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'Lunacy' negative gearing distorting Sydney housing market: Report

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Australian Broker | 30 Mar 2016, 07:38 AM Agree 0
Sydney’s housing affordability crisis is being artificially exacerbated by “lunacy” tax incentives, a new report has claimed
  • Rex | 30 Mar 2016, 09:14 AM Agree 0
    I'm not too sure how they propose a vacant property's losses can be offset against taxable income, or to use the erroneous term - 'negatively gearedf'.
    If the property's are not available for rent and/or rented at close to market rates, they are not an investment and the ATO will regard it as non-deductible. Any accountant who sends those figures to the ATO better keep a close eye out for their future audit. And the tax payer better prepare for the tax payment plus penalties.
    It5 is an easy resolution to the whole debate. The ATO allows deductibility for investment [business, shares, property, etc] with the intention of generating a profit from the activity. If not prospect of revenue/profit the ATO can simply disallow. Remember the swathe of MIS [et al] that were bulldozed by the ATO?
    So if properties are vacant and being held for the benefit of capital growth, that's a business/investments/speculative decision and has nothing to do with the potential for tax deductibility.
    Using that argument, anyone buying shares for the potential future increase in share price, rather than the available dividends, is merely forcing the price of equities up and inflating the market.

    No one would do that would they??
  • SEQ Broker | 01 Apr 2016, 10:19 AM Agree 0
    If there is a period of time when sometimes someone buys vacant land for the purpose of building on as a place for them to live but they have not yet got their construction in order /ready to go. The government wants to charge investment rates on stamp duty for the purchase. the government believes unoccupied property is an investment clearly.
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