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RBA calls for review of negative gearing

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Australian Broker | 16 Jul 2015, 08:00 AM Agree 0
The Reserve Bank of Australia has called for a review of negative gearing in its submission to the parliamentary inquiry into home ownership
  • David in Qld | 16 Jul 2015, 09:08 AM Agree 0
    What will happen to rents if negative gearing is altered substantially? The availability of rental accommodation will reduce an rents "may" skyrocket....and will govt build more alternative accommodation?......I don't think so.
  • Incognito | 16 Jul 2015, 10:48 AM Agree 0
    Some people believe the rental market can bear higher rents.

    I'm surprised they don't put up their rents already.

    I have a ton of renters who would prefer to buy if the Sydney market wasn't so distorted.
  • SA | 16 Jul 2015, 12:17 PM Agree 0
    Obviously the RBA is playing the card of not wanting to reduce Rates further or perhaps provides incentive to do so if investor + property prices are held in check.
    Instead of stifling internal growth + wealth of ordinary Aussies, how about heavily taxing the Overseas Investors with much deeper pockets. It would also help take some steam out of property market and help the budget more effectively than removal to Negative gearing
  • Patrick | 16 Jul 2015, 12:28 PM Agree 0
    The capital gains tax 50% general concession applies to the sale of any asset held for more than 12 months. The interest tax deduction applies to any business or investment where borrowings are used to generate assessable income. If there is a bias towards property it is not due to these factors it is the illusory belief that you cannot loose on real estate. Because sales are separated from purchases typically by many years people forget to calculate the return as an annual IRR. They just say "Look I doubled my money". Over 20 years this is only 3.5% per annum. In Sydney the prices in outlying suburbs are not racing ahead so much. In inner suburbs they are, but mainly due to poor transport infrastructure, road, rail and bus which makes inner city living a premium asset.
  • CaB | 16 Jul 2015, 05:20 PM Agree 0
    Let's not forget that the property gains we keep hearing about are in part being fueled by renovation and building works. New builds are not the only reason there is a shortage of tradies. When someone spends $300k renovating their house and later sells this is represented in the sales data as pure capital gain.
  • CJ | 17 Jul 2015, 09:27 AM Agree 0
    If they make any changes they should bring in the Asset Test. Take it to those that have 10+ investment properties, not Mum & dad investors that have 1 / 2 Investment properties & are making the shortfall extra repayments from their back pocket.
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