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

                • Krankite on 16/09/2021 - 08:05

                  @MrFunSocks: The fact that you have to have the money to lose in the first place, and the fact that it only really makes sense if you are in the top tax bracket are precisely what makes it a regressive policy. It doesn't make sense to continue a policy that only really helps people who didn't need help in the first place, much better to streamline the tax system for the benefit of everyone.

      • spal on 11/09/2021 - 23:44

        There is no longer tax deduction for land banking arrangements. Expenses are deductible only from when a property first becomes available for renting, and it is deductible only if it is used for income producing purposes.

        • morse on 12/09/2021 - 03:15
          +3

          Yes, negative gearing really isn’t the huge saving some make out. But people still do what I consider to be land banking and use negative gearing. ie The main purpose of the property purchase is to hold the land to later sell or develop. The existing dwelling is rented out essentially to cover costs of holding the site/pay interest, perhaps some principal, and may be negatively geared through adding improvements to rent it out. I’m considering doing something like this myself but haven’t fully explored the finance and tax implications. I guess my point is you might get that tax saving in year one. But in 5-10years is when you make the real money. It makes it more affordable for the investor to take on the project. I’d be interested to hear if you think there are any flaws to this strategy?

          • spal on 12/09/2021 - 16:21

            @morse: This is my strategy too. Property is not a get rick quick asset class, because of the fixed costs of the transaction. One needs to hold for a long time for it to turn profit. On the other hand you buy where you can afford, hold it for long term and hope that it turns out in 20 years worst house on the best street. As you suggested that it would be rented out, so you receive the tax deductions too, which lowers the cost of holding.

          • funnysht on 14/09/2021 - 08:37

            @morse: then why else would anyone want to invest in property though….
            if shares never increased in their price..why would anyone buy shares

            • morse on 14/09/2021 - 14:14

              @funnysht: Yeah it generally goes up in price (most of the time). I think what is in question is whether the the gov should interfere in the market by effectively guaranteeing some of the risk through tax deductions/exemptions. This benefits me as an individual, whether it’s good for society and the economy is questionable. The rate of increase is pretty intense at the moment - but this is probably a combination of low interest rate and fomo more than negative gearing.

              Re shares, they go down in price. Dividends are the other consideration.

    • 0FoxGiven on 12/09/2021 - 06:41

      Oh hi Jon Snow!

    • dji1111111 on 12/09/2021 - 12:38

      Doesn't sound like you know too well either.
      Tax loss is different to real loss.
      On a cash basis, many investors will be net positive but could be reporting tax losses due to non cash deductions such as depreciation and capital works deductions

  • bobbified on 11/09/2021 - 22:12
    +4

    Negative gearing means that someone is 'losing' $1.00 to gain $0.30 to $0.40c.

    Those who don't agree with negative gearing seem to think it only involves the "gain $0.30 to $0.40c" bit.

    • JimmyF on 12/09/2021 - 00:08
      +4

      Those who don't agree with negative gearing seem to think it only involves the "gain $0.30 to $0.40c" bit.

      and there are those that seem to think this is all that is at play…….. Most of the time 'neg' gearing is a nice cream saving as part of covering holding costs while property 'booms'. They then turn around and sell it in 10 years time for double or more than they paid for it.

      If 'property' is so great, why do you need 'tax savings' to cover your losses?

      • bobbified on 12/09/2021 - 05:35
        +4

        If 'property' is so great, why do you need 'tax savings' to cover your losses?

        No different to any other investment where deductions are claimed for the 'expenses'. When the property is rented out, you still have to declare every cent you collect and it gets taxed as 'income'.

        They then turn around and sell it in 10 years time for double or more than they paid for it.

        Property is not a 'sure win' like you make it sound. You only hear about those who make a lot of money and don't often hear about those that go broke. Ask the people who bought in WA at high prices during the mining boom. What are their investments worth now?

        • JimmyF on 12/09/2021 - 09:30
          +2

          No different to any other investment where deductions are claimed for the 'expenses

          Let them claim expenses, but not interest…. That is the problem, people load up on debt as its a tax 'write off'.

          Ask the people who bought in WA at high prices during the mining boom. What are their investments worth now?

          Back above water now after years of claiming 'losses'.

          • bobbified on 12/09/2021 - 10:21
            +3

            @JimmyF:

            ..but not interest…. That is the problem, people load up on debt as its a tax 'write off'.

            It'll be stupid to load up on interest/debt just for a tax write-off. Like I said earlier, for every $1.00 they pay the bank in interest, they only get back $0.30-$0.40 back in tax. That is, they're actually losing $0.60-$0.70. Any amount they receive in rent also reduces the amount they can claim as a tax deduction.

            They do it as a gamble and hope that there's enough capital growth in the property to offset those interest losses (and more) later when they sell.

            • JimmyF on 12/09/2021 - 20:59

              @bobbified:

              It'll be stupid to load up on interest/debt just for a tax write-off. Like I said earlier, for every $1.00 they pay the bank in interest, they only get back $0.30-$0.40 back in tax.

              I'm aware, but that 30-40% tax saving, means someone who could only afford to pay out $1, can now in theory pay out $1.40 after the tax saving. aka allowing them to load up on more debt.

          • MrFunSocks on 13/09/2021 - 08:01

            @JimmyF: Why would people load up on debt just to just lose a little bit less thanks to negative gearing?

            Do you actually understand how negative gearing works? It means you’re losing money.

      • brendanm on 12/09/2021 - 15:15

        They then turn around and sell it in 10 years time for double or more than they paid for it.

        What if it halves after they've made a loss on it for those 10 years? Happened in WA with the mining boom.

        • JimmyF on 12/09/2021 - 15:36

          What if it halves after they've made a loss on it for those 10 years? Happened in WA with the mining boom.

          See comment above….. WA might have 'halved' but its now back above those levels again. Thanks to the property boom.

          Australian gov can't get us have a property crash, 'because'. But oddly its happened in lots of places overseas and the world carries on.

          • brendanm on 12/09/2021 - 15:51
            +1

            @JimmyF:

            See comment above….. WA might have 'halved' but its now back above those levels again. Thanks to the property boom.

            Yes, but not everyone can is does hold on, same with shares. Some people panic, or have to, sell at a loss.

            • JimmyF on 12/09/2021 - 21:02

              @brendanm: Buying a house is a investment, and just like shares, sometimes you win, sometimes you don't.

              It is a strange view we have in Australia that property must only EVER go up and doubling every 10 years.

      • MrFunSocks on 13/09/2021 - 07:58
        -2

        Do you understand how losses are claimed on tax by businesses?

        I’ve just moved in to a second house and am getting my first house ready to rent out. I’ll be claiming all the money I spend doing so as negative gearing, but it just means I’ll lose less money. I won’t profit from negative gearing.

        If they got rid of negative gearing then higher rental prices would be the result, not lower house prices. I wouldn’t sell my house if negative gearing didn’t exist, I’d simply charge more rent.

  • clearance fan on 11/09/2021 - 22:14
    +3

    @Jug123 & MS PAINT, I share my experience I thinks that's before you're born, with 2 incomes, we paid off our first home in 7 years, bought a block of land in 1987 housing boom in 1988, so good we bought 3 more properties, sold our 1st home gained about 200%, and built a better one. then came unforeseeable recession hit early 1990s, tenants moved out no rental income, interest rate @19%, properties prices dropped, buyers offered less than we bought, with mortgage can't sell and no rental income and outgoings expenses, very tough till nearly end of 1990 we just wanted to off load, we sold all off these burden properties, one with hugh loss, we offset this loss against the other CGTs. We sort of break even, a sign of relief. That's before this long lasting housing boom from 2000. I've been done that. I'm doing not too badly, I also like to see my fellows own their own homes, the investor don't really need NGs and CGT, if investors can't serve their mortgage shouldn't be in it, cut losses and get out and make their properties avail for sales, there're many people wanna buy.
    I'm very grateful that I went to college studied English and other courses for free, now I see my younger friends with students debts and pay rents its harder to save up for a deposit.

      • Hardlyworkin on 12/09/2021 - 00:30
        +11

        OPs English is easily understandable. Why does it need need to be perfect? Well other than to appease Ozbargain neggars perhaps?

        • RockyRaccoon on 12/09/2021 - 08:33
          -3

          Yes my bad, I read this initially, when making the comment, as being they studied English at University, like in a subject major vs studying to learn english as a second language.

          As such I agree it doesnt need to be perfect for Clearance Fan.

    • SF3 on 11/09/2021 - 23:04
      +9

      This sounds like “sour grapes”, disguised as altruism.

    • jug123 on 12/09/2021 - 19:04
      -1

      @clearance fan know where near before I was born. I remember the good ol days of 17% interest rates and losing on properties while buying and selling everytime I moved for work as the banks werent so liberal with their money. Ive now been investing for 30 yrs for the sole purpose or retiring very soon with a steady income that I'll pay tax on and have been on a few for a number of yrs as half the properties I own are now postively geared

  • rektrading on 11/09/2021 - 22:23
    +17

    Boomer hoarding 3 houses and then whinge about Millennials not being able to enter the market. This must be a troll night.

    • robbyjones on 12/09/2021 - 16:38
      -1

      Do you think if property investors sold their property millennials would suddenly be able to afford to buy their own home? What about the people who are renting those investment properties, where do they live now? I've never heard any "boomer" whinge about a millennial not being able to afford a property, they really don't care what they do with their money and how they live their life. Most "boomers" who have investment properties are doing it to have money in their retirement years and therefore are not a burden on the community to live their life in later years. Swings and roundabouts.

    • dji1111111 on 12/09/2021 - 20:41
      -1

      Haha let's be clear. They "own", they are not "hoarding"
      Your post just reeks of sour grapes.
      They didn't steal, commit crime or do anything unethical. They were just born before it became harder to buy a house and that makes them bad?
      Tall poppy syndrome much?

  • mskeggs on 11/09/2021 - 22:52
    +28

    Negative gearing to offset losses from investments against wage income is indeed a rort, and it penalises wage earners who must pay a higher tax overall to make up for the offsets from negative gearing.

    CGT discounts similarly penalise wage income earners who must pay tax on their income with no ‘discount’ like those that apply to investors for holding an asset for 12 months.

    It is extremely hard to make a coherent argument for CGT discount (possibly something related to new entrepreneurs, but even then…)

    There doesn’t seem to be any argument for negative gearing. The usual talking points suggest it is necessary to drive rental housing, but it has clearly been a factor in driving up house prices to the detriment of society.

    Both arrangements penalise wage earners to the benefit of investors. Why shouldn’t it be an equal playing field?

    • Delilahgetsaround on 12/09/2021 - 08:31
      +2

      "Both arrangements penalise wage earners to the benefit of investors. Why shouldn’t it be an equal playing field?"

      A lot of wage earning workers are investor's. I think as soon as people hear the words investment or landlord they assume it's some big invester buying whole towns.

      • mskeggs on 12/09/2021 - 08:48
        +5

        I understand that, but I object to the income I earn from being fortunate enough to to have some savings being taxed beneficially compared to what I get from hard work.
        It should be a level playing field, at least.

    • Antikythera on 12/09/2021 - 12:20

      in a broader system I think the CGT discount can give stability to markets by encouraging investment over speculation.

      I'm not sure housing should be the only market that cannot benefit from CGT discounts. though I think argument could be made for this on the basis that housing is a fundamental need and society may benefit from it not being treated as an investment.

      perhaps CGT discount time should be greatly increased for housing. like 30 years. because unlike the share market, speculation in the housing market naturally takes you into CGT discount one year holding time anyhow.

      • mskeggs on 12/09/2021 - 18:31

        The same incentives for stability could be achieved by an extra tax on asset “flipping”. There is little argument to give passive gain a tax break.

        The vast majority of Aussies get the bulk of their income from income, the CGT discount has distorted investment toward capital gain (not income producing business) and it is garbage.

        If you want to incentivise a particular activity like home building for rent, target the incentive, and withdraw it when no longer needed, don’t make it a 20 year element of the tax system to distort the free market.

    • sangohan on 12/09/2021 - 16:19

      Why shouldn’t it be an equal playing field?

      the money that is used to purchase investment is already taxed - after all, where would that money come from in the first place, except as some sort of income earned?

      The CGT discount is incentive for both holding onto investment, as well as incentive to invest in the first place. By making the investment have a guaranteed 50% tax reduction, a lower rate of return becomes acceptable, and thus, lower risk, and thus encourage more investments. More investments mean more productivity, and a wealthier society.

      • mskeggs on 12/09/2021 - 18:25
        +2

        Um…nobody in this discussion is talking about taxes on existing capital- not sure why you would open with that unless you don’t understand tax, or are arguing in bad faith.
        We are discussing the income either earned from work/labour, or the income accrued from passive investment gains.

        Surely the incentive for an investment should be profit - why would you also deserve a further tax break? Why do you feel investment as an act results in further prosperity?
        There is certainly a class of entrepreneurship that results in additional prosperity, but there is also a zero sum type of investment that is equally rewarded with lower tax in CGT that does nothing for prosperity.

        Are your kids or grandkids better off if their first home is costlier, or cheaper? Undoubtedly they benefit from cheaper houses and other essentials.
        I think there is an extremely strong argument to tax gains from necessities like housing at least as highly as other income.

        Marty people have suggested lower taxes drive growth investment - I can certainly see they drive asset appreciation, but I’d love to see you show evidence they drive growth.
        For example, did GDP kick up to a higher rate after the CGT discount was introduced?

        • tomfool on 14/09/2021 - 09:58
          +1

          There has to either be indexation of CGT discount on capital gain for longer term investments.

          Take an investment of 100k over 10 years with a compounded return of 5% and inflation of 2%

          0 $100,000.00 $100,000.00
          1 $105,000.00 $102,000.00
          2 $110,250.00 $104,040.00
          3 $115,762.50 $106,120.80
          4 $121,550.63 $108,243.22
          5 $127,628.16 $110,408.08
          6 $134,009.56 $112,616.24
          7 $140,710.04 $114,868.57
          8 $147,745.54 $117,165.94
          9 $155,132.82 $119,509.26
          10 $162,889.46 $121,899.44

          You sell after 10 years and pay 30% tax on your capital gain of 63k, you end up with $144022 but inflation adjusted your return is only $22123 and that is 22k in 10 years time buying power.

  • thatonethere on 11/09/2021 - 23:14
    +1

    Unfortunately there is a massive industry and voting base reliant on this tax relief so removing it is very very difficult without political impact. Superficially it seems easy and your sentences and bold almost flippant but it is not easy.

    People will get hurt they vote politicians react. Democracy…

    • Vote for Pedro on 12/09/2021 - 10:33
      +1

      Middle and upper class welfare is now so entrenched that it will be a brave pollie who tries to change it.

      It’s just easier to slam ‘dole bludgers’ (from a political point of view) who represent a tiny fraction of our overall welfare payments.

  • p1 ama on 11/09/2021 - 23:33
    +4

    I support abolishing negative gearing because it's just nonsense. However, let's not kid ourselves that this will actually do anything. Investors are a minority in the property market and the number who are actively negatively gearing to the degree that this is actually going to change their investment decisions are lean to say the least.

    This is just political malarkey that ain't gonna do shit. House prices are going to continue being driven up so long as people still dream of living in 4BR houses on 700m^2+ blocks 10km from the city.

  • clearance fan on 11/09/2021 - 23:38
    +4

    RockyRaccoon I studied English and others courses that TAFEme learning and advance my career path, no from daddy's pocket, very grateful for the free education @ TAFE not uni.
    retrading yes very ambitious at my younger days, I did hoarding properties, but I sold them all, now I'm still seeking to buy only one as my principle residence, our generation worked hard and save as its important buy our own home, not to whinge but I'd like to see policies changes that help my Millennials friends buying their own home too.
    See Singapore govt. control foreigners to buy their landed houses and affordable HDB only allow one per household, and Singapore get richer by buying Australian properties, we should control foreigners buy up our prime real estates.

    • RockyRaccoon on 12/09/2021 - 08:56

      Yes I understand that now, I read the comment in your earlier post as studying English at tertiary level vs studying English as a second language.

    • Porker on 12/09/2021 - 09:04

      If indeed you were able to acquire properties on your own, the 'help' you can provide to your friends then is to guide them on how it was achieved. Whinging about how they'll never achieve or get what you had is no help, nor will trying to incite an opinion about the system to justify their situation. There is more to someone not being able to buy a house than simply 'investors' (and negative gearing and/or Capital Gains Tax).

      One thing that is rarely, if ever, taught in any education system is how to make money beyond job salary.

  • MrThing on 11/09/2021 - 23:56

    OPs opinion is unpopular

    just ask labor how it worked for them.

    we know liberal voters like it

    so.. that like 60 - 70% of the voting population.

    I guess people who dont like it are a loud vocal minority then??

    • SBOB on 12/09/2021 - 07:25
      +3

      we know liberal voters like it
      so.. that like 60 - 70% of the voting population

      That % would contrast with voting breakdowns at the national elections

    • Vote for Pedro on 12/09/2021 - 10:31
      +5

      The two party preferred vote was 51.53% versus 48.47% at the 2019 election.

      I guess facts don’t matter any more.

  • USER DC on 12/09/2021 - 00:29

    I agree, So many people like me can not get their first home, because of rocket high house prices, only because of these long term property owners, who are making huge profits on renting etc.

    • Trying2SaveABuck on 12/09/2021 - 00:34
      +3

      It isnt a divine right to own a home if you cant afford to buy where you want then buy where you can afford….

      There is loads of affordable housing in Australia

      • Vote for Pedro on 12/09/2021 - 10:28
        +3

        Oh what a very clever speaking point from the property investment lobby.

        Yes, go buy a property in wagga wagga its affordable.

        Who gives a flying (profanity) if theres no work there?

        • p1 ama on 12/09/2021 - 15:28
          +1

          I'm curious to know what exactly you would define as "affordable"?

          • brendanm on 12/09/2021 - 16:03
            +3

            @p1 ama:

            I'm curious to know what exactly you would define as "affordable"?

            Anywhere they don't want to live. Can buy a 4 bed house with a pool, 700m2 block, driving distance to gold coast and Brisbane, for under $400k. Plenty of jobs available.

            • Vote for Pedro on 12/09/2021 - 16:38

              @brendanm: I’d do that. No issue. Don’t understand your attitude. Do you have a link to an example? I might invest lol.

              • brendanm on 12/09/2021 - 17:34
                +2

                @Vote for Pedro:

                I’d do that. No issue. Don’t understand your attitude.

                My attitude comes from 99% of the whingers on here who complain they can't buy a first home thats $400k, 2 minutes from the melbourne, with 8 bedrooms and 6 bathrooms on a half acre lot.

                Do you have a link to an example?

                23 Yorkshire Crescent, Mount Warren Park, Qld 4207 https://www.realestate.com.au/property-house-qld-mount+warre…

                Plenty similar around, that one is under offer now, wasn't yesterday.

                • Vote for Pedro on 12/09/2021 - 18:18

                  @brendanm: Ooh geez, logan. Top notch. Quality right there. But yeah, is what it is to get into the market. Definitely wouldn’t live there or raise a family to be quite frank.

                  Id be driving coz public transport is more than double in time.

                  • brendanm on 12/09/2021 - 18:44
                    +1

                    @Vote for Pedro: Haha, you have no idea, there are places in logan that are nice, and places that you wouldn't walk through at night (Woodridge, Inala). Mt warren park is actually quite alright, old suburb, lots of families, and a few of the streets there have a massive Christmas light show, carolling etc every year, it's one of the biggest in the region. I don't live there, so have no reason to talk it up. Though you've sure shown exactly why people can't get into the market, nothing is good enough for them.

                    • Vote for Pedro on 12/09/2021 - 19:38

                      @brendanm: No, you misunderstand. I did agree that it is what it is to get into the market. Just because I didn’t need to doesn’t mean I wouldn’t if i had to.

                      I bought where i could afford. It’s a long commute and isn’t flash but it was a balancing act.

                      What people do misunderstand is that some people will struggle to even get a deposit for that property. Rent, bills, kids, uncertainty in the labour market and ever increasing casualisation/uberfication of the workforce makes it really hard for those on the lower ends of the pay scale.

                      What’s the point if we’re not looking after our society.

                      • brendanm on 13/09/2021 - 06:47
                        +1

                        @Vote for Pedro:

                        Just because I didn’t need to doesn’t mean I wouldn’t if i had to.

                        Thats why you have a house, and the whingers on here don't.

                        What people do misunderstand is that some people will struggle to even get a deposit for that property. Rent, bills, kids, uncertainty in the labour market and ever increasing casualisation/uberfication of the workforce makes it really hard for those on the lower ends of the pay scale

                        This has always been a thing though. It is getting worse, but that's globalisation for you.

                        What’s the point if we’re not looking after our society.

                        Dropping negative gearing won't do much for house prices. We allow too much foreign investment rather than letting Australians buy houses. We import unskilled people who will work any job at any price, which drives down employees bargaining power in the workforce.

                        • Vote for Pedro on 13/09/2021 - 09:19

                          @brendanm: Yes (sort of), yes and yes (mostly).

                          We need to prioritise people over profits and while globalisation brings many benefits and great wealth for many of us, we need to make sure no one is left behind.

                          Many are having a go but aren’t getting a go.

                          • brendanm on 13/09/2021 - 10:23

                            @Vote for Pedro:

                            We need to prioritise people over profits

                            That's never going to happen though, it's human nature, and has been that way forever.

                            • Vote for Pedro on 13/09/2021 - 10:47

                              @brendanm: It’s never going to happen for some people. There are those that believe in people over profit and they, including me, will continue to fight for it.

                              • brendanm on 13/09/2021 - 12:44

                                @Vote for Pedro: The problem with that is, as long as there is one person who cares about profit over people, they will take advantage of all the rest.

                                • Vote for Pedro on 13/09/2021 - 14:49
                                  +1

                                  @brendanm: Well, we could sit on our arse and do nothing and care about nothing. I believe any change is better than status quo or the lean towards extreme capitalism.

                                  As you know, the extremes of either end of the spectrum are the same crap. Power and wealth concentrated with the few.

                  • cadwalader on 16/09/2021 - 01:01

                    @Vote for Pedro:

                    Definitely wouldn’t live there or raise a family to be quite frank.

                    Well, some people will need to decide if they prefer to own a house or to live in a popular area.

                    • Vote for Pedro on 16/09/2021 - 08:21

                      @cadwalader: You have an issue with context don’t you.

                      That was specific to ME. I definitely wouldn’t live there because I am one of the lucky ones and could afford better. However if i had to, I would.

                      But make no mistake, that is not how you resolve inequality and it’s not the only solution.

                      Driving groups with the lower socio economic space into ghettos only further supports the us and them mentality. The richies are happy because the plebs are somewhere over there out of sight of their suburbs

          • Vote for Pedro on 12/09/2021 - 16:40

            @p1 ama: Why don’t you ask Trying2SaveABuck. He/she claimed it.

        • USER DC on 12/09/2021 - 19:38

          @Vote for Pedro
          exactly correct

    • brendanm on 12/09/2021 - 15:19
      -1

      You could buy a house, you just want to live in a fancy house in the perfect location, for a first home.

    • dji1111111 on 12/09/2021 - 20:46
      -1

      Spoken like someone with no idea. Most landlords are not making huge profit on rent. If you could do simple maths, you would know there's no huge profit to be had from renting out properties.

      Since when is it a crime to be holding onto appreciating assets? Just because you couldn't buy one? Omg… self entitlement in some people are just amazing. Most people didn't get to own properties because they had millions lying around waiting to be spent.

      • USER DC on 13/09/2021 - 01:23
        +1

        Most landlords are not making huge profit on rent.

        ?? Its almost a passive income like almost half of their monthly salary for 1 home. (i.e. after all the taxes, insurances etc.). If you don't believe me, have 2 or 3 house on rent, and you'll likely not need to work for living minimum standard.

        Of course it is not a crime to be holding onto appreciating assets, nor did I say its illegal, rather this thread is about how the wealth gap is so divided that middle class, and low income earners are just not able to get their first homes, when rich are making so many profits, and causing increasing property rates.

        • dji1111111 on 13/09/2021 - 07:27

          I don't need to believe you because I'm certainly not seeing a massive profit from renting out by the time I pay for rates, water, land tax, repairs and maintenance and agent fees.
          Yes I have been fortunate enough to see good capital gains but that is a risk I took when making the investment and are being rewarded. People talk as if it was such a sure thing to invest in property but that's all in hindsight. There's always been mixed opinions on whether we are in a bubble and whether it's a bad time to buy.

          Property owners and rich people are not necessarily one and the same. Plenty of everyday normal people own properties.

          Property prices are not being driven up by the "rich people". It's driven up by the endless money supply due to central banks around the world printing money!

          Wealth gap to some extent is inevitable. Do you expect everyone in the Olympics to get gold medal? No, they are rewarded different medals based on their performance which correlates with their natural talent and their training effort. Same in life, if you spent all your younger days just enjoying life while others did the hard yards, you generally can't expect to be as successful.

          It seems like everyone expects to be able to buy a house with backyard close to CBD as if that should be a basic human right.

  • Dack Smith on 12/09/2021 - 00:58

    When you said people power… did you mean the power of socialism and Karl Marx?

    Down with the rich, all must benefit and profit from society’s progress

    • orangetrain on 12/09/2021 - 10:30
      +2

      You're right! Privatise electricity, water and fire fighting! After all, these services are socialist!

      • JoBevo on 13/09/2021 - 12:10

        Don't forgot about those bloody toll roads.

        • orangetrain on 13/09/2021 - 12:59

          Oh my god, we can kill karl marx by having a toll for each LGA. Cant let socialists win with their stupid free roads.

  • Euphemistic on 12/09/2021 - 06:09

    We do need CGT. The rich make too much money buying and selling assets, they need to be taxed on it.

    • redfox1200 on 12/09/2021 - 08:02

      You can also make money buying and selling assets, if there was no cgt you can easily become a millionaire from stocks

    • Porker on 12/09/2021 - 08:51

      It's not only 'rich' that buy and sell assets. You have the ability to buy and sell assets too.

      • Euphemistic on 12/09/2021 - 12:30

        But the not-as-rich don’t make as much money from buying selling and typically still on a reasonable amount of tax compared to their overall income.

        The rich can make lots of money from it compared to their total income. No CGT means they’d pay a much smaller proportion of their income as tax.

        • RockyRaccoon on 12/09/2021 - 13:06

          And all who have bought property want it to go up.

          If we dont let anyone buy property, there's no way it can go up.

          Congratulations, dont complain, you are ahead of the rest.

          All you'll just have to worry about is that those who get allocated a house in a desired location, will give it up, should someone else desire it more.

          • Euphemistic on 12/09/2021 - 14:55

            @RockyRaccoon: I h s no problem in people earning from buying and selling assets. Just make sure it is taxed so everyone can benefit from healthcare, education etc.

        • USER DC on 13/09/2021 - 01:26

          Most rich dont actually pay much taxes compared to their net wealth anyway, REGARDLESS of CGT or not, rich would find ways of avoiding taxes (and yeah unfortunately this is totally legal), some riches even claim they made losses even though their net wealth went up.

        • redfox1200 on 13/09/2021 - 20:54

          People don't just magically become rich, everyone has to start somewhere, instead of complaining they don't pay their share, maybe tax advantage of the cgt discounts yourself

          • Euphemistic on 14/09/2021 - 05:47
            +1

            @redfox1200: have no problem with CGT or the discount. It’s a problem if CGT is removed.

    • sss333 on 12/09/2021 - 11:38
      +1

      I think OP means to get rid of the CGT 50% discount after 1 year or maybe the primary residence exemption.

      • Euphemistic on 12/09/2021 - 12:31
        +1

        Possibly, but it’s pretty poorly worded.

      • Bjingo on 17/09/2021 - 17:37
        +1

        At my old firm we would get quarterly tax training from CA ANZ to update us on new policies that were coming or were introduced. He started going off topic about things to fix the budget and the biggest one he spoke of was the main residence exemption. In 2015-2016 the main residence exemptions value was around 50 billion dollars and 50% of that going to the wealthiest 20% the wealthiest 10% account for 37% of that 50%. Which is kind of hectic, that's more than Medicare costs in a year.

  • Leiothrix on 12/09/2021 - 08:06
    +3

    OP can you please explain what you think negative gearing and CGT discounts are.

    The majority of people have no clue what negative gearing is, but they sure as hell have a strong opinion on it.

    • Vote for Pedro on 12/09/2021 - 10:26
      -2

      Probably you included

      • Leiothrix on 12/09/2021 - 11:07

        There was a thread about this a couple of days ago. Have a look in my post history if you really care, I'm not repeating myself.

      • PixelPaul on 12/09/2021 - 18:38

        and you

  • Tyrx on 12/09/2021 - 08:50

    The price of Australian property isn't really that abnormal - they are actually lower than most OECD countries. There are a few localised bubbles, but generally speaking property ownership isn't out of reach for most. The price increases in the last few years is similar to that of stocks too.

  • Mrgreenz on 12/09/2021 - 09:17
    +3

    Negative gearing should never have been implemented IMO, just doesn't make sense.

    • rektrading on 12/09/2021 - 09:31
      +1

      Paying taxes on investments that lose money doesn't make sense.

      • Mrgreenz on 12/09/2021 - 09:32
        +4

        Exactly, so dont promote investments that lose money.

        • Tleyx on 12/09/2021 - 16:11
          -2

          Most investments lose money initially and then are positively geared and pay tax later

  • Waltervp on 12/09/2021 - 09:37
    +1

    Guess what will happen when they take negative gearing away (let's see what happens in NZ), investors may sell homes and likely want to quickly spruce up and renovate and move current tenants out. More people on the street looking for rentals…. Some lucky young working people can then afford to buy first homes perhaps but homelessness will increase overall I predict.

    Tenant protection will keep rents down to affordable levels in the long run as that will guarantee rents only go up with CPI. Renting will become more common as people can feel secure in a rental and even do home improvements because they intend to stay longer. It also keeps housing prices down because investors won't pay so much when tenants are in a home paying old level rents… though empty homes may become more expensive it will overall reduce realestate values as the price discrepancy between occupied and unoccupied homes will never be too large and rents on occupied homes will not go up and down woth fads like covid driven sea changes for example.

    Vote 1 Wally :)

    • rektrading on 12/09/2021 - 10:08
      +1

      NYC rent control laws that are 73 years old hasn't stopped it from being a 💩 show.

      People should buy what they can afford and not what they want to own. The same goes for renters.

      Owning property is a fundamental human right, but owning real estate isn't. There is a difference between the two.

  • CoreJava on 12/09/2021 - 10:06
    -2

    Save up mate, don't just expect the policy to change to favour yourself. Are you on the dole?

    • Vote for Pedro on 12/09/2021 - 10:24
      +3

      Why should I be subsidising a loss making investment?

      It is insane you can offset business losses (the property) against an unrelated income stream (regular wage).

      • CoreJava on 12/09/2021 - 17:04

        Think about the person is a sole trader, his income to basically revenue - expense, just like you can claim on work expense like laundry, buying a computer for work, expense working from home. I cannot I.agine why people would ask such question, go and ask Google and think about investing in property yourself

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