Silly question about Negative Gearing?

But individual business owners CAN offset business losses against other earned income.
Eg: when a person sets up a business while still working... Business income (or losses) get lumped in with earned including me to become taxable income.
Or
Sole trader sets up another separate business and makes a loss in new business....again all income (and losses) get totaled to become taxable income.

So, overall, I guess the answer to my question is..."Just because it is ".

 

A sole trader can't claim business losses against other income in many situations as already highlighted. Here is the ATO link:

Offsetting current year losses against other income | Australian Taxation Office

 

Have a look at Clive Palmer's QNI.

Tax payer is up for $M's to pay FEG, etc.

Many would say that the Townsville economy was too reliant on QNI.

No social impact - 800 workers lost their jobs.

 

NG removal is not going to help people get a property. It is only part of the story.

Someone who is 25 or 30 who has not done so by now, probably never will while they keep the mentality that they can't do it & it is all too expensive.

So the answer is, it is just being used as political leverage as it has been published as the reason for property prices growing. For simple thinkers it is an easy target and easy to point at while ignoring everything esle.

 

One mismanaged, un-diversified aberration is hardly an accurate (statistically significant) representation to justify or critique a national policy.

 

Dont worry about the other 96% of ALL businesses then...

Why 96 Percent of Businesses Fail Within 10 Years

Surely this would have a social cost...

 

Yep, that is an aberration as well.

By definition, 'speculative investment' is one that involves a high risk of loss. Based on this definition, business is speculative, property is speculative, mining is speculative ... One could even say that life is speculative.

We need the Government to ban all speculative investment; that would be great for our economy!!!!

 

During 2014–15 the Department of Employment advanced $301.04 million under the Fair Entitlements Guarantee. The Department provided assistance to redundant workers involved in 2,630 company insolvencies.

Tax payer does not subsidize the speculation. Hmmm

 

Yes, housing is a basic human right, but home ownership isn't

[QUOTE}
Would you support the financialisation (introduction of investors) for the basic water supply making clean water excessively expensive for those in Australia who need it?[/QUOTE]

No, I don't support it (or indeed the privatization of the electricity grid or telecommunications infrastructure), but it is on the agenda for some. Many would argue privatization actually makes it cheaper, but I posit that is only in the short term, and impacts on quality, safety, and equity.

Cheers,
Inertia.

 

Err.. No. The average age of first home buyers has been consistently rising. The majority of people don't buy until 30+ and its worse in crazy expensive markets like Sydney.



This ABS report is also pretty good:
4130.0 - Housing Occupancy and Costs, 2009-10


So is this report:
http://rev-blog.s3-ap-southeast-2.a...ateVIEW.com_.au-First-Home-Market-Report1.pdf

ING Direct claim age 38 for Sydney:
No Cookies | Daily Telegraph

 

2016 hipsters financial expenditure statement.

50% - SUV, Sports car or 4wd ( 100% financed with personal loan paying 10% compounding interest over 5 years, Value in 5 years = scrap metal ) rinse and repeat

30% - extra curricular, food and entertainment ( $10 craft beers @ 1/2 an hours wages a throw, eat out 3-4 nights a week @ $50 a throw or 1 days wages per week, buys lunch 7 days a week,
$10 a throw or 1.5 days wages a month, double mocha, cappa, frappe chino, carmel latte 7 days per week @ 7 hours wages per month or lets call it 1 whole days rat race and grind per month.

10% - Clothing and man scaping ( $200-$300 jeans and $100 t shirts @ 1-5 days wages per month, $80 hair cuts at 1/2 days wages per month,

5% - Gambling ( will indiscriminately roll the dice with 1/2 to 1 days wages per week to see who's fly on the wall has the larger penis.

4% - mobile phone ( continuously buys data packs because when not actually forced to work at work is tweeting, facebooking etc, or is not pre occupied with self indulgence from other forms of loss making activities, is uploading to their friends and anyone else that will listen, how high roller their lifestyle is on $76.6K per annum

0.5- 1% - Emergency Cash buffer - One last bet on that dog at race 5 morphetville, sweetener for disgruntled girlfriend after the weekends shenanigans with the boys, Savings for bali trip for 3rd time in 18months ( likeliness to go on tick 99/100 )

0.5 -0% - Saving as hard as possible for first home because living in parents basement is getting thin, Seeking 4 bed 2 bath, 5kms from heart of sydney cbd with development potential for my next deal which will be 57 units.

 

True, but in a modern, democratic and rich country like Australia perhaps maintaining a home ownership rate around 70% would be a healthy target. Especially given how much influence government policy has on our housing market.

Renting is a form of housing/shelter which can meet the human need, just as water from a well can meet our living requirements, but in a country like Australia a better form should be expected.

Even the Liberal Party of Australia's Federal Constitution in Part II (Objectives, section n) says:

"...in which family life is seen as fundamental to the well-being of society, and in which every family is enabled to live in and preferably to own a comfortable home at reasonable cost, and with adequate community amenities."

 

I disagree. Unless you really meant "but in a country like Australia a better form should be aspired to".

I believe this summaries the two camps on PC. One camp expects home ownership while the other aspires home ownership

where:

Aspire = To have an ultimate goal, to desire strongly, to strive towards.
Expect = To regard something as likely to happen, to require something as rightfully due or appropriate in the circumstances.
​

In my 40 years in the property market, it has never been easy to own one's home. if it was, everyone would own one.

 

Right (it hasn't ever been easy), but a comment like that downplays the fact that it is far more expensive to buy today than 40 years ago (relative to incomes, etc), carries more risk & is being achieved by fewer.

I don't think everyone should expect to be able to buy a home, but in a market in which government controls basically all aspects of buying & building I think it's reasonable to expect they keep the home ownership rate at a reasonable level, giving home buyers a 'fair go'.

 

No, the opposing view is that barriers to home ownership (as an owner occupier, not an investor) should be reduced where possible, especially where these barriers exist because of an unnecessary (why do people need their personal investment choices subsidized again?) and inconsistent (see my earlier posts RE treatment of almost every other form of loss in our tax system) concession that costs billions of dollars a year.

 

I wasn't downplaying anything.

When we bought our second home (early '80s), the banks wouldn't give us a mortgage even though we had 60% deposit. They would NOT count the wife's salary because she was of child bearing age. To make it happen, we borrowed 20% from the banks as a personal loan (with its high interest rate) and 20% from my parents (at mortgage rates).

To get our third home (early '90s), we bought a take-away food business. I kept my job in IT (as it was well paying). The wife worked in the business with one kitchen-hand. We opened the shop doors 12 hours a day (from 9am to 9pm), 7 days a week (we were even opened on Christmas Day). Cleaning up, doing the bookwork, etc was done after the shop closed. The wife threw a spanner in the works by falling pregnant with our first child. On many occasions, she had to pull the boob out of our daughter's mouth, tuck the boob away and serve a customer. This business (and our hard work) allowed us to make it happen.

To us, we did not care how expensive home ownership was or how hard it was. We could either whinge about it or just make it happen. We always chose the second course and have little time for those who choose the first (including a number of family members and friends).

After 40 years in the property market, I can tell you now that you will be very disappointed if you rely on the Government for anything. As I detailed in another post:

1. Learn the rules (the Government sets these) and play the game.
2. If they (the Government) change the rules, change your game.

We have been caught out many times with Government rule changes. We could have whinged about it or changed our game. Once again, we always chose the second course.

As individuals, we cannot control the price of properties. The only way an individual can make home ownership more affordable is to increase one's income. That is, work smarter, work harder, work longer, take riskes (buy a business), etc. That is what we had to do for the last 40 years and it works. Whinging doesn't.

 

@kierank

Writing and rallying others in support of changes to government policy to improve housing affordability is not "whinging" and can make a difference, just look at the change in sentiment around negative gearing the past few years for an example of that. Sure some people just whinge about prices just as there will be a bunch of investors whinging when changes are made to negative gearing.

There's nothing wrong with expessing support for change to government policy. I say this as a homeowner who didn't struggle that much to buy my first home (i.e. personal anecdotes aren't really that useful when looking at the bigger picture).

 

Absolutely correct.

Seeking change does not make you a 'whinger'. You can play by the rules while advocating for them to be changed. I'll still be looking to buy a PPOR even if negative gearing isn't abolished. I'll still be investing further in property regardless if negative gearing is or isn't abolished.

 

Shh, you don't want to give them any more crazy ideas.

 

Hahahahahahahahaha take a bow, I actually laughed out loud on the train.

Sad sad reality is your actually not far off the pace!!! That is the thing that blows my mind! The uninformed sit around pointing the finger at negative gearing whilst they are at the pub drinking $16 schooners of craft pale ale.
They then have the nerve to jump on there phone get on realestate.com flick to map view and don't dare scroll outside the vicinity of a 10 minute trip into town.