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Could negative gearing be capped?

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Australian Broker | 20 Jan 2016, 06:31 AM Agree 0
The Federal Government is considering putting a limit on negative gearing as a part of its taxation reforms, however, a Sydney buyer's agency is warning the government that they could be the ones to lose out if major changes are made to negative gearing
  • | 20 Jan 2016, 08:51 AM Agree 0
    Negative gearing is an easy target because it is ridiculous.

    The argument of “negative gearing is one of the best ways to ensure the creation of affordable housing” counters itself. You can only have negative gearing if you own property. We need to help those that are trying to get into property for the first time when affordability is at all time lows.

    This is someone in the industry trying to protect their income stream above any kind of logic. Reminds me of the big short and look how that turned out.

  • Tom | 20 Jan 2016, 01:43 PM Agree 0
    Having more incentive for people to invest in property only pushes the price up and makes it more unaffordable. If the idea of negative gearing is to encourage real-estate growth, then why not restrict it to new property development which is the intended purpose. A person buying a 30 year old house then using negative gearing to offset income tax does nothing for the supply of houses. It adds one more rental property to the market but stops one more first home buyer from leaving the rental market.. All negative gearing on old properties is increase the price and keep first home buyers out of the market..

    Investors should be investing in development of properties. If you have investors putting their money in old properties in the hopes for capital gains then you encourage speculators and do nothing for growth..

    The real estate market is big business, so its hardly surprising anyone with a vested interest in it will welcome any type of change to negative gearing of CGT. Government needs to stay away from real estate and let the market decide the price and not expect tax payers to flip the bill for peoples investments they cant afford to pay for themselves.

    If the market crashes without negative gearing and CGT then let it crash and normalize again. Eventually the market with sort out the real price people can afford without the need for government assistance...
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