https://www.abc.net.au/news/2023-06-09/australian-taxation-o…
Some very interesting reading including how many claims and how many investment homes in OZ.
ATO Data Shows 66 Millionaires Paid No Income Tax in 2020-21, with Eastern Sydney Postcodes Home to The Richest People
CurlCurl on 09/06/2023 - 12:54
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@orangetrain: That's stupid
That's like saying how do I start a small business..cut back on 1000 lattes?
Property investment is another investment business…@lilyesp: A better approach would be to invest the time wasted sitting in the cafe drinking 1000 lattes and get a job.
When a shoebox in unfashionable Sydney suburb cost a million dollars, playing the game could be like joining a pyramid scheme at the bottom. Then again it seems like the government is going to let in as many Indian migrants as required to keep property values as high as possible…
@AustriaBargain: Lol because Indian migrants buy property in eastern suburbs and inner city suburbs…
@AustriaBargain: You haven't seen anything yet.
In China you will still pay the million dollars but your income will be half or a quarter of that in Sydney.
In Switzerland the same shoebox would be $3m+
Sydney and Melbourne property will get a lot more expensive in the next 5-10 years.
Get in as soon as you can.
Don't hate the players, hate the game
Said the previous slave owners and gang rapists
Personally I believe that loan interest on the family home should be tax deductible. And I have no problem with investors claiming deductions but lets see some equity for a change.
Should you also pay tax on the market value of the rent you are saving by living in your own home?
Luls wut?
@EightImmortals: Your family home 'investment ' is returning you a benefit in the form of accommodation.
If the costs are tax deducible then that benefit should be taxable.
@trapper: Luls wut?
A lot of things you buy returns you a 'benefit', do you want to tax people who own cars because they don't have to pay to hire one as well?
Even if interest on the family home were deductible (in a fairer fantasy world of course) people still have to pay the principle loan and the interest. If someone is lucky enough to actually own their home then well done, no more rent and dodgy banksters for them. Of course they still have to pay RENT to the plantation owners in the form of land taxes and rates etc.I really have no idea why some people think the way they do.
The family home may be an incidental investment but it is primarily a place to live. An investment house is primarily to increase wealth so should be subject to the same gains/loss rules as nay other investment.
A lot of things you buy returns you a 'benefit', do you want to tax people who own cars because they don't have to pay to hire one as well?
This was your idea to allow tax deductions for personal expenses, not mine.
If a car loan was tax deductible then the benefit would have to be taxable. You can't just deduct the costs and not account for the benefits.
@trapper: How about you read what I posted again.
"This was your idea to allow tax deductions for personal expenses"
THAT IS NOT WHAT I SAID.
I said it would be a good idea that the interest on the mortgage for the family home should be tax deductible. I still think that's a good idea, and while I would welcome any measures that reduced our taxation burden vis-a-vis the amount of government wastage that goes on allowing 'deductions for personal expenses' was not the argument I was making.
@EightImmortals: The family home is a personal expense though.
If we treat it instead as an investment and allow the costs to be tax deductible, then the benefits must also be taxable.
To do anything else would be a massive tax loophole -> that the rich would primarily benefit from!
@trapper: You are not allowing all costs to be tax deductible, just the interest on the loan. ALL homeowners would benefit not just 'the rich'. But lets face it, there is way too much socialist interest in the political class these days to allow people anywhere near owning private property.
@EightImmortals: The rich will have a much larger mortgage on a much larger house… and now you want to make that tax deductible.
there is way too much socialist interest in the political class these days to allow people anywhere near owning private property.
And yet you think it would be a good idea that interest rates on owner occupied residents be tax deductible, therefore 'socialising' the cost of mortgage interest throughout society.
Let me know when you're next socialist anti-socialist group meeting is, should be a hoot.
@SBOB: I see you don't understand socialism either.
How is allowing people to keep more of their money and to get ahead in life 'socialism'?
@trapper: The family home is not an investment it is a liability.
No income but a lot of costs associated with the maintenance.
Capital appreciation is useless if you need a place to live.@drfuzzy: Why do you think people buy them then. Just to have this huge liability and all these costs associated with the maintenance?
Maybe there is also some kind of benefit to owning your own home? What could that be.
If that’s the case your principle home will be subject to capital gains tax when you sell.
If you pay capital gain tax on PPOR, then it is a fair game.
I have no problem with this, however, given you have deducted loan interest for your PPOR, you should no longer quality for CGT exemption upon sale or transfer of that PPOR.
Can't have it both ways, if you deduct, you pay CGT.
Why?
Interest is not capital and therefore any gains you make on the FAMILY home should not be assessable by the kleptocrats.
If your house cost 100K, with interest you end up paying around 300k (last time I did the sums using whatever the interest rate was at the time), so then if you sell the house 20 years later for 300K you have made $0 profit. However I'm pretty sure the ATO doesn't account for the interest you paid over the life of the loan as 'assessable'. So in the above case even though you made $0 profit the ATO would assess that you actually tripled your profit and would want to gouge you on the 200k you made on the capital value of the home over that time.
If the interest component were deductable, like any other deductions it would simply go to reduce your taxable income for the year and would not be a 1:1 refund of the interest you paid therefore there is no need, either technically nor morally to hassle people over their PPOR's.
Thank god for their multiple loss making properties that they get to hoard!
"But i'm doing everyone a favour by losing my own money and writing it off against tax"
No you're losing money on a loss-making asset and refuse to accept it and offload it increasing supply, so you get the taxpayer to pick up the bill.
Or just pay your accountant millions of dollars to write off
Or set up a foundation and dump a sh1t tonne of your money into it only for it to donate back into your business?rich people have lot more instruments available to them to avoid tax. also of course you would avoid tax if you can .. fix the system . CHEERS
The system is unlikely to change. Your best bet is to learn the system, and leverage it to your advantage.
How does one learn to get ahead? I don't have millions or cushy jobs for the major parties.
You do realise that big companies get insider knowledge and advice from accounting companies with thousands of lawyers and analysts? See PWC scandal.
That's not true, I'm sure they are very well practised at changing it for the worse.
If you are in the liable to pay tax bracket, then of course you can reduce the tax paid, if you arent in the pay tax bracket, then you have nothing to reduce.
They paid their accountants $200k so they don't have to pay income tax.
I assume their accountants pay income tax on that, so really it isn't paying no tax, it is just paying it through someone else.
Also if you want to be in a multi IP and part of the 6% just buy a few cheap studio apartments in Melbourne CBD for $300k. Cheap bragging rights at BBQ.
No, their accountants use other accountants that get them out of paying tax, and so on and so forth.
Aren't the 66 right here on ozb?
Not paying income tax is not a crime. It's just tax system incompetent.
Not paying income tax is
nota crime. FTFY
Tax avoidance is a crime.
Tax minimization is not a crime, but is far more available to the wealthy.Well the people who pinch your money say it is a crime so I guess it must be. :)
Some of them probably attended the ATO party and enjoying taxpayer funded canapes.
so 66 people who have a million dollar houses and receive the pension only, as they are between 80 and 90 years old, thus have no income
are they meant to pay tax?
story is stupid
so 66 people who have a million dollar houses and receive the pension only, as they are between 80 and 90 years old, thus have no income
What?!
The 66 people received over $1million income with the average of $14.5 million income.
Houses are not income.
Some of them could well be receiving the pension as well. It would be nice to know. (I suspect many do; because if they pay $219,000ea on average to minimise tax then most likely they are paying to minimise deemed income and assets too).
going purely off the title that refers to them as "millionaires", no mention of income in title
anyway if the 66 in the article received more than 1 mill in income they would pay tax. they obviously had legit expenses to reduce it essentially meaning they had no income. If i run a laundromat and earn 11 million in revenue but spent 12 million of repairs and wages, then I did not earn 11 million dollars. This is more likely the true facts underneath not disclosed in story
"Houses are not income." <— refer to the last 4 words of my first sentence.
67 of them are on OzBargain
Here we go again, just the usual clickbait beat up.
Yes, these people had gross income of $1m+ … but then they had taxable income of zero … so guess what the entirely legitimate rate of tax is on zero income?
FMD.
Find My Dong?
ATO Data Shows 66 Millionaires Paid No Income Tax in 2020-21
Did they earn an income?
They might live in and own a million dollar house but have lost their job…
Did they earn an income?
Yes they did, it's the first line of the article.
Sixty-six people earned more than $1 million and paid no income tax in 2020-21
The house you live in is not income tax.
I don’t say it was.
People who read the news, don't need you to post links to it again.
People who don't, don't give a XXXX.
6 of them are teals and are in the parliament
Small change compared to how many Tax and royalty $$ are lost to the commonwealth (ie Australian people) by corporate tax evasion and minimization.
If the government were serious about going after tax dodgers and related cheats and leaners they would start by by blacklisting organization who use aggressive tax minimization from being suppliers to government.
Well let's see how they deal with PWC……
Still saying - its the mega through to obscenely rich - that need to be skimmed off the top ,
this would add billions to national treasuries and THEY would not feel it (Ok , Ok the greedy ones would) .
Most mere taxpayers in their pay and be-paid world , cannot comprehend the magnitude of this scale of wealth - that needs to happen first off ! .Only 66???? Wow, the rest of them really need to see a planner or accountant. These days a mill isnt much. Just about any home owner in Syd or Mel inner suburbs would qualify if they've had their home for a few years. And no, I'm not a millionaire, just saying millionaires are a dime a dozen these days.
Sixty-six people earned more than $1 million and paid no income tax in 2020-21
The house you live in is not income tax.
So you think these millionaires are flying under the radar and ATO doing nothing to them? I wish I can tag these 'news' as spam.
Stop reading news.com.au thatll fix it for you
Story/Source is an ABC link, that should have already made it obvious that it was going to be clickbait or spam.
I think it's fair to say the average Joe earning 60k a year cannot begin to comprehend the financial affairs of someone who earns a million a year so should just stfu.
Or the fact that, that someone, is probably a surgeon who studied medicine for a very long time with no pay and a massive HECS debt, and works 18hr shifts and saves people's lives on a daily basis.
I find quite a few people’s understanding of the tax system quite concerning.
Bold statements like putting money into a foundation and donating it back into a business? Wtf does that even mean?
Let’s look at the “I earn a million but pay no tax” example.
Taxable income= Assessable income less allowable deductions.
Let’s say this income was derived by dividends and trust distribution. They put $1m of assessable income on their tax return.
They then incur expenditure to earn that income. For clarity, you cannot make up deductions (nor would a reputable accountant suggest/endorse this). If there is no outgoing or incurrence, there is no deduction. This usually means you need to pay money for something/incur a liability to pay something.
Let’s use the example that the investment portfolio was funded by a loan. Interest payments should be deductible (the whole loan was used to buy shares/units etc). Let’s say this is $300k, this is an allowable deduction.
Let’s then say the taxpayer had prior year tax losses from a bad investment of $200k. This is applied as a deduction.
Let’s say the taxpayer then decided they didn’t want to give the ATO money (as many do) and donate the remaining $500k to a deductible gift recipient.
Assessable income = $1m
Allowable deductions = $1m
Taxable income = $0I know the donation thing probably riles alot of people up in thinking this is some dodgy strategy, however this is an additional cost to the taxpayer.
Should the taxpayer simply pay tax on the remaining taxable income of $500k, then they would pay tax of $200k (40% tax). They would walk away with $300k.
If they donate $500k to a deductible gift recipient, then they need to give $500k in cash (or property).
They receive $500k from their investment, then they pay $500k to the fund. They walk away with no further money here. The economic cost is $300k.
There is now $500k to be distributed in accordance with the very strict and regulated rules of the fund.
that's the list of suburb to go to buy coles discount gift card i guess :D … lol
ABC News and News Corp are the same run by Murdoch and his political stooges.
News Corp was sold to Disney over four years ago.
Murdoch sailed off into retirement a long time ago, too. Seems like a pretty out of date Boogeyman to be referencing.
Time to tax the churches, who really knows how much George Pell amassed while he was still in the church service.
Why would you think he didn't pay tax? Priests and ministers pay tax like everyone else does.
Churches are classed as charities and tax exempt.
We need to start taxing churches and religious organisations to be able to afford the $368 AUKUS subs deal started by the pro-US LNP, we longer have universal free healthcare (free bulkbilling GPs for all Aussies) as it stands.
Greenwashing "charities" and NFP's are by far the bigger problem target that needs tackling first. The religious groups are worth pennies on the dollar compared to those billionaire-backed money laundering op's.
Six of the people listed on this group of 66 are Teal members of parliament backed by those groups. They are the only elected members in the group of 66 too.
Six of the people listed on this group of 66 are Teal members of parliament
This linked/articled somewhere that shows/references 6 of these people are "teal" parliament members? (Teal or independent, I don't mind.. I cant seem to find a list that shows this)
@SBOB: The ABC initially published their names then edited the story and removed them, along with any reference to them.
@infinite: surely any other publication, anywhere, not as biased and corrupt as the ABC, could back up your claim though?
@infinite: so…nothing to back up your "claim".. Absolutely shocked i tells you :)
as if any right wing media publication wouldnt have jumped on the chance to report that, but somehow only the ABC reported it, but redacted it, and no other media agency anywhere managed to grab that info and republish it, but you managed to read it and re-quote it here as 'fact'.
Seems about right@SBOB: Have you actually gone looking for the info yet, or are you just having a tantrum about it? Because neither of those things I can help you with.
@infinite: As I said earlier Icant seem to find a list that shows this
You could keep deflecting. Im genuinely curious to see such a list but can find no reference to any people on such list on any form of media source that my search skills can uncover.
I also genuinely believe you didn't see it in the ABC article, it was never published,and you're repeating talking points from whatever social media you read that 'fact' from.
But hey, a critical thinker like yourself would surely have decent independent media sources that show how corrupt and tax avoiding those independent ministers are, or you could just keep deflecting when someone questions you.
@SBOB: I didn't read it anywhere else because the clickbait article was from the ABC. No one else has covered it because it's not a story and it's not news. I don't know what you want me to do about the ABC having ABC standards of publishing and doing typical ABC things like having no basic standards of journalism.
You can believe what ever you want, I'm not the only person here who commented on the story initially listing 6 elected Teal rep's. The fact that the ABC edited their story and removed them is not on me. Take that up with the ABC. That sort of shoddy "journalism" and ghost-editing of the turd level stories they publish has them being constantly criticized by all sides, their own audience and even parliament. None of that is my problem.
Time to tax wealth, not income
yeh these articles Click Bait.
there are legitimate reasons why they pay no tax. they are not breaking the law.
the ones that are actually breaking the law and not paying their tax wont even get captured in the data.. lol
[insert prejudice here]
I would love to see some form of a flat inalienable tax on total income. Just like 2 or 3 % you can't deduct away so there's no way to avoid contributing. Obviously adjust the current rates to account and have the tax free threshold apply.
Water is wet also.
Water is wet
But is water really 'wet'?
I'd like to see some of these examples to how they can deduct so much with their high income. I'm to naive to understand how the more you earn means the more you can apparently claim on tax?
It's easy to understand Sendthegoods how you can earn more and deduct more. The example above was a good one. Borrow $100M at 10% interest and buy shares. The dividends are $1M, the deductible interest is $10M, you end up paying no tax today, but you will one day pay tax if the share increase in value when you sell them.
Someone please share their accountants contact details. Thanks! :)
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@xavster: Crab mentality is to push others down as they start to succeed.
Mainly due to jealously.