Tl;dr: Netherlands cuties considering a ban on investors snapping up properties and renting them out.
33% of recent home buyers are investors in Netherlands. Does anyone know how much % of recent home buyers are investors or occupiers?
https://nltimes.nl/2021/09/02/dutch-cities-want-ban-property…
due to the number of dullards in here that don't have a pair of brain cells
Brilliant Luv yah :)
And +1 Upvoted .
10 years, most of those demanding this social equity want it NOW.
To plan and save for 10 years is probably close to half their life on the planet.
Oh and if it wasn't for investors taking huge risks and buying homes to rent to people at much less than the cost of the mortgage, where would most of you live?
Investors invest in their own self interest, don't act like they're Samaritans. Housing prices would be much lower and we could be paying for a mortgage instead of rent.
number of dullards in here that don't have a pair of brain cells to actually use to research the tax
Wow the arrogance here is palpable. It doesn't mean people are idiots if they don't know something you find simple.
housing prices would be much lower and we could be paying for a mortgage instead of rent.
In 1947 about 53% of people owned their own home. By 1954 that was 63%. its currently around 66%
In other words, for the last 70 years about 1/3 of people have rented a house, even when prices were lower etc. Do you actually believe that if we took away investment properties, people would change their habits of the last 70 years and all start buying?
It doesn't mean people are idiots if they don't know something you find simple.
It does if they are arguing about the issue. If you dont know something but decide to argue about it anyway, seems to be a good indicator that you are lacking something brainwise
In 1947 about 53% of people owned their own home. By 1954 that was 63%. its currently around 66%
You're misrepresenting the actual figures by jumping 70 years. The years between 1960 and 2006 (46 years) remained stable at 70%. It has drastically dropped by 4% in about 15 years, whereas it barely changed by more than 1% in 46 years.
The biggest difference is that in the 80s, 60% of 25-34 year olds had their own home. That age group has had the biggest decline in home ownership rates down to 45%.
It does if they are arguing about the issue. If you dont know something but decide to argue about it anyway,
I work in healthcare so this is a daily occurrence. I'm sure people who work in retail and hospitality would also agree.
Also, despite however Capital Gains Tax works, it still benefits the richest the most.
https://i.imgur.com/dB9FpEi.png
Source:https://www.acoss.org.au/wp-content/uploads/2016/04/Fuel_on_the_fire_ACOSS.pdf
You're misrepresenting the actual figures by jumping 70 years. The years between 1960 and 2006 (46 years) remained stable at 70%. It has drastically dropped by 4% in about 15 years, whereas it barely changed by more than 1% in 46 years.
In the 1960s, yes it was 70%. It fell to 68% in 1976, in 1981 it was 68%, in 1986 it was 70% but in 1991 it was 67%, in 1996 it was 69%. Its now 66%. It bounces around a few percent at at time. Not to mention that I can mount a very easy argument that people today are far more mobile than they were in the 1990s or 1970s and hence frequently do not want to buy a house; as they are frequently changing work locations or FIFO or just dont want a house as a different mindset to the 1970s. What percent does that account for? 1-2% maybe?
The points being (which I pretty clearly stated but you then turned it into a completely different argument) its always been the case that a substantial proportion of people rented, even in the so called halcyon days when you could buy a house with a penny and working 2 hours a week, or whatever
So if you took away rental properties, you are taking away the type of property that about 1/3 of people across the history of post WW2 Australia have used. The fact that people rent is not because investors have stolen all the houses those people would otherwise be buying
@dtc: I'll just put the graph here. I find them easier to understand.
https://imgbox.com/PEtON2yK
No one is arguing to take away rentals. They are important. People are unhappy because they want to buy and are saving with a double income household but cannot afford it, whereas our parents and grandparents were able to buy houses off a single income without much hassle.
Australian Financial Review backs up the claim that investors are hoarding houses.
"With the inclusion of vacant rental properties, the city's total vacancy rate was 4.7 per cent, Prosper said.
Investor-owned properties had a vacancy rate of 16.1 per cent, little changed from the last report."
https://outline.com/hcaE9g
I think you are missing something here. I think the 50% capital gain discount is replacing the indexation method, which was there to take into account inflation/CPI.
https://www.ato.gov.au/forms/using-the-capital-gain-or-capit…
The fairest method would be the one that takes into account your yearly income since you owned the asset for how many years it takes, and tax the capital gain accordingly. It does not have to be exact, but a single number (ie 50%) is unfair.
And they need to allow asset swap as well.
I used to see it like this: hard work income (salary) is taxed at 100%, risky investment is discounted 50%, easy money aka gambling and lottery aka very high risk "investment" is not taxed at all.
what is the point of this thread again?
Yes, everyone should be forced to buy their own home………………… or maybe consider that these investors provide a very essential service.
Its true, if investors are banned, it literally means no renting and it forces everyone to buy their own home. Not everyone can get together the money for a deposit, even with lower house prices.
That's not true. Renting is still possible through public housing.
26% of people are renting privately compared to 4% in social housing.
It's not realistic for the government to provide for all the renters given how much they take in tax revenue vs the cost of housing. Plus if the government did try to do that, a lot more people would prefer social housing to buying a house.
@acersaurus: Public housing wouldn't be for free you would still pay rent and maintenance costs. If it followed the same style as Austria your rent would be based on your income, so if you make a lot of money it would be better to own than rent.
There would be only an initial investment for the government to build or buy the housing after that it wouldn't incur any operating costs. That would all be covered by rents. High-income renters would make the system even cash positive.
Vienna city owns 25% of all housing, so it is definitely possible.
I guess you are unaware how much 'public housing' is outsourced to private investors. Plus ADF and gov't style housing, plus remote worker housing etc. And who is gonna pay for all this 'extra' public housing anyway? You wanna subsidise housing for half the population, or are you asking to be subsidised?
@tonka: Yes, it is not perfect, and it will cost money, but it is nothing compared to other expenditures the government has.
Do you realize the implications of having an entire generation struggling to afford a house? Birth rate is already pretty low because nobody wants to be raising a family in a 1-bed room apartment that they are renting.
@Mistredo: If it's $600,000 a dwelling (slightly below the median house price in Oz) X 2.6 million rentals ( the number of private rentals in Australia) my calculator says it would cost 1.56e12
Anyway I calculated it would be about $106,000 per tax payer (of 14.7 million tax payers). Quite a lot, and the tax payers who aren't getting the public housing may be a bit upset.
@Mistredo: Yes I realise the implications, I made the necessary sacrifices to buy a home (that many posters here seem to want handed to them) . Every generation has struggled to make that purchase, some of us with 18% interest rates, and recessions, high unemployment, no subsidised childcare and no first home owners bonuses.
If you want cheaper housing, than get your govenment to build more housing, simple. Supply and demand will sort it out and it becomes a buyers market.
No need to be making out the people that have been supplying the very necessary rental market are the bad guys. I have a very cheap investment unit. The people in it (for 20 years) have made no attempt to get jobs, buy their own place or even learn english. While I've been working 60 hour weeks the whole time to finance that unit. It's maybe doubled in value in that time, and if I sell it I'll lose 25% of that in tax. Now if I need it I can't get any social security, I won't get a full pension because it's means tested, yet I don't actually get any income from it. And yes I feel like a chump and regret even bothering. I've screwed up my work life balance so others didn't need to bother even trying..
Like Scalpers at the Concert !
What service do they actually provide?
Just an essential to survival one……..shelter. Are you a home owner?
Investors don't build houses, they profit off people living in them, they offer no service beyond minimal legal requirements i.e. fixing water.
Investors have the highest percentage of homes unoccupied at 16%. I would like to be a home owner one day but changes need to happen so that people can actually live in the houses that have been built.
Anyone who is the actual problem with 4+ investment homes will set up a trust or something else to skirt the rules. Your run of the mill middle income jocks with 1 to 2 additional houses beyond what they live in aren't your problem.
Skirt the rules?
Go talk to your accountant and ask "how do I skirt the rules?" You cant! Trusts have some advantages but they are not a way to pay less tax or avoid capital gains.
@OnAWhimTwo - You need to speak with the right accountants. AKA Kerry Packer style.
oh sweet summer child, there's always ways.
I am going to add another comment here while I am still pretty pi$$ed off.
Do you think investors drive the cost of housing up? Is that your thing?
Consider that an investor ultimately wants to make money. that means they are trying to get the lowest price they can, not the highest. Investors are more likely to walk away if the property price does not make sense.
However developers who want to put 16 units on a block that used to have one house on it. Now they are the ones who push the prices up. They are also the ones who grease the palms of local councils and politicians.
If you want to get angry, vent some anger towards them and stop buying their shitboxes with tiny rooms.
It sounds like they are also investors. So yes they are driving up prices.
Also simple supply/demand. More investors = more demand.
I recommend that instead of banning property investment altogether we should limit the amount of property a person can own. And apply 100% cgt on non-Australian citizens. I had to rent out my apartment for 5 years at first and live with my mum because I couldn't afford to live it in.
Maybe we will see a rise in multi generational living. Pooling resources with the parents/siblings to buy a bigger house in a better area. Pretty common in other cultures. Smart if you ask me. Don't be stressed to move out once you turn 18 unless you really have to. Live with parents if possible and save up for a deposit is the smarter play.
You don't need to ban investments. They just need to be disincentived as cash cows for the well off.
The negative gearing scheme is an outdated program which was meant to take tax payers money and pump up the slow housing market and promote new houses being built. It was meant to be short term but it has ended being too good of an investment for people and has lead to the rich becoming richer and the poor and young being further locked out of the market with each year.
Negative gearing takes away billions of tax payers money each year to put into the pockets of people with multiple investments whilst the investments also increase in value at sky rocketing rates.
Moving negative gearing to new houses only and current houses being grandfathered off the system would not cause a massive hit to the market. But the politicking of it all by the libs means it will won't happen until the bubble bursts and middle incomers who rely on it as their main source of investment or people using houses as their SMSF will be left in the poor house, while again the richer with a varied portfolio will not have a massive hit.
Labour tried to campaign on affordable house prices at the last election but was killed by the Murdoch press and the fear mongering got to the property owners and single house investors who believed the value would "plummet" thanks to an effective smear campaign.
Because Labour lost the unlosable election with the attempt to change it .
No political party will bring it to an election any time soon .
Hands off my franking credits!
Negative gearing should go, if people choose to operate a losing business hoping that it will increase in value, that's a business decision, but franking credits should stay…..I was voting labour till they wanted to abolish franking credit and tax people twice….I don't have many shares but didn't make any sense to me. So I just wasted my vote.
@BestofOZB: Yes the franking credits would have put a dent in some people's SMSF income but the plan was to make the system more sustainable for everyone in the long term.
This is the problem with politics, everyone has to be made happy all the time or else the one small group who isn't will kick up a stink and make it seem like everyone is worse off.
Just like the negative gearing issue. Franking credits were designed to help people in need by encouraging a varied investment but have become a tool to increase and maximise profits at the cost of everyone else.
@Herbse: Every time I hear people advocating the removal of negative gearing and franking credits it is clear they have absolutely no idea what they actually are.
Franking credits are credit for tax already paid on profit by the company, which shouldn't be taxed a second time when distributing it to the shareholder. Franking credits are there to stop double taxation, literally paying tax twice on the same profit.
Negative gearing just means taxing the profit and not the revenue for the individual, just like it is for a company and every other structure. It isn't a tax break, it is just normal taxation - tax profit not revenue.
If you remove franking credits and/or negative gearing for individuals, everyone will just move to a company structure, trust or some other structure because you are making a special rule that hurts individuals that is different than every other structure
It will achieve exactly nothing. In fact it will probably just have a negative effect on mum and dad investors who don't understand what negative gearing and franking credits actually are.
Just for the downvoters, why? Do you not understand or do you just not like the reality of the situation?
@dave999: Both are an extra tax cut on profitable investments. They were both designed to help boost those sectors when investment and the market in them was low. This is now no longer the case. The housing market is extremely profitable on its own without also needing a tax benefit which takes away billions from the country. Money which can go into health and education.
Yes they take away from those groups. It's a negative result for anyone with those investments. But the point was that these people have benefited and profited from it at the expense of other tax payers.
@Herbse: Negative gearing is not a tax benefit or a tax cut, it just being treated the same as everything else.
I'm not against more tax for property owners, its just removing negative gearing is useless and in fact completely stupid, it actually makes no sense. It can easily be avoided because it would be an exception not the rule. It would be like an inverse loophole - everyone would just avoid it.
If you want more tax on property investors just increase land tax, there is already a tax that does exactly what you want - it exists for exactly the purpose you are describing - it is called land tax, it already exists, just increase it.
Franking credits are credit for tax already paid on profit by the company, which shouldn't be taxed a second time when distributing it to the shareholder. Franking credits are there to stop double taxation, literally paying tax twice on the same profit.
Except a company is a completely different legal entity to a shareholder. shareholders want to take the benefit of having a company as a separate legal entity (for example, take the profits but not be responsible for losses). If you are prepared to say that a company pays tax on your behalf, then equity says you should be liable to pay the companys debts as well. Cant just take the income but not be responsible for the losses.
Secondly, as separate entities, why is one person giving money to another person in return for an investment (ie a company pays a shareholder in return for the shareholder investing in the company - essentially lending if not giving money to the company) not a taxable event? There is a profit obtained by the company. There is then a profit obtained by you. Two completely different entities. If you think they are the same entity, see point 1
Do you not understand or do you just not like the reality of the situation
Pot, kettle.
@dtc: It's like when I buy something from the shops, I get charged GST. But the shop also paid tax on the same item when they bought it from the wholesalere, and they paid tax when they got it from the manufacturer, and so on and so on. Everyone gets taxed at every level and that's just the way the cookie crumbles.
The franking credits are a special benefit given only to these specific people and now governments are afraid to do anything about it.
@Herbse: That is the complete opposite to how GST works. You get charged the GST, the seller collects your GST, then the seller totals up the GST it received then minuses the GST it paid. This continues down to the original producer.
In essence the GST is only paid once in total, it is just split between all the steps from wholesaler to consumer. It is not paid in full at every step, only once in total.
It basically is the same for franking credits. Tax on profit, just like the GST is only paid once, not twice or more.
@dtc: Mate, that is just a mess of convoluted gibberish with a nonsense conclusion.
Except a company is a completely different legal entity to a shareholder. shareholders want to take the benefit of having a company as a separate legal entity (for example, take the profits but not be responsible for losses). If you are prepared to say that a company pays tax on your behalf, then equity says you should be liable to pay the companys debts as well. Cant just take the income but not be responsible for the losses.
The tax is on the profit, liability has nothing to do with it.
Secondly, as separate entities, why is one person giving money to another person in return for an investment (ie a company pays a shareholder in return for the shareholder investing in the company - essentially lending if not giving money to the company) not a taxable event? There is a profit obtained by the company. There is then a profit obtained by you. Two completely different entities. If you think they are the same entity, see point 1
You are horribly confused, if it was a loan the interest would reduce the companies profit. This exactly proves why it would be double taxation. If it was a loan and interest it would be taxed once to the person who received the interest, for the company it would be a tax deduction.
Pot, kettle.
LOL
@dave999: If you want to claim that a company pays tax on your behalf, then how can you logically argue that you are not responsible for paying liabilities on behalf of the company? Or does it only work one way - its your money when its a profit, its the companies money when its a loss?
@dtc: You are in all kind of confusion here mixing up losses and liabilities. Tax is paid on profit, losses can be accrued to offset future profit. The liabilities are generally on the company because that what lenders are happy with, in smaller companies often the lender does want the shareholder to take on the liability through a guarantee.
Nothing you are talking about has anything to do with franked dividends.
@dtc: Hold up
Secondly, as separate entities, why is one person giving money to another person in return for an investment (ie a company pays a shareholder in return for the shareholder investing in the company - essentially lending if not giving money to the company) not a taxable event? There is a profit obtained by the company. There is then a profit obtained by you. Two completely different entities. If you think they are the same entity, see point 1
Buying shares is not lending or giving money to a company. It is buying partial ownership of a company, Dividends are the owners share of the profit. So, why should my profit in my company be tax then tax when I receive it too?
(I will say it is an actual issue in pension phase super funds as their investment income is not taxed so it does just end up with 0 tax being paid rather than the persons marginal tax rate)
Ok so how do you win Monopoly if you can only buy one and you can’t rent another place out?
https://en.m.wikipedia.org/wiki/Monopoly_(game)
Monopoly is derived from The Landlord's Game created by Lizzie Magie in the United States in 1903 as a way to demonstrate that an economy that rewards wealth creation is better than one where monopolists work under few constraints and to promote the economic theories of Henry George—in particular his ideas about taxation. The Landlord's Game had two sets of rules originally, one with taxation and another one mainly based on current rules. When Monopoly was first published by Parker Brothers in 1935, it did not include the less capitalistic taxation rule, which resulted in a more competitive game.
I don't understand all this hate towards property investors…..it's a business…..work hard, save money, buy a property, rent it out. Just like you work hard to open a business.
What's next, should we ban car rentals, or food businesses?
I worked hard for my investment properties. Shouldn't have to feel guilty about it.
It isn't a business and calling it one is silly. For one thing you don't have to obtain an ABN to own an investment property. When you own an investment property you don't cater to potentially thousands of people, you cater to a family or something a maximum.
Calling it a business IMO spits in the face of everyone who starts their own business. Starting a business takes much more courage, work, risk and general know-how than saving up some money and buying an investment property. It isn't as sophisticated and shouldn't be conflated with starting a business, and I'm sure many property investors would agree.
You missed my point…..completely….
And if you think buying an invetment property is just as simple as saving a deposit and buying any property, you either don't have one, will never have one, or will do very poorly.
Investment in properties needs a lot of education, hard work and courage……and…..most successful investors actually own them under ABNs…
oh to be as courageous as a landlord…
Investment in properties needs a lot of education, hard work and courage
this is a joke right
@[Deactivated]: If it didn't take a degree of those attribute, then everyone would do it and there would be nothing to complain about from those without the courage or committment.
@[Deactivated]: Go out and try to have 5 or 10 investment properties without education, hard work and courage and let me know how you go.
I say ban the housing investors!
For too long investors and speculators have bought and bought and driven up housing prices to no end. People can’t afford to purchase a house because it’s been speculated to death by the greedy.
Then you have the people rushing to migrate to Queensland and WA…. COVID refugees that had sold their overpriced properties, gotten a ton of cash from their investments, then gone on to buy in those safer states. Hefty ridiculous monetary offers given to real estate agents in order to price out locals, who now can’t afford to buy a house in their own LGAs because of these rich southerners.
It’s time to end negative gearing, housing investments and all this unequal crap that plague Australian society.
A fair go. Fair dinkum. Make property investment illegal.
Let the next generation be able to afford a house.
Bring back Australian values.
Let the next generation be able to afford a house.
Don't worry some will inherit the good work of the Baby Boomers :)
Further increasing the divide between better and worse off communities.
The rich get richer.
Ban investment unless the person is either a citizen or permanent resident of Australia and has lived here 5 or more years.
no communism please 🤚🛑
Look at Sth Korea non friendly Covid housing crazy high prices is the reason housing here still has a long way to go to the moon .
I found this podcast pretty interesting to listen to a couple of weeks ago that's related to property prices in Australia.
The fact is housing is becoming extremely unaffordable for many in the major capital cities of Sydney and Melbourne and less people these days own their own property compared to 20-30 years ago, and it's been going downhill ever since. Some people seem to be okay with this.
Some people seem to be okay with this.
Sure — anybody owning a house (or with a mortgage with improving equity by the day). Investment properties or otherwise.
There is so much personal equity tied up in houses that it’s almost impossible for me to see the day when the majority want houses to be affordable (again?). If one could buy a small, modest, environmentally-responsible dwelling at significantly less than what others have paid in the past… well you know what happens on OzBargain when that day comes, haha.
Some statistics because you are a bit off with your suggestions:
https://www.savings.com.au/home-loans/investing/many-aussies…
TLDR:
The average Aussie property investor will probably:
The simple answers
1. Increase supply. Compel local govts to rezone a certain amount of land to cater for x% increase in dwellings every year.
2. Decrease demand. Reduce immigration from c300k per year. Or at the very least place a link between 1 and 2 that says immigration can only happen when there is a surplus of available property.
3. Stop egregious taxes. Stamp duty, Section 94, environmental levies, etc, etc
4. Cut the red tape. Make it easier to get approval for building and lower the number of compliance issues that must be met.
The chances of any of this actually happening (except SD)? Pretty much zippo when the people who could make this happen know that it would reduce their personal cap gains.
SD will be shown the door when the market comes off it's tops. Land tax was always a more equitable solution if you have to tax real estate at all.
Well with number 2 we have sure done that. No population growth for 18 months, whilst housing supply has continued to increase substantially. I think in the long run this will have an impact.
With number 1 they have this in Victoria and have for many years - requirement of a minimum 15 years supply in each LGA. Not sure about the other states.
No population growth for 18 months
I read somewhere that something like 600k expats have returned home since COVID began. This would help explain the strong demand for properties.
requirement of a minimum 15 years supply in each LGA
I'm in Sydney so not aware of how things work in Vic. Does that mean that developers can build on all of those 15 years worth of properties today? Or are they rezoned slowly over time. My point is that there should always be more supply than demand to keep prices in check with reality.
Most migrants rent when they arrive for many years to save and buy a property. They're pretty much in the same shoes as new job seekers. This isn't the early 00s when migrants were buying property. Have you been to a recent auction or sale? It is your typical elderly couple or working couple
Cut red tape?- that worked well for the leaning towers in Sydney
Stop taxes? That's just going to encourage investors to buy as well.
The councils are rezoning lots of areas to ensure the building market keeps ticking.
How about a simple rule like 20percent of your pay has to go to a deposit saving instead of booze parties and shenanigans
Have you been to a recent auction or sale?
No. But it doesn't really matter. Whether renting or owning people still need somewhere to live and that is demand.
that worked well for the leaning towers in Sydney
I'm all for private certifiers but not the way it has been applied to some properties. There appears to be a gross lack of checking whether the certifiers are doing their job professionally and following regulations. There needs to be serious penalties for dodgy certifiers.
Stop taxes? That's just going to encourage investors to buy as well.
Lowering taxes on properties brings the cost down and that benefits owner occupiers as much as investors. Increasing supply and lowering demand takes care of unrealistic capital gains that drive many investors into the market.
The councils are rezoning lots of areas to ensure the building market keeps ticking.
Way too slowly.
How about a simple rule like 20percent of your pay has to go to a deposit saving instead of booze parties and shenanigans
The last thing we want is more laws and more govt interference. Having a 20% deposit may be a good idea but it's probably more up to the lenders to decide what LVR fits their risk profile.
Yeah this is just a neat little mashup of terminal libertarian brain and racism. It's so played out.
how is it racist?
Care to explain the racism accusation?
nah, I'm good.
@chunksandwich: Typical.
There's no shortage of people who upon finding an opinion they disagree with think that throwing out the racism accusation automatically absolves them of needing to construct any form of logical or intelligent response.
For the record, there's nothing even remotely racist in my posts.
@Bystander: It's literally #2 on your list. The myth of immigration causing any genuine societal impact whatsoever is rooted entirely in racisim.
@chunksandwich: The fact that you associate the word immigration with race is more racist than many things I've heard.
rooted entirely in racisim
Utter nonsense. There's not a shred of evidence to support your position there.
In the context of this discussion, yes, immigration does have an effect on the price of real estate.
And BTW it's spelt "racism".
It would seem that the ex-RBA head of research agrees with point 2.
"the massive increase in immigration from 2005 … helped make housing less affordable"
"Immigration policy does not seem to be co-ordinated with other arms of policy. In particular, the recent increase in immigration was not matched by a commensurate increase in housing supply."
"Immigration boosts housing prices and needs to be better co-ordinated with housing supply…"
https://www.macrobusiness.com.au/2021/09/professor-tulip-imm…
I find it strange how some people on these forums are blaming overseas investors…..whilst those selling these properties are aussies. Why don't these aussies set a limit for their properties to sell for. So it's like a monopoly they have yet ppl blame the customers instead.
My Anglo aussie colleague was keen to put her property up for sale and wishes a Chinese would buy it cos they’ll buy anything supposedly.
Some people like the wealthy overseas investors when it suits them.
Ban investments, also I think we should private businesses with greedy bosses making 100%-300% profits.
Let's also redistribute all land to peasants and all power to the workers. oh, that didn't go well in soviet union did it?
Please explain what you think happened to the soviet union.
coming from the union myself, I believe soviet union did not sustain it's model, in my opinion one of the biggest nails in its coffin was its planned economy and a wrong leadership model.
If I'm buying - ban investors
If I'm selling - welcome investors
^^ Nicely put.
I'm a property investor with 7 (9) properties and I live in Sweden now. Three of them I've built.
A word of warning:
In Stockholm, every day (mum and dad) property investing is almost impossible. NO negative gearing allowed… rental prices are caped… very difficult to kick a tenant out etc (even a criminal).
The truth is ONLY giant companies can afford to invest/build and it rarely happens in desirable areas. This has lead to not only crazy high prices in Stockholm (low supply) but also 10-20 year WAIT lists to get a place to rent.
Yes. 20 years!!!
https://www.bbc.com/worklife/article/20160517-this-is-one-ci… (see this from 2016)
So, to get a rental in Stockholm, you have to get an (illegal) sublet which gives you basically ZERO rights and means you have to move every 6-12 months. It's seriously wild. Broken
What Australia could consider (in my opinion), is less incentive to buy existing properties, and more incentive to BUILD new properties. Also, more regulations for foreign investment :) You realllllly don't want to follow Sweden here.
Honestly, property prices are fine in Australia… outside Sydney and Melbourne.
I always like reading that negative gearing is the main driver of property price gains.
Nah
Middle class welfare is.
The cash floating around from this, funnelling its way to the mega rich is phenomenal.
The coolest part of this is that recipients of middle class welfare actually believe it helps them.
While I can understand that some people prefer to change the system other than (more realistically) changing themselves, I do feel glad/grateful/lucky that I made an ok life for myself and I don’t have to fight for a change for some basic needs.
I still remember the days when I was poor, I lived in a $50/week shared room, using a crap cheap Motorola F3 phone, spending around $30/week on food, but, unbelievably, I was happy. Later I was able to purchase a second-cheapest-in-town studio apartment (not in capital cities) and lived there for 4 years before relocating for jobs. It was tiny, but looking back, it effectively saved me $100k than if I was renting.
There is only one type of property investor we need to ban - foreign. The fact that we can't buy property in certain countries or even own a business there but we then sell our best residential and commercial properties to them in Australia is criminal. Especially when this is prime farming land or key services. Then again, I also don't believe in private individuals selling off our country's mineral wealth for personal profit without the majority of the money going to government for the benefit of the country.
you are cute
NO
I don't think the root problem is investors, although I don't think they help and the argument that they are providing housing for people is odd because it's not as if the house was going to sit empty otherwise, someone was going to buy it and live in it anyways. I used to think so but looking at other countries that tried to implement such measures, it showed it doesn't work without more government intervention. Personally, I don't want to invest and for fight for houses when I don't need one and others are just trying to find a place to call home only to turn around and try to rent it back to them. People blame the government but you can always refuse to play the game and you should never let money deter you from doing what you think is right.Then there are those who talk about hurting 'mum and dad investors' but then also call it a business and an investment…we're talking about making housing affordable for the future generation and a more equitable society in the future, I couldn't care less about mum and dad investors because investments inherently come with risks.. And I'm just going to be honest, people's talk about deserving it because of their 'hardwork' and picking up some extra shifts or working weekends. Just be thankful you're in a country where a)you can make good money without a decent education b)penalty rates exists c)you're not expected to work 9 hour days 6 days a week like China, Japan or some sectors in America just to survive. Do those extra shifts make you deserving of 3-4x what the general public owns?
Also, I think what covid shows is that people are willing to pay high prices for a place to live so it really is just the market. The problem I have is where the money is going. In an ideal society, all this extra cash people are willing to pay for necessities such as housing (specifically rent), water, electricity, gas etc., like water, should be to the government where they (hopefully) will use this money to invest in healthcare, education, research etc. and make a better society. Social housing doesn't have to cost the tax payer, it should be rented out at market price where in the long run, they would actually profit. But the point is, rather than limit investors, we need the government to be a big player in these sectors. I think water is a good example, when water becomes scarce, the government can increase prices to match supply and demand and help those with lower income while using the money to build solutions to the problem. If it was privatised they would increase the price year after year because they can (also because they're douches) and then the government has to help low income earners with concessions which just ends up going to the company anyways. So all this money and profit into the hands of a few individuals who will just hoard it overtime rather than it being of any actual use. Same with mining, I think I read somewhere that most of the profits go to overseas investors and if shared among Australians, could give us all like $5000 each but because of privatisation rather than being government owned like some other countries, we only see a small percentage of it despite it being a natural resource.
Another problem we have is that apartments are more or less stigmatised when they're actually the future. Climate change is real and we all recognise it and unfortunately, living in highly dense efficient cities can help mitigate our CO2 impact while providing more affordable housing. Sure it may not be what you want but it's the best thing we can do right now rather than clearning more land and building single story houses that will only house 3-4 people per 500m^2.
Too late now given the damage it would do to the economy.
It was obvious 20 years ago that something needed to be done to curb speculation in residential property. The govt answer? First home buyers grants etc which further fuelled prices. The tax breaks needed to be reduced back then, its too late now beyond a bit of tweaking maybe.
What might go further is some education on the actual after cost returns on property. Too many "look at clever me, bought this for $300k in 2003 and just sold it for $650k!" type investors. Forgetting the strata fees, stamp duty, interest, maintenance, insurance etc costs along the way.
I see a fair amount of losses linked to buying property thru SMSF's in my job. No different to investing in it any other way, just thru superannuation. Almost always turns out to be a poor or average at best investment when the numbers are done properly, as they are in SMSF financial statements where you can see all of the costs involved itemised. Similar statements for non superannuation property investments would open a few eyes.
Too many "look at clever me, bought this for $300k in 2003 and just sold it for $650k!" type investors
Problem is about 10k other people in the suburb and surrounds made the same profit. Once you pay out the real estate agents and capital gains. Then you have to pay the capital gains on the next purchase, only thing you can afford is a significant down grade.
Walking away only works if you exit and never return.
I don't know the right or wrong answer. But:
States will lose a chunk of stamp duty revenue->they won't be happy.
China has in the past few years implemented various control measures to control property prices, you can see how they are doing it
https://www.scmp.com/business/china-business/article/3143641…
Will that work? I can't tell. Short-term "shock" to the price, maybe? Long-term effect, I think that's not going to help and house price is still going to grow faster than CPIs as investors need to look for assets that outgrow CPIs.
A fair go, what happened to fairness?
Tax property investment, so bank loans to do with investment property should add on an extra 25% tax and an ongoing additional 10% interest tax until the end of the loan period. Strict conditions should apply to home loans - for own residence only in perpetuity- no renting, no six month crap.
Overseas investors can buy property in Australia but will be subject to a 50% foreign tax straight up at least.
Greedy “Australians” should never be rewarded.
Never.
Why would they cut their own profits?
I cant believe how incredibly ignorant some of the poster are here about capital gains tax.
Let me try to bring you up to speed on what actually happens and why there is a 50% discount on capital gains. it is not a gift and it is actually hugely unfair to investors. I am sure I'll be down voted by those that can't grok how it works but whatever, maybe one or two of you will come away a little wiser.
An investment property hopefully appreciates in value. But it may not and is a risk. The more risk a person takes the better their returns should be. Most people who put money into shares understand this risk return concept. Why take a risk if its not going to give you a descent return?
So we will use simple numbers here, I am also ignoring the financial and emotional stress that owning an investment property involves. Many of you c%^ts out there are prepared to destroy another persons home because you don't give a shit.
You buy a property at $100K
After a good year, and we will assume they are all good years it appreciates by 5% (in truth it goes up and down so we will call this a median).
So you have increased the capital value of the property by $5K. But you don't pay tax on that because it is 'unrealised profit'. Its not like someone gave you $5K its just hopefully after you sell it it will worth $5K more than you paid for it.
If you could pay tax on it it would add $5K to your income. Say you were on $50K per year, That would mean at the end of the year you would pay tax on $55K AT THAT TAX RATE! Take note of this!
Fast forward 10 years and your property has appreciated by 50%
That means your $100K property is now worth $150K (a bit more due to compounding, but I am trying to keep it simple so don't argue like a fool, the point is not the capital gain its the tax rate you pay at the end).
So after 10 years you sell it for $150K
What happens to that $50K so called profit? do you add it to each of those 10 years and have it taxed at your marginal rate in each of those years?
NO YOU DON'T It becomes due that year.
So you take your $50K Income and add another $50K to it. All of a sudden you are pushed right up all the tax brackets into the highest tax bracket at $100K income and you have to pay tax at the top rate.
So the $50K that took you 10 years to earn is taxed as if you earned it in the one year.
Is that at all fair? No it isn't! and the tax office recognised this. So they said, because it is unfair to tax you on your earnings all in the same year and its not possible to recalculate your tax over the last 10 (20, 30?) years we will discount the capital gains tax by 50% to try to make it a little fairer.
The capitalized words are due to the number of dullards in here that don't have a pair of brain cells to actually use to research the tax and how it really works but just repeat the bullshit sprouted by others. Familiar Hmmm. Any antivaxxers here?
Now also consider this…
In a fair world you would be able sell one property and buy another equivalent property with almost no losses in between that exchange. but due to capital gains tax that's impossible. So without putting a lot extra money in you are always trading downwards towards zero.
Oh and if it wasn't for investors taking huge risks and buying homes to rent to people at much less than the cost of the mortgage, where would most of you live? At Mum and Dad's?