If Negative Gearing was Scrapped!!!

In the last federal election I voted based upon what was going to be a best outcome for my family with the parental payment scheme. Guess what? They won. Guess what happened to that proposal???
Point being is winning votes is one thing, the government actually implementing is another. It's likely NG will end up in the government too hard basket.

 

If NG was scrapped..it would present a once in a lifetime opportunity...the demand reduction on housing would reverberate through the economy.

It will be another perfect storm for people to jump in like the GFC!

 

A once in a lifetime opportunity which would actually be the second such opportunity within a decade?

Reminds me of how some people interpret 1 in 100 year severe weather events.

 

Yer like the 1 in 100 year event we get at least twice a year in Melbourne.

 

Then properties will crash. Simple.

No wonder Labor always has the youth vote.

 

One could only imagine what would occur if Malcolm Turnbull ring fenced negative gearing to currently held property investments (and why not add a share portfolio in as well?), and taxed trusts like companies to reign in any recalcitrants (and Joe H is just a phone call away to provide any advice)....

Surely the govt could pick up a bit of extra coin with a bit of effort...

Of course, they will get belted like a red headed stepson (and I use this term as a colloquialism..) at the next election, but arent all of these pollies representing the greater good?

 

As expected, negative gearing is here to stay. Regardless of whether ALP or LNP wins the elections.

Here is Turnbull's possible solution;

 

Lobby your local politician. Negative gearing shouldn't be abolished outright. It will affect property prices, even if it doesn't affect you personally.

If argument is that negative gearing is abolished to take the heat out of speculation and make it fairer for home buyers........there are better ways.

In the US, negative gearing applies to PPOR and one investment property.

That is a fairer approach for everyone........if the political argument is for real.

Given the current environment, removing negative gearing for the majority is crazy.

 

Getting rid of negative gearing is good policy and a vote winner, people are sick of its distortions on the property market.

Turnbull is playing catch up to Shortens plan, but his 50K limit is ridiculously high. The coalition really are all over the place on this one, on one hand they say NG doesn't push up prices (they even said prices would rise without it...), and the other they say prices will "be smashed" without it ! Which is it fellas ?

Anyway its good to see this failed policy is finally in the mainstream and is on a highway to hell.

 

I hope they don't

 

NG has nothing to do with young people being able or not being able to buy a home.

Its a complete delusion. The way much of society spend their income, even if house prices went down 50% they would still say its impossible to buy a place.

Has nothing to do with NG. 40 years ago during my dads time it wasn't 'easy' to buy a place either. He worked his ass off and saved ,saved ,saved and bought his first place for $93,000. Many of his friends today are still renting.

 

The coalition's response to this is like they're actively trying to bring Labor back into the game at the next election. They were so far ahead but Turnbull is just doing everything he can to lose support and run the country poorly at the same time, I never thought I'd see the day where I'd honestly be closer to Labor policies than Liberal...

 

It has a ton to do with young people because it's a tax concession that largely they don't have access to and have no means to gain access to it in the near future, basically young people are expected to pay full taxes on their small incomes while the wealthy older generations reduce their taxes, keep the young out of home ownership and grow their wealth. It's yet another mechanism that is creating the vast wealth gaps based on age in this country because young people do not have the capital required to access it.

Gen Y is an increasingly aware and educated generation with a high level of media influence and immersion thanks to social media platforms. There is reason that there is strong groundswell support for the removal of generational wealth transfer systems such as super concessions, negative gearing, capital gains concessions and including houses in means tests, it's a generation that realises it receives next to none of the benefits and is increasingly being asked to foot the bill. It sure isn't the baby boomers who are reaping the benefits at the expense of all others through these systems that are pushing for the changes.

I highly doubt it will be this election but it wouldn't surprise me if in the next couple it becomes a massive factor in the results and that a party is going to win an election by appealing to Gen Y instead of the Boomers, it's certainly on the horizon.

 

@wogitalia We'll have to agree to disagree. I know first hand. I have helped quite a few young people on average incomes buy a place over the last 5 years. Once they changed their attitude and approach it became more than possible. Just have to agree to disagree on this mate.

 

It's not impossible but the disparity in access to negative gearing is massive, people under 35 gain about ~7% of the benefit on it while representing ~50% of the population. The more that information like that spreads and this whole negative gearing discussion is ensuring that it spreads, the more it will become a major issue for younger people and gain traction.

The numbers are similar to worse on capital gains concessions and super concessions.

When you have an entire generation who realise that a policy is specifically or indirectly designed for the benefit of other generations and is directly harming them you'll find they will rise up against it rather quickly, it just takes time for them to become aware of it and generation Y is rapidly moving from the "care free and enjoy life" to "getting ahead' part of life and as they move into that they will only become more politically involved.

Not arguing whether it's possible for some to buy an investment property and a home, it absolutely is, but they're not the norm, especially if they're on median or below incomes. They're the distinct minority as evidenced by only 7% of them actually benefiting from it.

 

But it wasn't the norm during my dad's time eigher .

The problem is how much of society view and use credit cards, spending habits, saving money, budgeting, expectations of buying a place, lifestyle etc.

Those issues (which I think are huge) wont suddenly go away once NG is gone. Even if prices come down 40-50%, many people will still not have the money to put a deposit down.

 

That's the best one I've heard all day.

 

@Leo2413 i have commented on this before but will again. I think the problem for these young people is an unwillingness to compromise on where exactly they want to live. I think a lot of them (not all) simply forgot the principle of "getting on the propery ladder".
I have seen this time and time again with my own friends who simply refuse to compromise on the suburb they desire to live in, even not willing to move a 7 minute drive down the freeway. The end result is always the same, property prices outgrow any kind of deposit they can save to the point there desired suburb is now so far out of reach that the one down the road now looks an attractive prospect, guess what though? They can't afford to even get in there anymore.

So now they are stuck renting and have given up on easy capital growth gains all due to a lack of willingness to purchase something slightly outside there desired area.

 

@albanga I agree. Its just the reality.

 

There will never be a perfectly 'fair' system. People who get caught up in the death trap of it having to always be 'fair', will go round and round in circles. Is it fair I have to pay for dole bludgers? No. Nor is it fair I have to pay for x,y and z. It just is. Cant change those things. Just have to learn how to go around, under, over and through them to achieve your goals. That's my belief.