If Negative Gearing was Scrapped!!!

Stop them growing their wealth and they might have to spend all your inheritance instead...

 

Azazel, somewhat ironically it looks like Clive Palmer may experience some of the "greater good" in terms of:-

http://www.smh.com.au/business/avia...old-to-recoup-26-million-20160223-gn1hg2.html

Imagine how great he will feel after a few weeks commuting on a pushy... (not to mention the huge influx to PUP of the cyclist vote...

 

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.

And no doubt when this younger generation grows older they will be screaming FOR negative gearing.

 

Especially if they start with an IP, or get one early on.
Education I suppose. Some choose to think it's all too hard.

 

The Shorten proposal is to retain NG on properties that currently have it (grandfathering) and permit NG for new dwellings. These are two market distortions. If people really are sick of its distortions on the property market they would not support the Shorten proposal. It is not a good policy and a not a vote winner.

>> Turnbull is playing catch up to Shortens plan, but his 50K limit is ridiculously high.
Agree 50K is very high. A cap is fairer and less market distortions than the Shorten proposal but the level of 50K is unrealistic. I was thinking at 30K max.

>>Anyway its good to see this failed policy is finally in the mainstream and is on a highway to hell.
Funny, it seems popular to me. That doesn't indicate it is a failed policy I agree it needs to be capped or scrapped but it doesn't seem like either side is really that serious about capping or scrapping.

 

Agree and I also know several people in their 20's and early 30's who own two or three properties via NG but rent.

 

I've noticed that so many people who I consider to be successful, at least financially... they all follow a certain and quite similar philosophical path, while the others follow also a certain philosophical path which leads to vastly different outcomes. It's so consistent.


Just my opinion.

 

That's me. I spent ages tied down by a $500k mortgage and with little to no equity made no inroads. Sold up and rent now and can access over $1m in debt which quickly increased with increasing equity.

 

Lols...

 

Is the 50k cap that Turnbull proposes, 50k of deductions or 50k net loss?

 

Is it Monday or Thursday?

 

Thanks for that contribution. Despite your lack of any credible evidence, I totally believe you.

 

50k net loss supposedly. This seems quite high for an individual. I'm sure I wouldn't be able to lose $50k a year for too long

 

It would be unfair to put a cap on deductions. This would hurt those positivly geared as well b

 

If a particular path or belief system works well for someone and is getting them the results they want, then that's fantastic. No need to adjust anything.

 

Getting rid of NG (assuming the govt is doing it to collect more taxes) will be a self-destructive prophecy like many other policies that Australian government has adopted.

The short-term effects are almost unknown but the long-term effects are that the demand on rental housing will increase significantly.

The interest rates are not going to stay where they are now and the only way they are going to go from here is up. If the government scraps negative gearing, that means that the number of investment properties available will be marginally lower than the demand for them. This will in turn mean rents will be marginally higher and a bigger portion of population will not be able to afford them.

The main effect (and this is how our government will eventually shoot itself in the foot) is that we will need to adopt a very similar policy to europe and therefore create far more housing commission properties to house people who cannot afford the now very high rents. This will cost the government far more than the taxes they can collect by getting rid of NG.

I believe getting rid of NG is another way of making the rich richer and the poor poorer. I can't see it in any other way.

 

Removing it altogether doesn't make sense.
If they capped it, at least they're seen to be doing something - while not really doing anything.
I wouldn't be against making it so you can't claim the difference between rent and mortgage repayments as a loss, stop the speculators who are really taking the wee wee and ruining it for everyone.

 

Leave us alone

 

The more I think about it, it depends how they calculate it, what they include.

For example I could have 5-7 new build properties all positively geared pre depreciation, yet after depreciation could be pretty close to a $50k negative (not cash) position.

Why should I be penalised with a cap. Depreciation is a right every asset is given. I am not speculating with massive rental loses to interest cost.

Any cap in my opinion should be per property and interest based only. I.e each property can claim a maximum interest to rental loss of $5-7.5k p.a.

Of course others will disagree as this works for me not everyone else. It's a selfish suggestion.

That said it would reduce the speculation on low rental yielding inner suburban locations and would encourage investment in new builds in growth areas as yields are higher. This would have the same effect of driving building without removing completely the ability to deduct short term vacancy loss from neutrally geared properties.

So many ways to skin a cat.