Libs Rule Out Neg Gearing Changes

Turn-bull and Morrison just keep repeating the same old lies and myths surrounding negative gearing.

I will be voting Labor for the first time solely on this issue. Negative gearing is a failed policy, millions recognize this, there are a lot of votes available to those brave enough to reform it and cast their self interest aside.

 

...abolished, then quickly re-introduced by Labour under the Hawke/Keating government

 

Canberra Times reporting on Turnbull ruling out negative gearing changes

Scroll down towards the end and see the results of that poll... There's a clear winner on housing policy IMO

 

Well that's it then, the Canberra Times readers have spoken, all 1700 of them.

No need for a general election as Canberra represents a good cross section of the Australian community.

 

Yes that's exactly right

 

If anything one might expect Canberra to have a higher level of support for negative gearing than the rest of the country. Canberra has the highest wages in Australia and the stats show that use of negative gearing is skewed towards those on higher incomes. The figures also show 13% of ACT taxpayers were negatively geared in 2012/2013, compared with a national average of 10%.

Can you explain why you expect a higher level of support (than indicated by the poll) for negative gearing when only around 1 in 10 tax payers are using it?

Of course NG isn't the only policy to be considered by voters at the election, but it's looking to be a major point of contention between the major parties.

 

I can't explain anything from a small poll in a regional newspaper and neither can you.

The sample size is too small and it's not representative of all 150 electorates which make up all seats in the House of Representatives.
1.7 million people own investment properties and how they would vote in a federal election is difficult to know, some would be naturally Labor voters and others Coalition voters.

I would suggest that in locations where housing affordability is stretched this might be popular but the number of negatively geared properties in many cities over the last few years has fallen along with interest rates.

Labor is trying to appeal to young voters in Sydney and Melbourne, as for other demographics and cities I don't think its much of an issue personally.

 

Already getting sick of hearing "mum and dad investors"...

 

I did mention the poll, but actual usage of negative gearing by taxpayers is a similar % to the poll respondents who voted in favour of it (probably not a coincidence despite the small sample). So my question stands in it's own right without need for reference to the poll results. Do you think there is substantial support for keeping negative gearing when only a small subset of the population are using it? Is there some wider social benefit it provides that I'm missing? What % of Australians would you guesstimate support the Liberals position on this tax policy specifically?

 

As for the small sample size... SMH has the same poll with over 10,000 respondents. So far:

 

Yes. 10% are using it. How many have used it and how many intend to use it?

Does it need to have a social benefit?

I don't think most people give a coitus.

 

Of course it doesn't need to, but if it's not benefiting an individual personally and not benefiting society in a meaningful way, then what reason would those people have to take Liberal's side on the policy?

@HUGH72 expressed disbelief that the polling was a true indication of support for negative gearing, but I expect it's not far off the mark (probably < 20% of voters).

People can see the impact that high prices/lack of affordability is having and negative gearing has become the target of that anger. I think there is potential for negative gearing (& the housing affordability debate at large) to be a key topic and vote decider at the upcoming election.

 

I was going to say that I am surprised by the larger poll result but in a city where there is an affordability problem motivated and possibly frustrated respondents do not represent the all electorates.

I agree that NG has become a target of some people's anger, I along with many of the 1.7 million investors who own property have benefitted from this in the past. With SVRs below 5% it's mostly a non event currently, what annoys me is that this action is unfairly targeted at one asset class only and not all.

I don't think that Labor will win the election so this discussion is largely irrelevant

 

No one lives in a share portfolio. Property is treated differently to other assets in many ways (not just taxation) for good reason.

Agree, but it has become much tighter and if current trends continue it may be a coin flip by the time the election comes around.

 

Yet at the same time property is used as a cash cow via stamp duty and land tax by various state governments.

 

A good point. If a party decided to abolish the CGT discount, many investors who planned to sell or flip could well decide to alter their strategies and hold their properties instead, which leads to a loss of stamp duty revenue, which in turn would somewhat offset the revenue increase from abolishing NG.

 

Looks like there'll be a raft of libs voting Labor and labs voting Lib for the first time this time.

On the question of how do landlords raise rent if the market doesn't call for it: there are heaps of LLs who have not raised rents every year because they have easy-going tenants. These are the ones who'll put up the rents. And my guess is that there's more than 10% of LL's who could easily put up the rent and stll be at or below market.
I see this noise by Labor as selfish - people only care about their own children, even politicians. What about subsequent generations? What about all the people who do care about the values of their homes? A number higher than 10% of property investors don't you think?
At the end of the day, abolishing neg gearing most likely won't produce the desired results especially in this economic climate.
Better to teach your kids how to fish.

 

the mood? what, the mood of renters?

puhleeese. the average aussie has their nest egg in their home - there's no way they'd vote to tax it more.

 

No, the mood of those who think Australia has poor housing affordability.

Do you think it's only renters in the now 21,000+ strong vote on SMH for Labor's policy over Liberals?

Many home owners, including myself, agree changes to negative gearing are required as one step toward a reduction in the level of property market speculation.

How does negative gearing tax a home owner? Here's a tip for you, it doesn't.

 

Hot property: negative gearing and capital gains tax | Grattan Institute

According to a Grattan Institute report on NG and CGT, they found the following:

• In Australia negative gearing goes beyond broadly accepted principles for offsetting losses against gains. It diverts capital from more productive investments without greatly increasing housing supply.
• Changes to negative gearing and capital gains tax would save the Commonwealth Government about $5.3 billion a year
  
• Other taxes, which often drag more on the economy than a capital gains tax does, must be higher as a result
  
• Contrary to urban myth, rents won’t change much, nor will housing markets collapse. The effects on property prices would be small compared to factors such as interest rates and the supply of land
  
• The interaction of a fifty per cent capital gains tax (CGT) discount with negative gearing distorts investment decisions, makes housing markets more volatile and reduces home ownership. Like most tax concessions, these tax breaks largely benefit the wealthy.