Property agents unite to fight negative gearing crackdown

After 27-28 years of economic growth there are two whole generations (possibly more) who have no recollection of what a recession is and to experience >10% unemployment, lack of investment, tight liquidity etc.

It won't happen overnight as State Govts have commitments running out 3-4 years or more before that spending dries out.

 

Never? Home ownership has historically been pretty high in Australia. I'm pretty sure lots of higher income young people will be happy to snap up IPs that are offloaded after NG ends

 

Got this from my REISA rep:


Dear David


MEDIA RELEASE - Real Estate Institute launches Federal Election campaign

Coinciding with the calling of the 2019 Election the Real Estate Institute of Australia (REIA) has launched a campaign to give its members and the property sector a voice.

“The campaign will ensure that the issues relating to the taxation of property are an integral part of the campaign and that all political parties, candidates and, importantly voters know the consequences of the Opposition’s policy on negative gearing and capital gains tax,” REIA President Adrian Kelly said.

“If elected, Labor’s policy will: abolish negative gearing from 1 January 2020 on further purchases of established investment property; halve the Capital Gains Tax exemption from 50 per cent to 25 per cent from the same date, and: grandfather negative gearing on existing property investments.

“REIA is concerned about the adverse economic impacts the policy would have, particularly during a property market downturn. The policy, if adopted, will have negative impacts on mum and dad investors, home owners, renters, the construction industry, state governments and the economy.

“REIA is coordinating the industry’s response to the threat posed by the proposed changes and has launched a social media campaign during the election across all real estate networks providing enormous reach into the Australian electorate. Campaign content released this week has already reached more than half a million Australians.”

“Our industry makes a huge contribution to the economy and REIA does not want to see economic growth put at risk by the proposal,” concluded Mr Kelly.

You can join the campaign at Facebook, Twitter and Instagram.


Regards
REISA

 

You are right, we can’t take polls on the face value, but when u r getting the same results in every poll that does give u an indication..
Specially with seats distribution, highly unlikely anything else but labor win..(this may be their biggest win)..

And u r right, anything can happen in 5 weeks. That is just worse for libs as they don’t have the faces and leaders or a message that will resonate with the public....
Problem is they have no policies to talk to and only blaming labor for everything won’t help...

Libs are getting caught on every stupid lies they make, specially in regards to their climate policy...

I am fine if you don’t trust libs or labor.... but the difference in their election kick off was big...

Where Morrison didn’t had a strong msg, shorten knew exactly what to say (or what ppl want to hear)..

 

I agree with this, I know a lot of ppl who make very very good money and still didn’t want to risk going in as the market was crazy....now or even in a years time, they will have a good chance to bounce back in

 

Nothing better than a scare campaign by vested parties, oh well... sadly it’s not gona cut through..

Their concerns are based on their vested interests and beliefs and not backed by any meaningful data..

 

If someone wasn't vested, why would they have an opinion on it either way ?

 

Highly doubt it. Many ppl on high incomes. No savings.

 

Enough savings but not enough to keep up with the pace of price increases...

This will change mid term..

 

This is so not right, Me and my family are not linked to asylum seekers in anyway...but we do have an opinion on how they should be treated...

 

nah don't buy it. Pre boom sentiment was so low and still many had no money saved to buy.

 

Might be worth putting $1m on Labor to recoup what I'll lose under their term?

Actually I just did the math and that won't be enough!

 

This seems good for established property investors, high yield and you can still offset you investment income tax liability.

Crap if you are a new investor or want to use negative gearing to enter the market.

 

I'm going to be the dirty sock in the clean washing *** but I will disclaimer that within 12 months all our properties will be debt free so no NG claim for us anyhow. *** second disclaimer, I have always been a Liberal voters but this time around it's more a case of which party is least distasteful

I don't have an issue with Labor's NG policy. They have already stated that they will "grandfather" existing IP's, and that NG will still apply to new builds.

I do admit that I don't believe investors are the one's driving the prices up - as, as investors, we are looking for the best returns for our $$ and paying to much for an asset is does not make good investing sense. I also understand that Labor may water down the NG policy as their target is really those who own multiple negatively geared properties (ie 6+) - with over 50% of subsidies going to the top 20% of income earners that claim.

Positive plan to help housing affordability (about halfway down the page)

The biggest thing anyone can do to make housing more affordable is remove the damn stamp duty, but it's such a cash cow that no government wants to touch it

 

ACT gov has.... Don't talk about the land tax....

 

and the increases in rates

Cheers,
Oracle

 

Really...and what if property values continues to go down after their purchases...many would have negative equity and would be stuck, unable to sell, unless they come up with the extra cash.
In addition most Oz wealth is in real-estate hence lowered prices mean most would feel poorer, sentiment down can drive prices down, economy down.
Sometimes we need to think what is better feeling poorer or richer not just for property sector but for the economy in general.
I would think the issue for the young people on high incomes is not just reflected in the property price, but rather can they save that required deposit with all those temptations of our society today.
How many have heard and practiced delayed gratification?
On another note, just from past history, abolishing NG may increase rents, hence less money saved again for that necessary deposit...?
To me NG is irrelevant to my property investing, it is a necessary initial cost, like business needs capital costs to start their business. You see if you buy a well located property, and the key here is well located that will rise eventually in value or you can create to add values, and you stop taking on more loans, eventually that loan over time, will become neutral and you will even become positively geared or have positive cashflow, time and market forces permitting....

 

Any section of society has vested interests in policies that threaten their livelihood. It's common for pollies to pejoratively dismiss their opponents as vested interest. Should we voters do the same?

I don't think so. We should listen to people affected by policies from both sides of politics for the very reason they have vested interests.

Many times I’ve defended asylum seekers on this forum. I was a refugee myself. Would you have dismissed my views as vested interest?


.

 

To me NG is irrelevant to my property investing, it is a necessary initial cost, like business needs capital costs to start their business. You see if you buy a well located property, and the key here is well located that will rise eventually in value or you can create to add values, and you stop taking on more loans, eventually that loan over time, will become neutral and you will even become positively geared or have positive cashflow, time and market forces permitting....[/QUOTE]

You see to me coming from a country where I bought and rented out properties, and there was no negative gearing, this all seems completely upside down. Properties were cash flow positive from the outset, otherwise why buy them? No running a losing business, waiting for things to finally make financial sense, no market relying on capital gains (ever and unsustainably increasing prices). Just buy a property wisely, maybe add value through extending or renovating, but basically rent it out for markets rates, property prices determined through returns. "Simples". Here there seems to be a disconnect between prices and returns, which has come about as a result of negative gearing. Imagine if Kennards started renting out stuff for a loss! makes no sense.

I think the problem here is that Australians are so buried in the 'Aussie way' of doing things, they cannot imagine any other alternative, even if it is the norm elsewhere. I remember a publican here telling me it was an absolute impossibility to run a pub without pokie machines! Looked at me like an idiot when I pointed out that must pubs around the world made do with selling beer and food. (Also the landlord generally ran the place from behind the bar, didn't need ten staff, and responsible service marshalls, bouncers etc etc.)