No, but the boots he wears only to the pub obviously are not a tax deduction.So if the workman wears his boots to the pub after work, should the deduction be reduced ?
I don't agree with that at all, every one that buys a "Primary" development only does so because they hope to sell it into the secondary market at some stage, and as I said large renovations are just as important as new developments, unless you want to encourage slum lords.Secondary investment, by definition, does not bring new supply or encourage investment.
I agree with you, maybe one thing to change is to limit interest only loans (they may have already done that, I know cba does), paying principle and interest means that eventually the loan interest will be reduced and it will become positive geared automatically, especially combined with inflation raising rents over timeMy thoughts on negative gearing are, the tax break on a loss making investment is given, on the expectation that at some stage that investment will become positively geared and make a profit.
If there is no expectation that the investment will ever become positive geared, it is a speculative investment for the sole purpose of reducing tax, therefore the losses shouldn't be allowed to be offset against normal income, they should have to be carried forward and only be able to be used to offset any capital gain when the investment is sold.
It is somewhat like someone buying 50 acres of land and claiming the losses as a primary producer because they have half a dozen chooks on it, that isn't allowed the property has to be a viable business venture.
If someone buys a house for $5m in Sydney and rents it out for $20k a year making a loss, there is no likelyhood that property will ever make a taxable profit, therefore it is speculative and the losses should only be able to be offset against a capital gain.
It would be quite easy for the ATO to just say negative gearing can only be applied for x years.
Anyway better brains than ours will be looking at it, that's for sure.
It isn't a difficult problem to solve, the real issue is do politicians want to solve negative gearing, or use negative gearing IMO.I agree with you, maybe one thing to change is to limit interest only loans, paying principle and interest natural means that eventually the loan interest will be reduced and it will become positive geared automatically, especially combined with inflation raising rents over time
I don't agree with that at all, every one that buys a "Primary" development only does so because they hope to sell it into the secondary market at some stage,
and as I said large renovations are just as important as new developments, unless you want to encourage slum lords.
I wouldn’t be comfortable putting a price on it, I mean if some one wants to borrow $10,000,000 to buy a block of flats knowing it’s going to deliver a negative return for the first few years, I don’t have a problem with that, because they can borrow $10,000,000 for shares or any other business venture and negative gear it in the same way.It isn't a difficult problem to solve, the real issue is do politicians want to solve negative gearing, or use negative gearing IMO.
It would be easy to say only $x can be negatively geared, only house loans up to $x can be geared.
It isn't a difficult problem to solve, the real issue is do politicians want to solve negative gearing, or use negative gearing IMO.
It would be easy to say only $x can be negatively geared, only house loans up to $x can be geared.
1, Just because something produces a negative leveraged cashflow for a period of time doesn't mean its a bad investment, I mean look at Tesla or many other things. Also it can be just a personal decision for an investor to take a negative cashflow for a period of time until they can pay their loan down to the point it becomes positive cashflow.1, One would hope that people are either buying the property as a domicile or if they are an investor, because it is a good investment in it's own right.
2, Investors should be free to sell their property in the secondary market to participants who are bidding on the basis of the investment value of the property in it's own right.
As I explained, workman pay for their own boots, a tax deduction is not the same as getting something for free.If people want a nest egg for their retirement, fine, if they want to turn it into a business then they should pay for it themselves.
because they can borrow $10,000,000 for shares or any other business venture and negative gear it in the same way.
If you want to lock out a bunch of small investors from the property market and leave the market to cashed up investors like Harry Triguboff by all means, but there will be less stock on the market for sure.
As I explained, workman pay for their own boots, a tax deduction is not the same as getting something for free.
anyone this is getting circular, I have a list of jobs the wife needs me to do today and I am letting my self get distracted, so I will have to leave this topic for now.
1. I know that I can borrow against my home and buy negatively geared shares, just like I can borrow against my home and buy a rental property. I can even borrow up to 80% of the value of my home, and use it to buy shares using a margin loan 70% gearing so the end result is a 100% LVR share purchase, this would be available for negative gearing deductions if the income was less than the expense.1. You have been investing for 26 years, you know as well as the next person that LVR, lending standards, margin requirements etc are all completely different for margin loans or business loans than investment property loans.
2. The Government also happens to tax business profit at a flat 30% rate.
3. I would accept this as an alternative, investment property can only be done by corporate entities with similar lending standards, gearing ratios, etc.
4. Bizarre statement considering many countries in the world don't have a tax code that allows income transfer like ours and yet still somehow small investors invest in the property market. Maybe it's magic.
We will have to agree to disagree on that.I appreciate the fact that you don't use NG and your investments stand on their own, but the cumulative nationwide effects of NG are derogatory to the national interest imo.
In australia we rely on the private sector to provide housing to the rental market, with that supply provided by the private sector there would be less supply to meet the demand and rents would be higher.
Again just in my opinion, but I think negative gearing property is a government initiative to save the Government having to supply social housing and I have already explained that I feel the Government should get back into building social housing.I appreciate the fact that you don't use NG and your investments stand on their own, but the cumulative nationwide effects of NG are derogatory to the national interest imo.
Have you seen the demand for rentals in some markets? I had 27 applications on one of my units I just renovated, I am not sure who you think is going to step up and provide the capital for building / renovating more rentals if new investment from investors was stopped, I know you will say you are happen for investors to be limited to new buildings, but buildings last for decades, we have to be able to sell them to other investors otherwise we won't want to invest the capital to begin with.The demand for housing is so high that dwellings will be built even if there were no investors in the market.
Have you seen the demand for rentals in some markets? I had 27 applications on one of my units I just renovated, I am not sure who you think is going to step up and provide the capital for building / renovating more rentals if new investment from investors was stopped.
1. not yet, half way I am a bit naughty today.1. Glad you finished your chores haha.
2. The demand is for people to own their own homes. A great proportion of renters only rent because they are priced out of buying their own dwellings by investors.
3. The industry works on demand, not who is demanding. If the demand is there, builders will build, it matters not to them whether the buyers are owner occupiers or investors.
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