciation on the building, costs involved in being an investor etc.

As got CGT discounts this would discourage any property investing and considering the massive taxes property investors pay on Stamp duty, rates and land tax i think that property investors probably put more into the economy then the media gives them credit for.

This stupid idea of 'taxing' the rich only results in hurting the poor the media doesnt seem to ever tell the full story but if you make it unattractive for people to invest there money in Australia then they will invest it somewhere else and that is bad for everyone.

You want to stop people investing as much into property make other investments more attractive ie have a 100% Capital gains off set on shares/EFTs held for longer then 3 years
- morse on 11/09/2021 - 22:47
  
  +9
  
  negative gearing literally means you are losing money on a property but get a bit of a tax deduction to cushion the loss
  
  People who negative gear are very often land banking at the same time so eventually they will make a profit when they sell - often a sizeable one. The tax deduction from negative gearing makes land banking more attractive.
  - Trying2SaveABuck on 11/09/2021 - 23:42
    
    +3
    
    They still pay stamp duty, rates, land tax and CGT at point of sale - removing property investors right now would probably destroy the Australian economy
    
    In addition other benefiting industries building/tradesmen, real estate (both sales/property managers) and insurance companies
    
    Renters also benefit with a more competitive rental market, taking further burden off social housing
    
    Look im not a millionaire but i can see the benefits of attracting investors, perhaps the rules for foreign investors need to be significantly tightened but i think we pay too much tax in this country i'd rather Australia strive to be a tax haven and have billionaires park there money here that benefits us opposed to companies like BHP and Telstra who are 'Australian' companies but based in Singapore for tax reasons.
    
    The idea of tax the rich needs to change to "welcome the rich" - let them pay 4-5% tax - you get enough rich people to park there money here i can tell you we would all be wealthy from the benefit.
    
    Too bad people in this country are too short sighted - it is why Switzerland and Singapore are rich af
    - morse on 12/09/2021 - 03:50
      
      +11
      
      I’m fairly comfortable and have extra funds to invest in property so these tax breaks benefit me as an individual, but I can still see how they are driving up property prices in a way that isn’t good for the overall economy. Remember people who are pouring everything into a mortgage or saving a deposit aren’t spending this money elsewhere.
      
      There would also be less renters and more people buying their own property if prices were more affordable. Social housing is a tiny percentage of the housing market and many of the people who utilise it would struggle to afford a private rental irrespective.
      
      Switzerland actually has about the same tax revenue to GDP ratio as Australia. And if you’re a man in Switzerland you need to have completed your military service to get your full tax break.
      
      We need to stop thinking about any economic growth being good growth in Australia- this is just something pollies like to do to make themselves look good. Real economic strength should have actual value for the people who live in the country. Owner occupied property has inherent value through housing the owner and their family and setting them up for retirement.
      
      As for the potential for Australia to be a tax haven for large business - seems a little outside the scope of a discussion re negative gearing and CGT breaks.
      - Trying2SaveABuck on 12/09/2021 - 14:19
        
        +1
        
        @morse: "We need to stop thinking about any economic growth being good growth in Australia"
        
        You lost me at this? assuming a economy can only 'grow or shrink' (theoretically neutral or 0 change is possible but it would be impossible for county to balance this) what benefits is there for an economy shrinking?
        
        As a general rule i agree 'growth' disproportional benefits wealthy more then the poor but it benefits both overall. But a 'shrinking' economy affects the poor more then it affects the rich.
        
        Rich/Wealthy people are far less likely to be unemployed during a down turn, far less likely to default on payments for home loans and other debt opposed to the poor. The reason so much stimulus/support was given during last year lockdown was to stop people falling into poverty and stop renters being homeless.
        
        How anyone can think economy growth is a bad thing is beyond me? esp when you consider the alternative.
    - Krankite on 13/09/2021 - 07:17
      
      +1
      
      Trying to justify negative gearing as a rental support program is ridiculous if you want to keep rental prices affordable than have the money administered via the renters as an increase to rent assistance or a tax break for renter's, that way at least when people exploit the system money will be going to the less well off rather than people already in the top tax bracket.
      
      Also if you think being an average resident in a tax haven country is a great plan I think you need to dig a bit deeper. Personally I'm happy to pay a bit more tax so that I know there is a solid safety net for my family and not having to lock my doors at a red light.
      - MrFunSocks on 13/09/2021 - 07:53
        
        +3
        
        @Krankite: Negative gearing means you still lose money. No one gets richer off negative gearing. There’s not really any exploiting it.
        
        I swear most people that are angry about negative gearing don’t understand how tax deductions work either. They’re likely the people that think if you can claim a $500 item on tax you get $500 back.
        
        Trying2SaveABuck on 13/09/2021 - 08:28
        
        +3
        
        @MrFunSocks: I was about to comment that exact thing - Negative gearing means you are losing money.
        
        The media seem to never say this so the sheep seem to think it is a way to get rich?
        
        As for giving 'tax' money to renters there already is rent assistance people on low incomes can claim….
        
        MrFunSocks on 13/09/2021 - 09:36
        
        +3
        
        @Trying2SaveABuck: Exactly. Given the choice between having a negative or positive geared house, literally no one would choose negative geared. It's literally losing money vs making money. It's insane that somehow this isn't understood.
        
        Krankite on 13/09/2021 - 13:42
        
        @MrFunSocks: Negative gearing reduces your taxable income at 100c to the dollar and then assuming you qualify for the capital gains discount you only pay at 50c to the dollar. Essentially you are taking advantage of disposable income to reduce your future tax bill. Sensible people are angry about negative gearing because it artificially distorts the market leading to investors taking up a higher proportion of available property. It also leads to a situation were a large portion of the market is holding onto "loss making" assets with the promise of future gains so if prices do stop increasing or slowdown we will have a massive collapse.
        
        funnysht on 14/09/2021 - 08:36
        
        -1
        
        @Krankite: 100 c to the dollar?…no …
        
        MrFunSocks on 15/09/2021 - 12:22
        
        @Krankite: You're still losing money though. The longer it's negative geared for the more the value has to increase for you to break even. You also have to have the money to lose in the first place. It's not just some easy money making scheme. If you can't afford to lose $10k to claim $3k back in tax every year in the hopes that at some stage you'll make that $7k/year (for example) back then you'll be in a lot of trouble.

Negative Gearing and Capital Gains Tax Discount Should Be Abolished

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