If Negative Gearing was Scrapped!!!

I completely agree with, I have been following property investment for over 10 years and not one year has there been no mention of abolishing NG and it is always going to happen and feels like it might happen this year.

 

@ Albanga there is a secret hand shake everyone who wants NG needs to perform, it is in the constitution you just need to see the steps in there...

 

The tragic future consequences of repealing negative gearing...

Fears Negative Gearing Repeal Might Cost Family Their Fourth Home

 

Close, but no cigar.

"But I think we’ll have to give up the inner city studio the size of a disabled toilet we’re charging some student $400 a week rent for"​

Unlikely such an apartment would be negatively geared. Yes, I know it is satire but I feel this comment missed the mark.

 

Treasurer Scott Morison has taken a stand against the reforms, claiming that the reforms will hit lower and middle Australians the worst. “I mean, after using the negative gearing itself to reduce taxable income, and thus make the data incredibly and deliberately misleading in demonstrating how well off these people are, the majority benefiting have an income of $80,000 or less,” Morrison lamented on radio this morning.

I knew that most of the people using NG are M&D investors or the aussie battler but as Scott Morison says the majority of people have an income of less than $80,000.

Can a government really exclude a majority of $80,000 or less investors, remember less than 1% of investors own 5 or more properties.

 

Article is SBS satire Will, a **** take...

The majority benefiting from NG are not definitely not those on sub 80k PA.

 

Interest rates go up and down and rents increase inexorably with inflation and population growth. Once again showing that the market is not too concerned with the cost base of the investor.

 

Those who benefit from NG the most certainly are higher income earners, but by population, most would be on roughly average incomes.

I've written loans for a couple of doctors who get big large benefits from negative gearing. I've written loans for dozens of nurses who also get the benefits. 2-3 doctors vs 20-30 nurses.

The doctors possibly get as much benefit as the nurses combined, but as to the number of people who will be out of pocket, there's a lot more lower income earners and the changes will hurt their bottom line more than those with higher disposable incomes. The changes will hurt the lower income earners the most.

 

Supply is not diminished if an investor sells to an owner. Owners and renters are not mutually exclusive domains nor are residences. The only way supply is reduced is if the residence is demolished or uninhabited.

I would imagine that allowing NG only on new builds would increase supply considering that 93% of investment lending is currently for existing properties.

 

Thats because there are more nurses than doctors.

And the doctors would get far more back than the nurses for similar risk and outlay

 

So the rich get richer?

 

You''ll have to slightly elaborate on your thought process there. ....

 

Didn't read that properly, my bad
But please not let us encourage buying horrid apartments from greedy developers.

 

Yeah, I agree. I can see the scrapping of NG certainly acting as an incentive for more bloody generic glass balcony concrete monstrosites.

 

I live in Melbourne and work in the CBD and the way I came in today my wife dropped me in Southbank.
I was shaking my head walking in as there were 3 towers within my small area going up not to mention the countless more I was surrounded by! It is becoming a very cold place and is only getting worse. Let's not start on the docklands either.

 

I fully acknowledged that. My point was it will cause more pain to more people on lower incomes.

 

I understand this however population is increasing and demand for housing is still strong. so yes if someone upgrades there is now less rentals in the suburb where the investor left and now more supply in the place the buyer left. So the same amount of owners/sellers are there but have you accounted for the immigrants?

Where are the immigrants going to live? Developers will not be doing as much developments or they would just add this cost to the end user (ill wait for your developers don't dictate market prices comment).

Again do you want deprecation gone as well after all it is just another advantage an investor gets over the owner occ.

BTW do you think I use NG?

 

@Big Will I am debating the premise of the OP. What will be the effects. Im questioning various peoples premises if I dont think they hold up to facts or empirical evidence. Im very happy to be proven wrong. Im here to learn.

Yes population is increasing in most of our cities. Existing property whether occupied by an owner or tenant, whether from overseas or local doesnt change the supply of housing to pool of people looking somewhere to live ratio. Supply changes with new residences not the ownership status of existing properties.

Btw, I am not concerned about your tax situation..

 

Can you give an example of how people on lower income would receive more pain?

Same house, same costs, same rent, same interest rates.
Person A on salary of $80,000, Person B on salary of $200,000

 

Lower income earners I feel generally speaking have less disposable income to weather storms than higher income earners.

So all it means is the battler trying to get ahead is now forced to make decision whereas the high income earner can sit back and wait.

If you feel NG is going to be abolished good on you, PM me when it happens.