by Banker » Tue Sep 03, 2013 10:18 am
by dedja » Tue Sep 03, 2013 10:21 am
by Banker » Tue Sep 03, 2013 10:24 am
by Psyber » Tue Sep 03, 2013 10:39 am
Beware of superficial thinking!Banker wrote:Which ever party promises to scrap/cap Negative Gearing will get my vote this Saturday.
Why do we allow residential housing to be used as an investment? Who benefits from exponentially increasing house prices?
Buying and selling used houses does nothing for the economy. Imagine if negative gearing was used on something productive?
by Jimmy_041 » Tue Sep 03, 2013 10:47 am
by FlyingHigh » Tue Sep 03, 2013 10:48 am
by FlyingHigh » Tue Sep 03, 2013 10:54 am
Jimmy_041 wrote:Quite happy to scrap it if you scrap tax on the profits and scrap capital gains tax.
If the government want to tax profits, the costs are tax deductible.
I have a better one after reading the paper last Saturday
If religious organisation want to cross the line and comment on political matters, they should be taxed.
There is a separation of church and state, and they should not cross that line for any reason whilst they have tax free status.
They have no right to comment on any political matter
by Banker » Tue Sep 03, 2013 10:55 am
Psyber wrote:Paul Keating tried to scrap negative gearing on rental properties when he was in power.
Investors then sold the properties to people who bought them to live in and a shortage of rental accommodation developed.
PK then restored negative gearing to fix that as rents sky-rocketed.
(A new form of auction had emerged - people began offering agents higher rent than was advertised to try to secure the accommodation.)
.
http://www.smh.com.au/articles/2003/08/ ... 76588.html
Pollies tell fibs about negative gearing
By Ross Gittins
August 25, 2003
in July 1985 - and as part of a much bigger tax reform package - Treasurer Keating moved to "quarantine" losses from negative gearing by stopping them from being deducted against other income. The US Congress had already done something similar.
But, so we're asked to believe, this caused investment in rental accommodation to dry up. Vacancy rates fell very low and rents shot up. By September 1987 - just over two years later - Mr Keating was forced to admit his error and restore the old rules.
However, Saul Eslake, ANZ's chief economist, has gone back to check this story and can't find it.
His examination of the Real Estate Institute of Australia (REIA) figures for the capital cities shows that rents rose sharply only in Sydney and Perth (and the Bureau of Statistics' figures for dwelling rent don't show a marked increase for any capital).
If the tax change was causing trouble, you'd expect it to be showing up in all cities, not just one or two.
Mr Eslake's conclusion is that rents in Sydney and Perth surged because their rental markets were unusually tight for reasons that had little to do with the tax change.
And this conclusion is supported by an earlier study by Blair Badcock and Marian Browett, geographers at the University of Adelaide.
by wycbloods » Tue Sep 03, 2013 11:00 am
Jimmy_041 wrote:Quite happy to scrap it if you scrap tax on the profits and scrap capital gains tax.
If the government want to tax profits, the costs are tax deductible.
I have a better one after reading the paper last Saturday
If religious organisation want to cross the line and comment on political matters, they should be taxed.
There is a separation of church and state, and they should not cross that line for any reason whilst they have tax free status.
They have no right to comment on any political matter
by Hondo » Tue Sep 03, 2013 11:00 am
Jimmy_041 wrote:Quite happy to scrap it if you scrap tax on the profits and scrap capital gains tax.
If the government want to tax profits, the costs are tax deductible.
by Psyber » Tue Sep 03, 2013 11:01 am
by Psyber » Tue Sep 03, 2013 11:07 am
Banker wrote:Psyber wrote:Paul Keating tried to scrap negative gearing on rental properties when he was in power.
Investors then sold the properties to people who bought them to live in and a shortage of rental accommodation developed.
PK then restored negative gearing to fix that as rents sky-rocketed.
(A new form of auction had emerged - people began offering agents higher rent than was advertised to try to secure the accommodation.)
Proof? Stats?
by Banker » Tue Sep 03, 2013 11:34 am
Hondo wrote:Jimmy_041 wrote:Quite happy to scrap it if you scrap tax on the profits and scrap capital gains tax.
If the government want to tax profits, the costs are tax deductible.
Exactly right. Investors take a loss at the start to then make profits later on and they should be taxed on those profits surely. If so, let them have their tax deduction.
Do we stop negative gearing on shares too?
Scrapping negative gearing won't stop all investors in the property market anyway. It will remove some but others will still back themselves in to finding good property investments that will deliver returns > than what they lose in tax deductions on the interest paid. You would have to ban property investment altogether and why would be want that anyway? The cost of policing this law would be possibly be greater than the tax revenue saved.
Banker .. are you against negative gearing or property investment in general?
The Howard government's 1999 decision to tax capital gains at half the rate applicable to wage and salary income, converted negative gearing from a vehicle allowing taxpayers to defer tax on their wage and salary income (until they sold the property or shares that they had purchased with borrowed money), into one allowing taxpayers to reduce their taxation obligations (by, in effect, converting wage and salary income into capital gains taxed at half the normal rate) as well as deferring them.
As a result, negative gearing has become much more widespread over the past decade, and much more costly in terms of forgone revenue.
According to the tax office, Australia had 1,811,174 property investors in 2010-11. Of those, 1,213,597 made losses totalling $13.285 billion.
by dedja » Tue Sep 03, 2013 12:05 pm
by mick » Tue Sep 03, 2013 12:23 pm
dedja wrote:How is it a loophole? ... If using your numbers. 1.8M are abiding by the law and obtaining deductions that they are legally entitled to.
Also it might be worth mentioning Australia has a relatively high personal tax rate and in the United States, mortgages on the primary place of residence can be Federal Tax deductible, something we cannot do here.
by Banker » Tue Sep 03, 2013 12:24 pm
dedja wrote:How is it a loophole? ... If using your numbers. 1.8M are abiding by the law and obtaining deductions that they are legally entitled to.
by Jimmy_041 » Tue Sep 03, 2013 12:52 pm
Banker wrote:Psyber wrote:Paul Keating tried to scrap negative gearing on rental properties when he was in power.
Investors then sold the properties to people who bought them to live in and a shortage of rental accommodation developed.
PK then restored negative gearing to fix that as rents sky-rocketed.
(A new form of auction had emerged - people began offering agents higher rent than was advertised to try to secure the accommodation.)
.
Proof? Stats?http://www.smh.com.au/articles/2003/08/ ... 76588.html
Pollies tell fibs about negative gearing
By Ross Gittins
August 25, 2003
in July 1985 - and as part of a much bigger tax reform package - Treasurer Keating moved to "quarantine" losses from negative gearing by stopping them from being deducted against other income. The US Congress had already done something similar.
But, so we're asked to believe, this caused investment in rental accommodation to dry up. Vacancy rates fell very low and rents shot up. By September 1987 - just over two years later - Mr Keating was forced to admit his error and restore the old rules.
However, Saul Eslake, ANZ's chief economist, has gone back to check this story and can't find it.
His examination of the Real Estate Institute of Australia (REIA) figures for the capital cities shows that rents rose sharply only in Sydney and Perth (and the Bureau of Statistics' figures for dwelling rent don't show a marked increase for any capital).
If the tax change was causing trouble, you'd expect it to be showing up in all cities, not just one or two.
Mr Eslake's conclusion is that rents in Sydney and Perth surged because their rental markets were unusually tight for reasons that had little to do with the tax change.
And this conclusion is supported by an earlier study by Blair Badcock and Marian Browett, geographers at the University of Adelaide.
by dedja » Tue Sep 03, 2013 1:53 pm
by Hondo » Tue Sep 03, 2013 1:59 pm
by Banker » Tue Sep 03, 2013 2:26 pm
Hondo wrote:If individuals can build personal wealth through property investment aided by negative gearing for their retirement then that's less the Government has to pay in pensions
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