Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Negative gearing is 'feeding a fire', says new report

Notify me of new replies via email
Julia Corderoy | 17 Apr 2015, 06:27 AM Agree 0
A new report is urging for restrictions on negative gearing, claiming that over half of geared housing investors are in the top 10% of personal taxpayers
  • Chris C | 17 Apr 2015, 09:11 AM Agree 0
    Its called economic or trade cycles. they actually happen. With other industries and businesses going through hard times, the mining and construction industries drop off, high unemployment - its good to see something is still bubbling along. The negative gearing issue has been on the plate for years - will it be stopped by the people who are most likely the main users of this 'benefit' and would it cripple Aust financial industry overnight. If the RBA and Govt worked better with industries to get businesses back on their feet to get them profitable again, grow their employment base (instead of all the media hype around what will gain votes and keep me in power), the increased revenue and taxes this way, will support in a better economy. If investors who can afford it, could not purchase property and provide for tenants who can't afford it, where would the Govt house them ? The negative gearing is a shared cost with the Govt to supply housing and it is probably cheaper than NRAS & DSH and all the one off schemes they put out that end up costing us a fortune.
  • Patrick | 17 Apr 2015, 09:57 AM Agree 0
    The problem with "mealy mouths" like ACOSS is that they are completely uniformed and apparently uneducated. Capital gains tax was not reduced in 1999, the indexation of the cost base "discount" was replaced with a simple 50% concession for assets held more than 12 months. Prior to 1987 there was no CGT. The gearing and CGT concessions apply equally to shares, managed funds and commercial property. So where is the evidence that these asset markets are boiling over. Without normal deductibility of expenses including interest, rents will rise. ACOSS do you not remember the Keating experiment?
  • Wozza | 17 Apr 2015, 09:59 AM Agree 0
    My experience is that most investment loans are taken out by a couple who have equity in their home, the kids are moving out and this investment is the only one they have. It flies directly in the face of the ACOSS assertions. The last investment loan I wrote was exactly this scenario for a married couple with a small office cleaning business.
  • Salvatore | 17 Apr 2015, 11:08 AM Agree 0
    If the government has the audacity and stupidity to remove negative gearing benefits then they should also remove the unfair and punitive CGT and state land tax. Australia has become an ugly envious country where hard working people are discriminated against because they are trying to better their lives and accumulated wealth for themselves and families. Socialism is poison to the well being of a nation. Just like communism it brings everyone down to the lowest common denominator!
  • Maria Rigoni | 17 Apr 2015, 11:11 AM Agree 0
    "Negative gearing" is available to investors as a way of increasing housing stock for people who do not own property and cannot afford to, or choose not to, own property to live in without the government having to provide the required number of homes.
  • Andrew Gardner | 17 Apr 2015, 01:29 PM Agree 0
    Well Dr Goldie, clearly you don't understand taxation, you see negative gearing follows traditional tax principles. Let me explain in simple terms for you. All income is combined, (wages & rental) then expenses incurred in the generation of that income (work & property) are deducted to arrive at a taxable income, just like any other business. You may not take the risks to build a future for your family but investors do, they put up 1/2 to 3/4 of a millions dollars of hard earned cash and borrowings (that they have to pay back) to buy an asset that may grow... but may also fail. It's called return on investment and that's what makes Australia a 'lucky country' with the capacity to support charities like those you are involved in. It's not a tax rort, it's fair; you win, you pay tax (and rates & stamp duty & title fees etc); you lose... well you just lose. Hope this helps you understand what is happening in the real world.
  • Nick | 17 Apr 2015, 02:32 PM Agree 0
    Australians have frozen around 6 trillion dollars in housing, instead of productive investment. Productivity of the country is going down each year and over priced property is one of the factors that drive it down. Everything is hurting from stupid high property values, goods, services, tourism, everything. Australia will learn its painful lesson, as it cannot last forever. You cannot be a country that has just housing, you have to make something. And making something is getting harder. Unfortunately politicians can see only as far as 3 years, and people geared think they are getting richer but really just being slowly cooked like frogs.
  • Salvatore | 17 Apr 2015, 05:13 PM Agree 0
    If the government has the audacity and stupidity to remove negative gearing benefits then they should also remove the unfair and punitive CGT and state land tax. Australia has become an ugly envious country where hard working people are discriminated against because they are trying to better their lives and accumulated wealth for themselves and families. Socialism is poison to the well being of a nation. Just like communism it brings everyone down to the lowest common denominator!
Post a reply