Negative gearing decision 'hard but fair'

tryagain on 13/02/2016 - 11:40

http://www.skynews.com.au/news/top-stories/2016/02/13/shorte…

I am not a "Labor Person" but I think this isn't really hard but more so common sense, the only downfall I can see is a spike due to people trying to get in before its implemented. I also think it would make sense for the Turnbull government to grab it and implement it this year while there would be bipartisan support, Hockey was once attributed as saying that the easiest savings to implement are the ones the opposition has proposed, doing it for the coming financial year would also limit the time to a point where the a spike would be unlikely. I am interested to hear what the arguments against it would be both from a policy and politics point of view and what people think about it in general.

Poll Options

  • 195
    I think this is a good policy.
  • 97
    I think this is bad policy.
Financial

Comments

  • RobMel on 13/02/2016 - 11:43

    They tried that before and reversed it quickly few years back.
    Pulls out money fast from economy.
    For many mum and dad investors is the only bit where they can get a break, that is 70% of those doing negative gearing.
    You might want to limit it to a fixed amount instead.

    • tryagain on 13/02/2016 - 11:51

      I should have specified the bit of the policy I were referring too would be the limiting it to new houses, it seems like common sense to me. Reducing the percentage would be as you more complex as to the benefits but as you say keeping the percentage but capping it to a fixed amount would probably be fairer option.

    • Stphen on 13/02/2016 - 22:08
      +19

      Mum and dad investors, like politicians? Why do you think politicians protected themselves by stating - "All existing investments under the scheme would be fully "grandfathered" and protected against the changes."

      Figures compiled by property authors Lindsay David, Paul Egan and Philip Soos show federal politicians own an average 2.4 properties each, including their family homes.

      Collectively they own a portfolio of 541 properties, conservatively estimated to be worth $350 million.

      Barry O'Sullivan is Capital Hill's biggest property tycoon, with the Queensland Nationals senator owning 41 properties.

      http://www.smh.com.au/federal-politics/political-news/how-pr…

      • [Deactivated] on 14/02/2016 - 11:28

        Pollies should not be allowed to invest, otherwise we'll keep seeing this biased and "protective" law towards "investors" (themselves). That just common sense.

        • DavidFong on 14/02/2016 - 16:55
          +7

          Should not be allowed to invest in what?

          Houses? Companies? Stocks? Bank bonds? Bank deposits?
          If only allowed the last, their vested interest would be in having high interest rates (both for loans and deposits).

          Almost everyone of moderate wealth would have some level of investment in something other than cash.
          I know it might seem very 'far away' and 'arms length' to most people, but superannuation investments are also typically non-cash investments, and the industrial superannuation fund that I use allows direct investment in individual stocks.

          Better that millionaires become politicians, rather than politicians become millionaires.

        • geoffs87 on 14/02/2016 - 20:29

          That's pretty silly

        • [Deactivated] on 14/02/2016 - 20:32
          +3

          @DavidFong: Invest in the houses. This is something we all need, it's evveryone's basic needs. We shouldn't make it a game of investment for it for the gain of very few.

        • etherspin on 15/02/2016 - 17:58
          +2

          there is always scope for corruption, a corrupt pollie would skirt such a ban by taking money from dodgy corporate types wanting changes to other rules and then they would take a plum job with the corporation after their time in politics winds down.

        • trongy on 15/02/2016 - 22:55

          Politicians' investments should be separated sufficiently so that they do not create conflict of interest between what's best for them and what's best for Australia as a whole.

          This should be easily achievable if they use balanced investment/super fund where the fund manager makes the investment decisions the fund is not heavily biased in favour of a particular industry or economic sector.

        • [Deactivated] on 16/02/2016 - 01:31
          +1

          @grimDazzle: The problem is when housing prices go up because of negative gearing. They are trying to make housing affordable by ensuring that new houses are being built to also advantage the poor.

        • ninetyNineCents on 17/02/2016 - 11:31

          They have to grandfather in old investors because many would go broke without negative gearing and its advantages. It's not a good thing to have tens of thousands bankrupting because of this change.

          Grandfathering is necessAry, we see it in many many other parts of life, old cars don't need to pass modern safety requirements etc.

        • nikey2k27 on 18/02/2016 - 21:38

          Yes one PM own 78 house.

    • macrocephalic on 15/02/2016 - 11:51
      +4

      So tieing money up in non-productive static assets is good for economy now? New houses produce employment, old houses produce nothing.

    • JohnHowardsEyebrows on 15/02/2016 - 13:34
      +5

      It's economically distortionary, providing no benefits to anybody other than the investor (speculator). If mum and dad investors want a tax dodge to help them, they can invest in (new) property, rather than being lazy speculators at the expensive of first home buyers.

  • davlap on 13/02/2016 - 12:07
    +62

    People whinge about not getting their ridiculous tax break, while the rest of us pay rent to them to fuel the massive increase in the value of their house(s). So the cycle begins, have to pay rent due to house price rises, lining the pockets of those with two or more houses, who can go out and buy more overpriced investment houses.

    The argument is landlords are required to provide the high demand for rentals. Why's that? - dohhh house prices are too high. Why's that - investors buy them for tax write offs and capital gains because the prices are going up and people have to rent.

    Fair enough in a dead housing market, but totally off the wall in a runaway housing boom making affordability for new buyers a joke.
    Of course the pollies mostly have houses worth millions and no doubt a few investment properties on the side, so why would they want to change it

      • serpserpserp on 13/02/2016 - 20:12
        +15

        No, house prices will go down because there is no incentive to run your investment at a loss and thus people won't pay a premium for the luxury of negative gearing. People can't just jack up the prices because the rent market affordability isn't exactly at all time highs.

        • Zanadar on 13/02/2016 - 23:08
          +20

          There is never any incentive to run at a loss. Paying tax on profit is still better than tax deducting a loss.

        • nautic on 14/02/2016 - 03:40
          +6

          No, less investers means less houses available for rent, meanining rising rent costs.

        • spurf on 14/02/2016 - 08:39
          +29

          @nautic:
          So what happens to these houses that investors are unwilling to buy? Do they get demolished or do you think they might get sold to an owner occupier instead (likely at a lower price) who then stops being a renter and reducing demand on the renaining rentals.

        • nautic on 14/02/2016 - 10:10
          -1

          @spurf:

          That will be nothing compared to the situation where investers are detered from building multiple rental apartment complexes (often on single block of land) once negative gearing goes.

        • tryagain on 14/02/2016 - 10:20
          +11

          @nautic: If you had read the original article you will see the proposal doesn't affect new building's you will also see in one if the other links posted that the vast majority of properties people are using to negative gear are not new purchases. I think Spurf has the facts on his side here.

        • captobvious on 14/02/2016 - 10:23
          +2

          There will be no reason for an investor to sell out especially if they are grandfathered unless they face financial hardship.

          I can forsee mum and dad investers adopting a cash rental on new properties bypassing agents and ato if there is no incentive to negative gear and offset their tax

        • nautic on 14/02/2016 - 10:27

          @tryagain: Well ofcourse, who's going to rent out their brand new home? But rental apartment complexes - most of these are made for specifically for renting. And who'd want to build a new complex when there is lack of demand when it comes time to sell?

        • tryagain on 14/02/2016 - 10:49

          @nautic: they may not want to rent out their new home (apartment or house) but I can't see a difference between renting out a new investment house or apartment. The percentage of negatively geared new constructions is less that 10%

        • DavidFong on 14/02/2016 - 17:04
          +1

          @Zanadar:

          It is possible that one problem with negative-gearing for individual investors is that there is a potential incentive for the dishonest to claim a substantially greater cost than is actually related to the income-generating investment.

          • rather like those large technology companies which claim almost no profit in Australia! but with far less scrutiny, and unlikely to result in a Senate enquiry.

          The incentive to declare no profit is present even in the absence of negative-gearing, but the maximum declared costs could be limited to the declared revenue

          • negative-gearing also creates an incentive for the landlord not to declare all income e.g. asking for rent as cash-only

          I remember some-one commenting that when the tax-office changed to a system where tax-returns were not individually scrutinized, the system became one where people could "write their own tax refund".

        • Zanadar on 14/02/2016 - 21:53

          @DavidFong: True but this is already the case with individual tax returns so it is negligible

        • serpserpserp on 14/02/2016 - 22:00

          Exactly.

        • serpserpserp on 14/02/2016 - 22:02
          +2

          @Zanadar:

          Yes everyone knows that, but we are talking about negative gearing here. Which gives incentive for people to run an investment at a loss. Take it away, no one runs it at a loss unless they think they are going to get rampant capital gains.

        • Frozensage on 15/02/2016 - 11:30
          +1

          @serpserpserp:
          except those who already have multiple investments since it's only affecting purchases in the future. So really it's not gonna fix anything in the established suburbs, which is the ones that are unaffordable and the ones ppl want to buy into. You can buy new, but most of them are in the middle of no where, with 0 public transport or infrastructure. So it's just another con from the opposition that pleases the poor but not really taking anything from the rich.

        • Zanadar on 15/02/2016 - 14:36
          +1

          @serpserpserp: And there are no rentals for those that need them… yeah problem solved NOT!

          For the rentals that remain they now cost more.

          House prices won't go down much if at all… so the people who "can't" or won't buy still won't…

          It's not a silver bullet.

          If you want to fix things get rid of capital gains tax… that shit is just criminal. You pay income tax to purchase/hold an appreciating asset then when you sell it you pay tax on the profit as well? WTF

        • JohnHowardsEyebrows on 15/02/2016 - 14:50
          +5

          @Zanadar: So your solution to housing affordability and the budget hole is to remove tax entirely, thereby increasing the incentive of property spivs to buy even more houses at the expense of the first home buyer?

          You're off your face.

        • Zanadar on 15/02/2016 - 16:10
          -5

          @JohnHowardsEyebrows: I don't think we need a solution to housing affordability.

          Get a job. Save some money. Have realistic standards and expectation for what you can afford.

        • JohnHowardsEyebrows on 15/02/2016 - 21:24
          +1

          @Zanadar: If you think people should have to earn $150k to get a house near where they live, you're a part of the selfish, greedy problem.

        • serpserpserp on 15/02/2016 - 22:00
          +1

          @Zanadar:

          LOL getting rid of CGT only benefits investors MORE. Certainly know what side of the fence you are from. But if they are going to get rid of CGT they should do away with it on shares. Then Australian's can bubble that asset class instead of houses…

        • serpserpserp on 15/02/2016 - 22:01

          @JohnHowardsEyebrows:

          That is 150k each for a couple you need just to live 10km from the CBD in Melbourne.

        • JohnHowardsEyebrows on 15/02/2016 - 22:08

          @serpserpserp: You don't live in Melbourne or Sydney I take it.

        • trongy on 15/02/2016 - 23:00

          @Zanadar:

          Typically when negative gearing an investment property the idea is to have operating losses (mainly interest on a loan) that tax deductable. The profit hopefully comes through capital gain when the property is sold.

        • Zanadar on 15/02/2016 - 23:11
          -1

          @JohnHowardsEyebrows: Well maybe some people can't afford to live "near where they live".

          These days people don't want to save for anything… if they can't have it now with minimal effort it is too hard.

          I have worked for my success mate. Went to uni, now 10 years in my career and I can finally afford to buy my house.

        • Zanadar on 15/02/2016 - 23:13

          @serpserpserp: Again I reiterate I don't believe there is a housing affordability issue.

          I agree housing is far more expensive than it was when my parents were younger however I don't think it would be fair for the government to manipulate the rules/market in order to reduce house prices when so many people have worked so hard to get the property they have which would then be worth less.

        • JohnHowardsEyebrows on 15/02/2016 - 23:15
          +7

          @Zanadar: And I congratulate you for that. But when 100,000 is felt to not be very much, simply on account of the ridiculous property prices, it's obvious there's a problem. You can buy into this folksy garbage about people not wanting to work for stuff anymore, but the income multiples of houses compared to previous generations - to say nothing of the explosive wage growth that made repayment easy for baby boomers - speak for themselves. It's far too overpriced, and the least the government can do is stop handing thousands of dollars of welfare to people to make investments that contribute zero to the economy, in the process harming young families.

        • Zanadar on 15/02/2016 - 23:15
          +1

          @trongy: Correct, there is generally no profit to be made with negative gearing without capital gains.
          Therefore I think negative gearing is fair.

        • Zanadar on 15/02/2016 - 23:17
          -1

          @JohnHowardsEyebrows: Who says 100k salary is not enough to buy a property? Would have to go out a little further down south (sydney/melbourne) but something could be bought?

          Especially if the brand new car was foregone.

        • Zanadar on 15/02/2016 - 23:30

          @Zanadar: put it this way… why should the government take steps to reduce the value of my property which I have busted my arse to buy (and have a massive mortgage on)… that is how you ruin a man!

        • JohnHowardsEyebrows on 15/02/2016 - 23:56
          +2

          @Zanadar: And I will feel genuinely sorry for any owner occupier who finds himself/herself underwater after all this. Though it's not like the market isn't going to see a correction anyway - people don't hold onto mortgages when they are unemployed for long periods of time, and recessions are inevitable.

          But the artificially high prices currently prevailing are not reason in itself to continue handing billions to speculators. If people want a tax break on their investment, they'll have to now actually either do something (and build), or actually take risk.

        • Powershopz on 16/02/2016 - 07:14
          +3

          @serpserpserp:

          Somewhere decent within 10-12KM from the city is still going to cost you $550-$700K

          Affordable but still a massive investment.

        • Zanadar on 16/02/2016 - 10:00
          -4

          @Powershopz: Yes affordable if you work for it.
          Some people seem to think it should be really easy.

        • Zanadar on 16/02/2016 - 10:01

          @JohnHowardsEyebrows: There is always another supposed recession just around the corner… it's the investors trump card to reduce prices when they want to buy big.

          Truth is we barely felt the GFC.

        • JohnHowardsEyebrows on 16/02/2016 - 10:08

          @Zanadar: Ah yes. This time it's different. :)

        • Zanadar on 16/02/2016 - 11:04
          -1

          @JohnHowardsEyebrows: Time will tell…

        • knk on 16/02/2016 - 11:27

          @Zanadar:

          This is what I'd be worried about, falling property prices and people having mortgages for more than the property value.

          You couldn't even sell up if you wanted to in a situation like that. I'm not sure how far the property value would be expected to fall though?

        • knk on 16/02/2016 - 11:30
          +3

          @Zanadar:

          A 500k mortgage for someone single, on average money is pretty unmanageable in my opinion. For someone earning say 60-70k per year it's going to be a struggle, do-able but not easy. It's all well and good to say on 100k you could afford it, but not everyone has a career with that high a paying job.

        • Zanadar on 16/02/2016 - 12:05
          -1

          @knk: Agreed but you don't need a 500k mortgage to buy a property.
          Save a bit then get a 350k mortgage?

        • knk on 16/02/2016 - 12:07
          +4

          @Zanadar:

          I completely agree that 500k off the bat is a stretch unless you make good money.

          It just sounded like you were saying it was do-able with just hard work and unfortunately it might be out of reach for some people.

          I went with a much smaller first mortgage myself, however I'm 30kms from the city.

        • SeVeN11 on 16/02/2016 - 12:41
          +1

          @captobvious:

          If you bought an investment property, it is unlikely you are still negative gearing 10 years down the track as rent would likely have increased to cover your mortgage payment.

          Nobody seem to have said it, but if NG only applies to new houses, new dwelling will cost significantly more as all new investors will o ly want to buy new dwelling causing the distortion they talk about.

          In addition your first home owner grant for new dwelling will become quite useless because the price of new dwelling will be much higher than before.

          Property developers and builders will love this because they will make more money selling new dwelling due to the increase demand from the change

          If you are an owner occupied you can forget about a dream of a NEW home. You will be stuck in an old home forever or have to pay an arm and leg to renovate it.

          Currently majority of negative gearing are claimed on existing dwellings, meaning there will likely be a huge shift in preference for new dwelling vs old dwelling. You'll be stupid as an investor to buy an old dwelling when you get benefits from buying new…

          This is the distortion some people are concern about. If you are an investor you wouldn't care much.

          I think investors don't really care what the changes are as they will likely make money either eay. It's going to be the mum and dads and first home owners who will suffer. Best way to over come this is to become an investor your self so you don't get left behind.

          i.e. cut back on smokes, booze and trips to Bali or other random places. Defer purchases… No you don't need another Chromecast for that 60" TV that you don't even watch… Stop spending $10-15 on lunches and quit drinking coffee. Man up and drink water or the free tea/coffee/milk at work.

          You need to save more. If you're not saving 10% of your gross houshokd income you're going to be in the poverty cycle for life. You need to increase that to as high as humanly possible. Meaning if you get a pay rise, don't spend it… You should Dave all of it. I.e a 10% pay rise should result in a close to 5-10% savings increase (less taxes).

          Good luck.

        • JohnHowardsEyebrows on 16/02/2016 - 12:42
          +3

          @knk: And $500k these days means outer suburban fringe.
          It's easy to say people need to work hard, but today's first home buyers have to work a whole lot harder than their parents.

        • Zanadar on 16/02/2016 - 13:51
          -2

          @knk: Well done! Going a bit further out is exactly what first home buyers should do.
          Problem is many won't - oh well their problem.

        • Zanadar on 16/02/2016 - 13:51

          @JohnHowardsEyebrows: Agreed. But again I don't see this as a problem.

        • JohnHowardsEyebrows on 16/02/2016 - 13:55

          @Zanadar: Do you work in the CBD? How long is your commute?

        • Zanadar on 16/02/2016 - 13:57

          @JohnHowardsEyebrows: Not that I think it is relevant. Yes I do… About 45 minutes… BUT I live in Brisbane

        • JohnHowardsEyebrows on 16/02/2016 - 14:00
          +3

          @Zanadar: The point is entirely relevant.45 is OK, which is probably why you don't understand the impact this combination of house hoarding and NIMBY planning controls is having on people who have to work in the CBD of Melbourne and Sydney. Losing 2/3 hours a day just on commuting is a tax on people's lives.

        • Zanadar on 16/02/2016 - 14:22
          +4

          @JohnHowardsEyebrows: May I suggest that better public transport is the answer here?
          While there is demand for property the price will be high.
          The demand isn't going anywhere.

        • JohnHowardsEyebrows on 16/02/2016 - 15:04
          +1

          @Zanadar: Ever heard of this abstract thing called supply?

        • Zanadar on 16/02/2016 - 16:00

          @JohnHowardsEyebrows: There is plenty of supply out a bit further…

        • JohnHowardsEyebrows on 16/02/2016 - 16:31
          +1

          @Zanadar: So you're insisting people lose three hours a day commuting.

          There are solutions to life's problems - but some people just aren't interested in solving them.

        • Zanadar on 16/02/2016 - 18:30
          -3

          @JohnHowardsEyebrows: Absolute rubbish that it takes 3 hours on public transport to get to work from affordable housing.
          Get your head out of the sand and stop being so hard done by.

        • JohnHowardsEyebrows on 16/02/2016 - 18:37
          +3

          @Zanadar: Three hours a day - means 1.5 hours each way. I've done it, I now live near the city, so I don't feel hard done by - I just give a shit about people other than myself (and things other than the value of my assets).

        • captobvious on 16/02/2016 - 19:13

          @SeVeN11: Bali? Who the (profanity) wants to go there? What a dump

        • Powershopz on 16/02/2016 - 19:47
          +2

          @Zanadar:

          I'm sure he means 3 hours total a day and that's more so driving. It drastically depends on the suburb. There are some suburbs 20-35km out that have great public transport and you can get to the city in 35-45 mins. Others though, you're hard done and facing a 10 min drive to the station first or need to drive in.

          You're perspective is from Brisbane, completely different to Melbourne/Sydney.

          What you can get in Brisbane for 550K you'll be paying 800K for in Melbourne/Sydney if not more.

          A booming area in Victoria is the western suburbs near Werribee/Point Cook. You can get a 4 bedroom house on a 500 sqm block for around 500K. However you are then facing a one hour work commute to work every day.

          If you want a 30 min work commute in Melbourne expect to pay ~600-800K for a 4 bedroom on a 700 sqm block.

        • serpserpserp on 16/02/2016 - 20:02
          +1

          @Zanadar:

          Problem is that you could be a GP earning 100-150k 20 years ago, that wage bracket hasn't really changed and now houses are triple the price. So…. Yeah it use to be easy for Baby Boomers and the like and now it isn't easy at all for Gen Y etc.

        • serpserpserp on 16/02/2016 - 20:08
          +1

          @JohnHowardsEyebrows:

          Actually I just finished living in Sydney for almost a decade and have just returned back to Melbourne to live and am looking at places in Coburg and beyond to buy that are going to cost me at least 600k for something decent (because I have a family).

          Oop there it is.

        • JohnHowardsEyebrows on 16/02/2016 - 20:11

          @serpserpserp: Coburg - so an apartment? In a safe area, no doubt…

        • serpserpserp on 16/02/2016 - 21:18

          @JohnHowardsEyebrows:

          And north of there. More than 10kms out, very expensive. Weren't you making the point that I was thinking Melbourne prices were too expensive?

        • serpserpserp on 16/02/2016 - 21:26
          +5

          @SeVeN11:

          LOL listen to it. I don't drink or smoke, haven't had a OS holiday in years, 10 year old LCD TV, no chromecast (lol as if that makes a difference) $10 on lunch a work day for 3 years would net you close to 10k, not even a drop in the ocean, a $4 coffee a day even less, none of this stuff is going to get you 150k/20% deposit for a run down house 15 to 20k from the CBD in 3 or so years.

          People seem to think that saving a 100k is easy. Yeah if you are privileged enough to live at home and work and are single, but for most working class families saving a 100k is easily a 7 to 10 year proposition (of hard saving) and in that time with the rate of capital growth in housing prices would have tripled again!

        • ThadtheChad on 16/02/2016 - 23:45
          +2

          @Zanadar:

          I think you have a fairly poor frame of reference if you're basing everything on your experiences in Brisbane.

          As an example, Central Coast (~1.5-2 hrs) commute one way, is already quite expensive (exceeding the 600k price point for a decent residence). Traveling 3-4 hours a day is a significant reduction in personal time (and may not be worth it if you have familial commitments). Especially considering that public transport can be problematic due to track-works or poor frequency. Sometimes there is a single service every hour which means you're shafted if you miss the train. Moreover, if you're in an industry where you may be required to work a bit late occasionally (fairly typical for IT jobs), catching a cab home would mean a fare of over $150.

          All in all, a fairly significant impact on the overall quality of life.

          The median income in Sydney is about 70k, so for a person to be able to afford a reasonably decent place, with a reasonable commute (30-45mins), they would have to save about 50k + LMI + stamp duty (~100k) to be able to afford a 500k single bedroom unit. Doable, but significantly harder with the rate at which property is appreciating (trying to catch an aircraft that's taking off, while on a wheelchair).

        • JohnHowardsEyebrows on 17/02/2016 - 00:16
          +1

          @serpserpserp: I'm the one saying Melbourne prices are too expensive…. (and Sydney, and to be honest, anywhere in a capital city in the country, even Adelaide or Hobart exceed what they should given local economics. It's only in run down bush towns outside of commuting distance where houses can be had cheaply.

        • lord henry on 17/02/2016 - 01:50

          @SeVeN11:

          Surely an investor would be incentivised to purchase existing house stock if they are positively geared - it would be an even better proposition because the price may be slightly lower.
          Only negatively geared property investors would be pushed to new housing stock.

          It would make property investment less attractive to small investors, but wouldn't affect large investors so much.
          This could also have advantages in more longer term renting options available. With every second property owned by a couple that isn't as interested in making a return on the rental income or keeping tenants long term (just chasing capital gains), rental terms are set much shorter than in other countries. This could benefit renters.

        • Shutterfish on 17/02/2016 - 22:32

          @serpserpserp: try Brisbane. Better weather cheaper house price!

        • whoopdeedoo on 18/02/2016 - 02:01
          -1

          @Zanadar:
          hear, hear. bunch of self entitled whingers lately.
          why penalise those who are being accountable for their futures?

        • serpserpserp on 18/02/2016 - 14:28

          @Shutterfish:

          Sydney was hot enough for me, I was raised as a yougin in QLD and I can say I wouldn't enjoy the strong humidity 24/7 there!

        • brentsbits on 19/02/2016 - 00:03

          @Zanadar:

          You have got to be kidding me. 100k salary is actually quite a lot. The average Australian individual wage, before tax, in 2013 was $57890. It won't have gone up much by now.

          I am doing a five year degree and the average wage for people who have the qualification I'm studying for? $55,000. These are people who are entitled to be called "Doctor". Not an MD but you would still expect them to be a reasonable indicator of a good wage. Let me be clear though, this is the average wage of the profession in Melbourne (as employees, not business owners which takes years to develop sufficient reputation to do). It is not the average wage for graduates of the degree, it's the average over the whole profession.

          So even if you are saying $100k makes a house affordable, it's far more than the average Australian is earning and I don't mean the average person holding down an unskilled job, I'm talking those who are skilled and highly trained as well.

        • brentsbits on 19/02/2016 - 00:06

          @Zanadar:

          And there it is.

          You don't support the negative gearing etc. because you think it is right, moral and ethical to have negative gearing. You support it purely for your own self interest. At best you support it because you have a myopic view that if it is good for you, it mustn't be bad for others and that they are only worse off because of some kind of lack of gumption on their part.

          So tell me this? Did you walk uphill to school? Both ways? In the snow? How much was bread when you were younger? Was everything better back then? Did kids respect their elders properly? Could you leave your doors unlocked and not worry about getting robbed?

        • serpserpserp on 19/02/2016 - 21:19

          @brentsbits:

          What industry/profession are you talking about?

        • Zanadar on 21/02/2016 - 15:04
          -1

          @brentsbits: yeah ok you want to punish those that have worked hard for what they have got… makes sense… NAWT

        • JohnHowardsEyebrows on 21/02/2016 - 19:46

          @Zanadar: You want to avoid your obligations to pay tax, and don't mind a) pushing the tax burden onto every other taxpayer who doesn't dodge tax with negative gearing, and b) screwing young people by outcompeting genuine home buyers. And you do this all so you can get an easy ride to riches.

          You're nothing but selfish, using some flimsy notion of 'hard work' to justify screwing the younger generations.

        • Zanadar on 22/02/2016 - 11:15

          @JohnHowardsEyebrows: haha ok i'm done… "tax dodges"… really? come off it

          You talk as if I have not worked for what I have got and therefore I should voluntarily give it to others who have not worked for it.

          You sir are a clown!

        • JohnHowardsEyebrows on 22/02/2016 - 12:25
          +1

          @Zanadar: You act as though you're entitled to pay less than your fair share because you were born at a fortunate time.

          And you're incapable of responding to the substance of an argument.

        • Zanadar on 22/02/2016 - 13:03
          -2

          @JohnHowardsEyebrows: haha your argument's content consists of "poor me" and "you don't pay your share of tax"… both of which are incredibly narrow sighted.

          Your definition of fair share is certainly skewed. I would bet I pay more tax than you as you have a seemingly entitled view therefore I must assume you earn less than average or are fairly young.

          I can assure you I pay my "fair share" of tax and when I was born has nothing to do with it.

          I do my taxes according to the tax law. The same tax law that was in place when I made a decision to purchase an investment property. Changing these laws so that house prices can be artificially reduced (thereby penalising me and my investment) is unfair.

          Robin hood much.

        • JohnHowardsEyebrows on 22/02/2016 - 13:08
          +1

          @Zanadar: I sit in the second highest bracket, neither rich nor poor. I certainly don't engage in loss making activities to avoid tax,and when I invest, I actually have the balls to take risks, unlike property speculators like you.

          Nothing you've said negates my critique that you were simply lucky to be able to get on the property ladder cheaply, and now expect other taxpayers to subsidise your further accumulation of property.

          Selfish personified.

        • Zanadar on 22/02/2016 - 13:16

          @JohnHowardsEyebrows: I wouldn't say I got on the property ladder cheaply… I would say I got on at the market rate of the time. If that means I paid a higher price than what you say it should be, why should I be penalised (by prices being manipulated through tax reform)?

          Speculation is indeed a method of investing… same as when you buy stocks etc. I don't see the issue here.

          It's not about being selfish. I am simply against reform that would intentionally manipulate (reduce) prices.
          Because that penalises peoples who have previously bought in the same market.

        • ThadtheChad on 23/02/2016 - 10:15

          @Shutterfish:

          …not much of a job market though.

          Very tempted to be honest.

        • tunzafun001 on 09/07/2016 - 19:20

          @JohnHowardsEyebrows: Final kick in the balls for me in Whyalla. Ive busted my nut to get a roof over my head and some investment security for the future. Without an offset I won't be able to make the payments on the combined mortgage. Surely a cap on negative gearing will do for the Uber expensive metro areas, or simply no deduction while occupied. As the rent is simply the incentive. If you're happy to purchase and leave unoccupied for potential gain, then good luck. But houses still need maintenance other wise it will become a vandalised squatters rat nest

      • burningrage on 14/02/2016 - 16:11
        +4

        Elektron is right. So i dont know why he got negged.

      • Flet on 15/02/2016 - 08:32
        +13

        That rents rose when negative gearing was quarantined in the 80s is a lie repeated often by the property industry on the basis that if a lie is repeated often enough it will be accepted as true.
        See the graph in this article:
        http://www.macrobusiness.com.au/2016/02/the-alps-negative-ge…

        "The ABS rental data clearly shows that real (inflation-adjusted) rents did not rise nationally over the period that negative gearing was quarantined"
        "Moreover, at the capital city level, real rents either fell or were flat in every capital city, with the exception of Sydney and Perth, where vacancy rates were particularly tight at the time"

      • JohnHowardsEyebrows on 15/02/2016 - 13:36

        The stupidity in your statement is to imply that landlords are keeping rents down on account of the tax dodge. In fact, they are taking all they can. They're just willing to bid more for houses given the likely rental yield (an uneconomic 3-4%), as they know they'll get a tax dodge to cushion the blow on their way to a capital gain.

        The myth has been busted.

      • Brianqpr on 15/02/2016 - 14:36
        -2

        Nice scaremongering there.

      • ninetyNineCents on 17/02/2016 - 11:32

        Proof ?

  • CyberMurning on 13/02/2016 - 12:38
    +7

    Renters will be Renters forever. never able to save money to buy house because salary increase less than house price increase. Also 20% cash deposit is way too big for average Australian to have.

    • Diji1 on 13/02/2016 - 13:14
      +30

      Incorrect, there is a lot of cheap housing in Australia. No one wants to live where it is.

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