Motley Fool: The seven-point plan on housing affordability

Does this make sense to you?
Motley Fool: The seven-point plan on housing affordability

 

Yes. I actually think there 7 points are not that unreasonable. Whilst I would prefer interest only loans and 50% cgt discount I agree with there reasoning. However interest only in the right hands is ok.

 

Their first one is interesting:

It strikes me that if companies can deduct interest costs from their tax bill, individual investors should be afforded the same option, whether it's in housing, shares or Calathumpian marbles. So I wouldn't touch negative gearing​

I've thought about this in terms of NG. A sole trader can I believe "mix" their personal income/outgoings with their trading income/outgoings (ATO). But a person owning/in a company cannot. Sole traders are personally responsible for financial debts.

Motley Fool are therefore drawing a long (and incorrect) bow with their statement - instead, companies and sole traders are different and individual investors are much much more like sole traders than they are like companies.

However, while they worded it badly, I agree with the that if sole traders can deduct then individual investors should be able to as well. Of course this means that individual investors should therefore have the same constaints on how they act as sole traders:

• register nationally (e.g. for ABN)
• separate bank accounts for personal and investing
• keep adequate tax record (doh!)

So if investors want negative gearing, I reckon they should have to register nationally and separate their bank accounts. The first could be a leeeetle controversial. The latter is probably just a damn good idea!