# Abolish Negative Gearing



## Garpal Gumnut (2 July 2010)

The time has come to abolish negative gearing on investments both stock and property.

Too much dead money is being gambled by people with no real understanding of markets or gearing, resulting in catastrophic losses during the gfc.

These losses will only be magnified as a new cohort of mugs are enticed by the banks to go long on shares and derivatives in the second leg of this bear market.

Many investors are withholding housing stock from young couples by artificially inflating the price of housing through the use of negative gearing.

There is no way that houses are worth 7 to 9 times times average yearly earnings. The longtime average is closer to 3 or 4 times.

Let us hope that Julia Gillard or Tony Abbott have the balls or ovaries to abolish this festering inequality in our financial system, whichever one of them gets in to government after the election.

gg


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## drsmith (2 July 2010)

Governments state and federal want to keep the property bubble going, not burst it.

Joh will rise from the dead before NG is abolished.


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## It's Snake Pliskin (2 July 2010)

The Hawke gov tried it and it didn't work. Let's look at marginal land and the release of land for building to increase supply.

Property should not be for investing.


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## jbocker (3 July 2010)

I rather like the way Whitaker puts it...


http://www.sunshinecoastdaily.com.au/story/2010/05/04/no-attack-negative-gearing/

No attack on negative gearing

Noel Whittaker | 4th May 2010


THE Henry Review contained 138 recommendations. And, as I predicted, there has been no attack on negative gearing.

THE long awaited Henry Review contained 138 recommendations, most of which have ignored by the Rudd Government. And, as I predicted, there has been no attack on negative gearing.

Cast your mind back to 1985 when Treasurer, Paul Keating, watered down negative gearing by introducing a system that quarantined any net losses from property investment, and required them to be offset only against future profits. It was a disaster - investment in property fell dramatically, rents went sky high,and in October 1987 Keating backed off and reversed his original decision.

Despite the misinformation that is often bandied around, negative gearing doesn’t save much tax. If you bought an investment property for $400,000, and borrowed the entire purchase price, the interest would be about $30,000 and the net rents would be around $16,000. This would give you a cash shortfall of $14,000 which would only save you $5,530 in tax if you earned between $80,000 and $180,000.

Who in their right mind would get themselves into hock for $400,000 just to save $5,530 a year in tax? Sure, I admit that certain properties can give tax breaks due to depreciation allowances but these are often illusory as any tax saved is clawed back when you eventually sell.

The essence of negative gearing is that it speeds up whatever is going to happen – poverty or wealth. Buy a property for $400,000 on $20,000 deposit and you will have doubled your money if the price rises to $440,000, however if it falls in value you could lose your deposit unless you are prepared to wait out the cycle. The problem for property buyers now is not that negative gearing may be abolished, but that they will be lured into buying over priced properties which could devastate their finances if prices fall as interest rates rise


Noel Whittaker is a director of Whittaker Macnaught Pty Ltd. His advice is general in nature and readers should seek their own professional advice before making any financial decisions.


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## drsmith (3 July 2010)

jbocker said:


> Cast your mind back to 1985 when Treasurer, Paul Keating, watered down negative gearing by introducing a system that quarantined any net losses from property investment, and required them to be offset only against future profits. It was a disaster - investment in property fell dramatically, rents went sky high,and in October 1987 Keating backed off and reversed his original decision.



Paul Keating abolished negative gearing when interest rates were in the mid to high teens.

Had he attempted it in the early/mid 90's when short term interest rates were low but before asset prices boomed, it may have had a better chance of succees.

Like the mid-80's, now is not the time. The deduction against other income could however be capped at a fixed percentage above the investment's income. The time to abolish will be when yield more closely matches loan interest rates.


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## Garpal Gumnut (3 July 2010)

drsmith said:


> Paul Keating abolished negative gearing when interest rates were in the mid to high teens.
> 
> Had he attempted it in the early/mid 90's when short term interest rates were low but before asset prices boomed, it may have had a better chance of succees.
> 
> Like the mid-80's, now is not the time. The deduction against other income could however be capped at a fixed percentage above the investment's income. The time to abolish will be when yield more closely matches loan interest rates.




This would be way too complicated and lead to even more manipulation by lawyers, financial planners and accountants. 

Housing affordability is one of the major impediments to a young couple having children when they want, having to restrict the size of their family and having to either live tens of kilometres from their workplace or live in debt for the rest of their lives.

Meanwhile every new capitalist public servant in a job for life is screwing a tenant with large rents somewhere, the rents decided on an artificially high valuation on the property, as a result of the cornering of property market by these self same negative gearing faux socialist capitalists.

It is time comrades for this stain on a free economy to be removed. It should be removed overnight, with no compensation or wriggle out clauses, to again make housing a level playing field.

gg


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## medicowallet (3 July 2010)

Garpal Gumnut said:


> The time has come to abolish negative gearing on investments both stock and property.




This is a great idea, but would need to be associated with means of protecting our assets from foreign investment (as the lower prices which we bid them too, without a taxbreak, would appear more favourable to foreign investors)

Do both, and you get my vote.


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## gav (3 July 2010)

jbocker said:


> I rather like the way Whitaker puts it...
> 
> http://www.sunshinecoastdaily.com.au/story/2010/05/04/no-attack-negative-gearing/
> 
> ...




Well according to the tax office, landlords claim an average of *$10,640* each.  Negative gearing by landlords totaled *$12.75 billion* in 2007-2008.  

http://www.theage.com.au/national/negative-gearing-top-tax-break-20100326-r377.html

That is more than the total tax paid by Australian mining companies last year! ($11 billion)




drsmith said:


> *The deduction against other income* could however be capped at a fixed percentage above the investment's income




Now this is what needs to be abolished.  _Property_ losses/deductions should only be allowed to be claimed against _property_ profits, just like every other investment stream.  The only people who would suffer would be spruikers who over-leveraged.


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## moXJO (3 July 2010)

When keating abolished negative gearing, public housing waiting list blew out by about 5 years. They won't abolish it again.


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## drsmith (3 July 2010)

gav said:


> Now this is what needs to be abolished.  _Property_ losses/deductions should only be allowed to be claimed against _property_ profits, just like every other investment stream.  The only people who would suffer would be spruikers who over-leveraged.



Several billion dollars can't be pulled suddenly from one part of the economy without unintended consequences. Just ask the big miners or even Paul Keating from his attempt in the mid 80's. The consequences now may be a repeat of Paul Keating's experience or even a bursting of Australia's residential property bubble. No government is going to do that willingly.

You have to start somewhere and a cap is better than no cap as currently exists. If over time, rental yields appreciate relative to interest rates (in essence, real property prices decline), the cap could be progressively reduced and perhaps ultimately eliminated alltogether. This should be a policy objective. This approach is more likely to yield a more gradual decline of real property prices back to more realistic levels.  

Fundamentally, I am of the view that there should be no deductions against salary income whatsoever, but the road to that outcome is not a simple and short one. 

At some point, Australia's residential property bubble may end up beyond the control of governments and burst anyway. This will impact positively on rental yields. This will be a more favourable environment to abolish negative gearing against salary income.


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## tech/a (3 July 2010)

So while we are at it every new business owner who starts up we will ban them as well.
They are negative geared to the max.

Naivety to the max on this board.


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## drsmith (3 July 2010)

tech/a said:


> So while we are at it every new business owner who starts up we will ban them as well.



No, but capitalist public servants (to which GG refers) geared to the max in residential real estate do exist.


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## wayneL (3 July 2010)

tech/a said:


> So while we are at it every new business owner who starts up we will ban them as well.
> They are negative geared to the max.
> 
> Naivety to the max on this board.




"Businesses" that are structured with no reasonable chance of a trading profit have their losses disallowed as a deduction against other income. This should also be the same with investments. 

Start up businesses that have an objective of profit, yet run at a loss for the first year or two, can hardly be regarded as negatively geared. This is simply a shortfall of anticipated revenue while clients bases are acquired and established.

A rental property has maximum revenue as soon as it is tenanted and are often structured to run at a trading loss for a lengthy and indeterminate time.

It's chalk and cheese, oranges and apples.

Naivety is not an opinion which strikes against your vested interest, such as you assert. The opinions here are not naive, they are ideologically sound. However because of the size of the VI lobby, I agree that the abolishment of NG is unlikely anytime soon.

However I like drsmith's point of a cap and progressive reduction of same, it's an achievable way of doing it without seismic effects. I's support that.


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## tech/a (3 July 2010)

They are negatively geared and their losses will be allowed as a tax deduction---Yeh I know they had every intention of becoming profitable yet a very large majority will fail and be negatively geared for a lot longer than 2 yrs some 5-10 yrs or more.

I bought A few containers of Structural Steel back in Jan I made those purchases when the $ was 92c. I still have it (Well a lot of it) I'm waiting for steel to become much more expensive (I can still buy it reasonably cheap) before releasing it on the market (Its in a warehouse). I'm grossly negative geared on it,I was also at one stage grossly negatively geared on a few properties---waited then too and sold some---no longer negatively geared---far from it.

BOTH  are business decisions and whether I'm a fat cat public servant or a self employed employer I have used negative gearing to my and the general populaces benefit.

How?
I provide 18 families with a better than average income.
I pay way above the average taxes.
I will not be requiring Social Benefits.
I provide 6 families and 2 businesses with premises.

If you don't like naive then I'll use unimaginative.


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## drsmith (3 July 2010)

tech/a said:


> I bought A few containers of Structural Steel back in Jan I made those purchases when the $ was 92c. I still have it (Well a lot of it) I'm waiting for steel to become much more expensive (I can still buy it reasonably cheap) before releasing it on the market (Its in a warehouse).



How does structural steel in a warehouse earn income ?


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## tech/a (3 July 2010)

drsmith said:


> How does structural steel in a warehouse earn income ?




The AUD Falls!

Bought 250 Tonne at $765/T

Current Indent is $950-1050/T
Wholesale is $1250/T
Retail $2000-2300/T

So sitting in the warehouse has gained 30% approx in 6 mths.

I'm looking at Mid Sept- Dec when I know steel will be dearer and I will have it!

250 tonne of structural isnt much steel.
The big guys buy 1000s of Tonne and do the same--just business.
I actually partner indent orders with one of the big guys.
Makes his buy price cheaper again!


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## wayneL (3 July 2010)

tech/a said:


> They are negatively geared and their losses will be allowed as a tax deduction---Yeh I know they had every intention of becoming profitable yet a very large majority will fail and be negatively geared for a lot longer than 2 yrs some 5-10 yrs or more.




...and what happened to the Collins Street farmers who got into ag for the "tax write off"?

Sorry boys, the ATO woke up to that in due course.


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## wayneL (3 July 2010)

tech/a said:


> The AUD Falls!
> 
> Bought 250 Tonne at $765/T
> 
> ...




Tech

Now instead of apples to oranges, we are comparing poker chips to drapery. WTF?

Your steel deal is a transaction within a business that is making profit overall, nothing whatsoever to do with negative gearing. Please, let's not run off at totally irrelevant tangents.


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## tech/a (3 July 2010)

Wayne

I treat my Properties as a business and at times they are negatively geared as all businesses are.
Whats the difference?

Its a tool one which is at the disposal of everyone.
Why shouldn't people be able to use it.

Ive attempted to illustrate the good ------proper use of N/G can have---but you wish to narrow the discussion to such a pin point that no other expression of opinion can have the breadth to be presented.

Sure N/G is used with selfish motives and I do---but there is a run off.
Banning all of us will be as prudent as RUDDS Resource tax.

As I said no imagination---and naive---as was RUDD


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## wayneL (3 July 2010)

tech/a said:


> Wayne
> 
> I treat my Properties as a business and at times they are negatively geared as all businesses are.
> Whats the difference?
> ...




If the property portfolio is likely to return a trading profit within a reasonable time frame (say 2 or 3 years), then I agree the losses should be deductible in the current year. If there is no chance within the forseeable future, the deductions should be deferred.

This is as how it applies to normal business.

Pulling in a number of irrelevant examples doesn't actually support your case, it undermines it.

It is not a case of banning anything, rather, it is the normalising the tax treatment of investments as it relates to productive business.

Treat your properties as business? Fantastic! I applaud you. Then you wouldn't be averse to  identical tax treatment as business.

You may sooth your lack of relevant debating points by accusations of "unimaginative and naive", but you have yet to illustrate why this is so, therefore prove yourself unimaginative, and incapable of illustrating why your contention is so. I observe this is normal with you, rather than debate intelligently, you simply accuse others of being losers or whatever.

pfffft 

I await some intelligent debate from you.


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## robots (3 July 2010)

hello,

extremely disappointed its ended in another property bashing exercise, amazing

that 11bil the gov doesnt get is miniscule to the $ they get from the private rental market tax collected

thankyou
professor robots


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## wayneL (3 July 2010)

robots said:


> hello,
> 
> extremely disappointed its ended in another property bashing exercise, amazing
> 
> ...




How is this property bashing?


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## drsmith (3 July 2010)

robots said:


> extremely disappointed its ended in another property bashing exercise, amazing



This isn't about property bashing, it's about tax bashing. The monster that is Australia's tax system needs a good long bashing to remove all the dead feathers. The problem though is it's way too heavy for any of our wimpy politicians to lift and so they just keep adding more plucked feathers from the goose.

The ultimate ideal would not be to tax income or capital gains at all and for government to provide services purely from consumption tax, corporate tax and economic rent from natural resources.

https://www.aussiestockforums.com/forums/showpost.php?p=552564&postcount=176


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## MR. (4 July 2010)

Oooh..... someone mention property bashin' ?
No...oh my mistake, better read more of the thread.




jbocker said:


> Whitaker puts it........
> 
> Cast your mind back to 1985 when Treasurer, Paul Keating, watered down negative gearing by introducing a system that quarantined any net losses from property investment, and required them to be offset only against future profits. It was a disaster - investment in property fell dramatically, rents went sky high,and in October 1987 Keating backed off and reversed his original decision.






moXJO said:


> When keating abolished negative gearing, public housing waiting list blew out by about 5 years. They won't abolish it again.




Guys we are forgetting something here!

Two months after the watering down of negative gearing (July 1985) "Capital Gains Tax" was introduced at 50% (September 1985). Before then there was no Capital Gains Tax. 

No doubt this new 50% CGT would have contributed to the problem with Negative Gearing. However, it took two years before one of them was reversed and it happened to be Negative Gearing.


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## Garpal Gumnut (4 July 2010)

wayneL said:


> If the property portfolio is likely to return a trading profit within a reasonable time frame (say 2 or 3 years), then I agree the losses should be deductible in the current year. If there is no chance within the forseeable future, the deductions should be deferred.
> 
> This is as how it applies to normal business.




I'm not an economist and when I started the thread, I may have slightly overstated the case for banning NG , as such, as business needs to borrow to capitalise, stock etc. to make goods/services to turn a profit.

wayneL's statement above basically fits with my original intent of the thread....I think...., but because I'm not an economist I don't want to get in a **** fight with every smart **** on ASF who brags about making a quid from borrowing. 

My basic premise is.
Houses are overpriced.
Young couples cannot afford them without disrupting their responsibilities to their children or the community.
Many capitalists use negative gearing in a lazy way that provides no useful outcome for the economy.
Higher house prices inevitably leads to higher rents and makes it less likely that citizens will be able to save to afford their own houses without being imprisoned in a long debt to the banks.

That was my reason for starting the thread.

gg


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## drsmith (4 July 2010)

MR. said:


> Guys we are forgetting something here!
> 
> Two months after the watering down of negative gearing (July 1985) "Capital Gains Tax" was introduced at 50% (September 1985). Before then there was no Capital Gains Tax.
> 
> No doubt this new 50% CGT would have contributed to the problem with Negative Gearing. However, it took two years before one of them was reversed and it happened to be Negative Gearing.



That makes sense especially when one considers the property price response to John Howard's 50% CGT discount. This change rewarded shorter term investment (speculation) at the expense of longer term investment.


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## It's Snake Pliskin (5 July 2010)

Garpal Gumnut said:


> My basic premise is.
> Houses are overpriced.
> Young couples cannot afford them without disrupting their responsibilities to their children or the community.
> Many capitalists use negative gearing in a lazy way that provides no useful outcome for the economy.
> ...




It has been my opinion that wealth should not be made through housing in the form of capital gains. Because of the bubble mentality of buying to make wealth a lot of people are not in a position to buy. Sadly, renting is overly expensive in cities now too. 

Robert Kiyosaki focusses on cash flow according to his writings.


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## hmmm (5 July 2010)

Garpal Gumnut said:


> My basic premise is.
> Houses are overpriced.
> 
> gg




You are unfortunately correct and this sucks balls.


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## drfuzzy (5 July 2010)

Garpal Gumnut said:


> The time has come to abolish negative gearing on investments both stock and property.
> 
> Too much dead money is being gambled by people with no real understanding of markets or gearing, resulting in catastrophic losses during the gfc.
> 
> ...




You can't be serious.  

The government attempted to abolish it in the 1980's and the housing market fell apart.  Two years later?  Negative gearing was back and better than ever.

You probably agree with the Resources Super Profits Tax as well I am guessing.  

They are both bad policies and sound like something straight out of the Ken Henry report with no basis in the real world.


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## wayneL (5 July 2010)

drfuzzy said:


> You can't be serious.
> 
> The government attempted to abolish it in the 1980's and the housing market fell apart.  Two years later?  Negative gearing was back and better than ever.
> 
> ...




Sounds like vested interests talking.


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## tech/a (5 July 2010)

> My basic premise is.
> Houses are overpriced




As it was in 1960/70/80/90/00
When I was a pimply faced kid earning $23/week a $15000 home was rediculously expensive.
When my Son bought his home last year at $400,000 it to was expensive.

Housing will *ALWAYS be SEEN* as expensive.



> If the property portfolio is likely to return a trading profit within a reasonable time frame (say 2 or 3 years), then I agree the losses should be deductible in the current year. If there is no chance within the forseeable future, the deductions should be deferred.
> 
> This is as how it applies to normal business.




How on earth do you know what timeframe it will/could take?
If an investor is capable of supporting an investment (which someone is living in at a subsidised cost---the owner is Negatively geared) why shouldnt they be able to claim a deduction---they are paying tax on other earnings which allow them to own the property.

In the business situation they have NO earnings and as such nothing to claim against.
Rightly when they do the deductions are allowed.

Big difference.


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## wayneL (5 July 2010)

tech/a said:


> As it was in 1960/70/80/90/00
> When I was a pimply faced kid earning $23/week a $15000 home was rediculously expensive.
> When my Son bought his home last year at $400,000 it to was expensive.
> 
> Housing will *ALWAYS be SEEN* as expensive.




Yeah but no but yeah but no. There are measures of value where a mean or median may be considered as relative value for that point in time.

When house prices are above that, they can be considered expensive.



> How on earth do you know what timeframe it will/could take?
> If an investor is capable of supporting an investment (which someone is living in at a subsidised cost---the owner is Negatively geared) why shouldnt they be able to claim a deduction---they are paying tax on other earnings which allow them to own the property.
> 
> In the business situation they have NO earnings and as such nothing to claim against.
> ...




There is reasonable expectation. If expenses are double maximum achievable earnings, one could bet their @ss there is no reasonable prospect of a trading profit in the forseeable future, unless there is some redevelopment prospects which may boost earnings beyond normal organic growth.


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## tech/a (5 July 2010)

wayneL said:


> Yeah but no but yeah but no. There are measures of value where a mean or median may be considered as relative value for that point in time.
> 
> When house prices are above that, they can be considered expensive.
> 
> ...




Maybe its me but it seems that the general opinion of house pricing stays well above median value far longer than below.
Infact Ive never seen comment about housing being affordable.

Wayne there is Capital gain and while its not always there if and when IPs are sold there will be capital gains tax to pay.
It may also be that LONGTERM the investor wants to create a passive income.
That may take him many many years to pay down or off his investment to do that.
Longterm holders also (If they hold for many many years) will/have seen periods of un precidented growth where they can sell some IPs and become 100% positve.

But if they cannot claim tax relief in the process over a long long period they may never achieve thier goal.They simply cant afford it.
The point Im making is that there is another side to the st home buyer arguement and thats retirees.

Far more of them and if Kids dont want higher taxes to support those who cannot support themselves they should take a leaf out of the book of those who did it just as hard as they did many years ago.


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## irish joe (6 July 2010)

I am a believer in "gearing" as a tool for wealth creation, but please take away the tax incentive unless it applies to one's own business.

On another thread I posted about stockmarkets being established as a means of companies attracting investors and not about trading and short termism.

the same applies with property; As an investor I am happy to borrow money to buy a property that i believe has good prospects for stable tenancy and longer term capital appreciation. Whether your tenant is BHP or a family not ready to buy, you still get your rent that grows over time, you still own the asset and guess what, because there is no tax deduction the govt has more money to spend on public housing

same in the stock market, companies get capital, investors get a growing dividend stream

Positive gearing brings positive outcomes for the investor AND the tenant,regardless of their current means.


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## Julia (6 July 2010)

irish joe said:


> Same in the stock market, companies get capital, investors get a growing dividend stream



Companies also fall over.  Companies also cut their dividends in a downturn.
Your capital investment can fall significantly.
It ain't always all roses which is what you seem to be suggesting.


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## irish joe (6 July 2010)

Julia said:


> Companies also fall over.  Companies also cut their dividends in a downturn.
> Your capital investment can fall significantly.
> It ain't always all roses which is what you seem to be suggesting.




Julia my dear,

I would not for a minute suggest that companies can't fall over or indeed cut dividends in a downturn. In fact that further exemplifies my point about property. You can lose a tenant and indeed you can have a profit downgrade resulting in a reduced dividend.

I ask you the question though, despite capital movements, how do NAB or WOW or TLS dividends stack up against the current interest rates available. Yes there is capital risk bu that is why we invest in shares and property. 

BTW I own NAB shares and a property leased to woolies for the next 15 yrs by way of disclosure. Oh yeah, i also have a telephone and internet connection.

I am off now to replenish my glass of pepperjack 01 and to see if GG is online somewhere. I have a meeting in the morning that requires my best.


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## irish joe (6 July 2010)

tech/a said:


> Maybe its me but it seems that the general opinion of house pricing stays well above median value far longer than below.
> Infact Ive never seen comment about housing being affordable.
> 
> Wayne there is Capital gain and while its not always there if and when IPs are sold there will be capital gains tax to pay.
> ...




maybe I'm old fashioned but I have done ok. I have a significant share portfolio, some commercial rental properties as well as a significant super fund to which i contribute my maximum every yr. The fund owns more propertyand my international and small companies exposure.

With my properties and my shares I have borrowed to invest. I have bought blue chip shares and really good propertiess with tenancies to die for, None of these purchases have been made based on tax effectivenessrather on a forecast of net yield.

Oh and i am still a good 8 runs off saluting for my 50 at the gabba


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## DB008 (7 July 2010)

Won't happen. There is a 200,000 dwelling shortfall p.a. in Australia and if you take out the investors, (ie, negative gearing), if anything, prices will go even higher.


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## c-unit (7 July 2010)

Why can't N/G only apply if the investment is a brand new dwelling? Wouldn't this provide incentives for investment in new housing construction and attack the housing bubble from both the demand and supply sides?


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## saiter (7 July 2010)

DB008 said:


> Won't happen. There is a 200,000 dwelling shortfall p.a. in Australia and if you take out the investors, (ie, negative gearing), if anything, prices will go even higher.




How does that work? If negative gearing is allowing investors to hold empty homes, then by abolishing negative gearing, the investors are forced to sell these homes which can then be occupied...


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## drsmith (7 July 2010)

One would think that after the disasters of Timbercorp and Great Southern that deductions for dodgy agricultural schemes would be plugged once and for all, but it appears not.

http://www.smh.com.au/business/macquarie-linked-to-forestry-investment-scheme-20100707-zzv4.html


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## drsmith (7 July 2010)

drsmith said:


> One would think that after the disasters of Timbercorp and Great Southern that deductions for dodgy agricultural schemes would be plugged once and for all, but it appears not.
> 
> http://www.smh.com.au/business/macquarie-linked-to-forestry-investment-scheme-20100707-zzv4.html



The PDS from Mac Bank bangs on about fees, but the most interesting part is the assumed net sale proceeds from the timber at harvest. From the most optimistic assumption their fine forestry projects offer a return of $19500 for your $10000 investment after 11.5 years.

That's 6% pa if all goes well.

http://www.macquarie.com.au/au/mfg/acrobat/macquarie_forestry_pds.pdf (p57)

Macquarie offer loans to finance the investment (being the kind hearted souls that they are) at about 10% pa.


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## Julia (7 July 2010)

irish joe said:


> Julia my dear,
> 
> I would not for a minute suggest that companies can't fall over or indeed cut dividends in a downturn. In fact that further exemplifies my point about property. You can lose a tenant and indeed you can have a profit downgrade resulting in a reduced dividend.
> 
> ...



Irish Joe (I'll forgo the 'my dear'), I posted the following on another thread yesterday:


> Yes, of course markets function on sentiment, so if gloom is flavour of the times, markets will fall. All very well to say that if someone is selling, someone is buying but that's a bit simplistic. The falling market shows that the sellers have the upper hand.
> 
> Whether one holds, or buys in at such times, is surely influenced to some extent by one's stage in life, whether there is other income available.
> 
> ...




1. Re the comparison of dividends from TLS, WOW, NAB, last time I looked neither WOW nor NAB had a yield of more than 8%.  They may now given their falling SP's.   TLS is probably more, but I wouldn't have wanted that in my p/f over the last while, thanks.

2.  Re property:  yep, agree with you completely.  And I've had very profitable IP's in the past.  But I no longer want the concerns of maintenance, tenants etc.

We will all have our own investment styles.  That's not to say any of them are 100% right or wrong.

Disclosure:  I have been all in cash for the last several weeks.


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## irish joe (7 July 2010)

Julia said:


> Irish Joe (I'll forgo the 'my dear'), I posted the following on another thread yesterday:
> 
> 
> 1. Re the comparison of dividends from TLS, WOW, NAB, last time I looked neither WOW nor NAB had a yield of more than 8%.  They may now given their falling SP's.   TLS is probably more, but I wouldn't have wanted that in my p/f over the last while, thanks.
> ...




See pm. re nab and wow ,factor in fanking credit. 

Re property, my point was really to highlight that 1. good assets be they property or shares will deliver ayield that justifies holding them. If you bought CBA in the float and held them until now would you sell. NO. If you owned apropety for the same period and prices in the area fell would you sell,NO.

I am big on sustainable income because yield is what ultimately drives growth in property and equity investments.However you should invest in whatever floats your boat, allows you to sleep comfortably and delivers the outcomes you are looking for. personally, I believe in diversification and as such would never be in 100% in any one asset class but that is my choice.


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## sptrawler (7 November 2012)

What better time to resurect this thread,
Abolish negative gearing, the government saves $5b, all the overgeared investors bail out.
All the retirees, getting $hit returns bail in.
Win win for the government, watch this space.lol


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## Aussiejeff (8 November 2012)

sptrawler said:


> What better time to resurect this thread,
> Abolish negative gearing, the government saves $5b, all the overgeared investors bail out.
> All the retirees, getting $hit returns bail in.
> Win win for the government, watch this space.lol




What?

You mean the poor will get richer and the rich will get poorer?

Are you stark raving?? 

May the Farce be with you......


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