LNP to cap negative gearing claims.

$28k seems like an extraordinary amount for an individual to lose in a year. Perhaps people should be discouraged from losing that much?

 

I wonder if it will be a flat cap, or anything above a certain level is quarantined until a later date. As it's revenue raising instead of building a long term sustainable system, I'd imagine it's the former.

 

My guess would be flat cap.

 

wouldn't rent increase due to this

 

not in Perth. There is an oversupply of rental properties, very little demand and rental prices going down and down. A change in government tax policy won't put rents up.

 

Keep your powder dry, Perthguy, this sounds like some kind of opportunity some time in the future...

 

If any cap is introduced, it will be devastating for investors in NRAS scheme. This means effectively clawing back tax free incentive given to investors for participating in NRAS scheme. If this happens, i suspect that many people will widthdraw from NRAS participation. Investors will be vary of investing in government schemes in future.

I do have 3 NRAS properties and i will certainly consider removing them from NRAS.

 

The NRAS incentive is a tax offset which is a different thing to negative gearing.

But you are onto something in that NRAS are usually very negative geared at the same time.

You would think they would be smart enough to only apply new rules to new purchases though. With the boom over they don't have as much media support as they would have last year.

 

With how poor Perth investment properties are doing at the moment I bet there's people considering selling already. A change in tax rules might be the kick they need to take action.

Reduction in properties could lead to upward pressure on rents, dependant on severity.

 

Danw,

I am not worried about NRAS tax offset. When i considered NRAS investment, i considered that 20% less rental will be negatively geared so actual effect of rent discount is only 13% or so. That consideration will not be valid anymore if negative gearing is changed or some sort of ceiling is applied. So in a way, if thia goes ahead, many investors like me will be vary of future such government schemes.

 

Yep, I see your point. NRAS is already a borderline investment choice IMO and this would really kill it.

 

Which would only hurt NRAS tenants.

 

I would suggest being wary of government or any schemes (I don't like anything with that word).

The governments are all wishy washy, more so today, they do things on a whim according to the vocal minority a lot of times, they try and break things, they change/create legislation as if that is all they should be doing, people forget quickly how they meddle with things and chop and change.

Latest example from the NSW state, Uber, one week your getting fined and rego cancelled, the next your elevated to what seems to be at least on par with a fully regulated taxi system, they do this stuff all the time, it is very poor form, but example after example are there if you look at more than just what effects you at any one time.

Rely on them for anything at your peril.

 

Called it to the dollar!
Turnbull prefers the $20k cap

http://www.dailytelegraph.com.au/ne...s/news-story/a804309e9bd56c438c990dedb9e0ff46

 

Any info on LNP's stand on CGT??

 

Reduction of discount to 40% at a minimum to 25% at a maximum should be expected.

 

So basically make it look like he is taking action by targeting the top couple of percent which will do nothing to improve affordability. What a waste of time.

 

Does anyone know how depreciation is factored into NG? All my properties would be Neutral before depreciation but negative after.

 

Sure, it does nothing, but it's a start. Negative gearing is going to be reformed and curtailed, and that could be the first step towards its eventual abolition.

My opinion? I'd stop all interest payments from being deductible from tax (personal and corporate), and remove the capital gains discount. The savings could then lower the headline rate for everyone, as well as simplifying the system.

 

Good...stuff....but still does not affect me...I am positively geared....