Negative Gearing and Capital Gains Tax Discount Should Be Abolished

Property investors have had it too good for too long, claiming Negative Gearing and CGT tax incentive. Property investments sectors are mature and highly profitable, NGs and CGT serve no purposes.Investors provide rental housing are not out of their kindness or altruism but post the opportunity cost for home seekers.

NGs and CGT tax breaks should be abolished so that these funding can be recouped as Government's revenues. People's' power can force policies makers to flatten the forever housing prices rise then you'll have a chance to buy a house at OzBargain.

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  • +139 votes

    Labor went to the last election with it. Guess what, they lost.

    • +20 votes

      To be fair, they went with a whole lot of policies.
      There was at least 1 thing to prevent every swing-voter from voting them in.

      • +69 votes

        That’s right. Because people are greedy. Boomers with investment properties coming out of their wazoo lobbied against it.

        I’m sick of subsidising, as a taxpayer, people’s businesses that are structured to lose money.

        It is insane you can offset business losses (the property) against an unrelated income stream (regular wage).

        Given our love affair with property perhaps the compromise would be to allow one investment property per individual under the current rules and any more get no tax breaks or exemptions.

        • +55 votes

          So easy to trick the masses into thinking it's a "tax break"
          Have you not considered why the government deserves a single cent of profit you make from buying and selling capital assets, which investors have purchased with their disposable income which have been taxed already?
          Most investors gain wealth from capital gain, not from the measly "tax break" which will be offset by capital gains tax in the end anyway.

          If you gamble and make profit from it it's tax free while if you are sensible and plan for the future you get taxed in this country.

          This is just a BS brain fact from people who are locked out of of market. Property price is not up due to negative gearing. It's up because of ridiculous increase in money supply around the world. Every developed country in the world are going through sky rocketing real asset prices. Sheeps will always be mislead into thinking something as trivial as negative gearing will turn the tide. It will be like trying to stop a bushfire with a domestic fire extinguisher.

          • -34 votes

            @djc926: Another coherent rambling from the one calling people ‘sHeEp’

            • +21 votes

              @Vote for Pedro: Thanks for complementing my comment as coherent. I find yours to be incoherent, biased and unknowledgeable.

          • +5 votes

            @djc926: Thanks for making the effort to write a coherent argument. So much more use useful than name calling etc..

            I don't think gambling is a fair comparison though. I doubt anyone would take their life savings and put it to gambling to get the tax break.

            • +13 votes

              @gummibear: Why is it not? Perfectly fine example of inherent issues with the tax system penalising honest profit while what they make it look like they are discouraging through all the legislation around gambling, yet the tax system makes gambling profit appear lucrative.

              Are people going to now whinge about allowing deduction for receiving investment advice for their share portfolio, subscriptions etc as well?

              Our tax system is fundamentally based on the nexus between income and expense incurred to produce the corresponding assessable income. This will never change in our lifetime and if they are going to collect CGT, it is only fair for people to be allowed to receive deduction for all costs incurred in relation to maintaining that asset.

              People with zero knowledge about the tax system are usually the first ones to call for overhaul and abolition without understanding the flow on impact

              • +7 votes

                @djc926: How many people do you know with negatively geared properties. Compare this with the number of people you personally know who have taken their life savings to the casino, pokies, horse races etc….

                This isn't meant to sound like a personal attack.. I just don't think its a good comparison.

                • -1 vote

                  @gummibear: What does life saving have to do with it? Income is income, tax is tax. The amount doesn't matter

                  • +6 votes

                    @djc926: It's probably fair to say almost no one sees gambling as an investment strategy to achieve tax benefits.

                    Therefore you are comparing negative gearing with something that doesn't exist.

                    I'm not arguing tax, or income, or any of that. All I was saying is your example is potentially misleading


                    @djc926: tax on taxed income is theft


                @djc926: Yeah I don't think we need to get rid of either. I just think interest on loans should be treated as a capitalised expense rather than a deductible expense.

                The reason for this is it the cost associated with borrowing money to acquire a property so should be treated as an acquisition cost and added to the cost base of the property rather than deducted.

          • -5 votes

            @djc926: there is nothing wrong with negative gearing in a vacuum. Its the combination of negative gearing with the capital gains tax concession thats not fair. allowing people to funnel their income into a capital gain.

            Why should you effectively pay 1/2 the tax just because you make your money through capital gains as opposed to income?!

            • +24 votes

              @gengi: That's where you are wrong. It's not a concession. Stealing from the people then saying you can have 50% of it back is not a concession. Lol

              When I buy a house or shares, I buy with my after tax income. I already paid income tax on it so why should I have to pay tax again just because I made sound financial decision? Isn't that double taxation?
              Not to mention when you make a gain, you have to pay cash yet when you make a loss you can only offset it against future gain?

              • -11 votes

                @djc926: No thats just not how tax works.

              • -6 votes

                @djc926: "When I buy a house, I buy with my after tax income."
                No you don't. You pay a deposit and then buy with the rent paid by the tenants, who in turn are never able to save a deposit for their own place. Then you use the first property as security to buy the next one with another tenant struggling in it.

                End of the day it's just a tax rort as in "I don't want to pay the tax I should pay on my income, but I still want to use the Roads Schools and Hospitals"

                All that time you happily deduct expenses from your income to minimise tax payable on your income.

                • +22 votes

                  @Repi: And where does the deposit come from? Lol
                  Renters rent because they need a place to live and they either can't buy a place or choose not to burden themselves with a mortgage. Don't talk as if property owners are taking advantage of people and deceiving the renters into entering into a misleading agreement lol also it would be sensible if you didn't only consider the scenario where the property price goes up. If it goes down what will happen? Simple case of risk and reward.

                  Oh rort? I wonder then how my tax bill is so high still if it's such a sweet deal.
                  The rort with the tax system is allowing business owners/tradies to deduct every single cent they spend on running the business while salary earners can't get deduction for basic cost of commuting to work.

                  A lot of sour grapes from people who fully knew what tax system we have but were too busy pissing away their money on things like overseas travel and drinking lol

                  • +1 vote

                    @djc926: If your property benefits from anything paid for by tax, then any gains you get from leasing it or selling it would need to be taxed.

                    If you claim it doesn't, then consider how much your property would be worth if it is not serviced in any way by a road.

                  • +2 votes

                    @djc926: Amen,

                    (let me just preface this with, my education was as an economist - but what do we know about the economy).

                    1. people whinge about "rorts taking away from taxpayers" - the reality is about 60% of the population is tax negative - i.e. they get more in benefits out of the government than they pay in tax, so arguing that they are carrying the load is a crock.

                    2. Turn off negative gearing, and you will see a partial dump of investment properties onto the market, but that won't fix renters or the next level down, social housing, because those people haven't geared up to buy that stock anyway. You would get a glut/oversupply of properties available, but not enough to make a quantum difference to renters - you are just more likely to see corporations take ownership of the rental pool rather than mum and pop negative gearers - and they are likely to be less caring than the status quo. The issue is making things more affordable for people trying to get into the market - some years back some associates and I worked on the modelling for restructuring the way that mortgages worked, to make housing more affordable at the entry level - we got two tenths of SFA support, particularly from government.

                • +4 votes

                  @Repi: Ha, have you looked at your tax report lately, how much of it goes to schools/roads/hospitals <10%? Most of it goes to welfare / pension / and public servants.

                  Also it sounds like you aren't familiar with how lending works these days. You need to maintain a percentage on the property of equity vs the loan size, usually around 80%. This means to do what you are suggesting requires significant growth in the property. Takes a while in most cases (years!). Even once you have this you need the income to back it up to service the loan. Banks look poorly on negatively geared properties for service ability so you can't even hold that many of them before nobody will lend to you.

                  Negative gearing is the low hanging fruit that people love to bash when they largely don't understand it. The tax offset (and it is an offset, you don't get everything you lose back on a % so you still lose money) allows people to offer properties to rent at below the value required to hold them. This is a good arrangement for both parties.

                  Renters can rent property they can't afford or don't want to buy (there are significant costs associated with buying and selling that don't suit many people's living situation), and investors get a small offset to their taxable income.

                  People always complain they don't want to live in x suburb because it's not safe or it's undesirable. Guess what, the suburbs you want to live in now were those suburbs 20 years ago. Nobody wanted to live in Reservoir in Victoria even 10 years ago. It's worth a bucket now. People need to curb their expectations. FYI move to QLD, live in Woodridge, get a house for <$300k less than 15km to city.


                    @zephyrfox: there's no houses in qld. i suggest you buy before moving here cause you wont find a rental in the interim.


                    @zephyrfox: "allows people to offer properties to rent at below the value required to hold them" - I think you don't understand it.
                    How much a property is rent for is essentially supply vs demand.

                    To me there is no point arguing over and over. May be it is worthwhile knowing when negative gearing was put into place and what was the incentives / motivation behind it. Probably something to do with shortage of public housing ? Assuming this is the case, has public housing situation improved since the introduction of negative gearing ? If not, is it now sensible to go back to pre-negative gearing era or vice versa ?

              • -1 vote

                @djc926: Government funding needs to come from somewhere. I'm all for lowering tax but treating income from capital gains different from regular income makes no sense. Lower it for everyone not just those owning investment property. Income is income, it should be taxed.

                When you buy shares you can't offset the loss against regular income. any capital loss can't be used to offset income. you can't negatively gear shares like you can houses.

                • +3 votes

                  @gengi: You seem to be forgetting the concept of capital gain vs income. You can't offset the loss from shares not because properties are negatively geared lol it is because losses from selling shares are capital in nature. You can't offset the capital loss from selling a house either. You can with ongoing cost of owning the property because of the nexus to generating the rental income which is assessable income.

                  You were close but fell short of the mark

                • +4 votes

                  @gengi: Of course you can negatively gear shares, if you borrow money to purchase shares, or any investment, you are able to claim the interest against your income.

                  CGT discount replaced the inflation calculations used previously for assets held. If there was not CGT discount or no inflation adjustment there would be little point in investing.


                @djc926: I think you have double taxation wrong.

                The best way to look at it is by looking at the principal and the profit as different items.

                hypothetical, you buy a house for $500,000 and sell it for $600,000 a year later

                with double taxation (at top marginal rate)
                $600,000 / 2 x 0.47 = $141,000 tax payable

                without double taxation
                ($600,000 - $500,000) / 2 x 0.47 = $23,500 tax payable

                Not to mention when you make a gain, you have to pay cash yet when you make a loss you can only offset it against future gain?

                Regarding this I can think of a few reasons they would do it like this.

                1. if capital losses could be offset against income, it would allow for some very creative accounting.
                  If someone was having a very profitable year and was expected to pay lots of tax they could buy an investment property establish a trust then 'sell' it to the trust at a massive loss which would lower their income to potentially 0 while now having a rental property.

                2. Australia taxes all profit generated the only exceptions being items of pure chance, like gambling or lottery, that's because these cannot be used as means to avoid tax. If capital gains were not taxed I would argue almost every company executive would have $0 income but be given 5,000 options with a purchase price of $0.01 per share, then sell them for instant untaxed profit.


                  @Bjingo: Your math is seriously flawed and completely ignores the definition or what forms cost base of capital assets lol
                  How do you even arrive at 600k / 2 x 0.47. That's not double taxation. That's just incorrect math.

                  I meant double taxation as in the money people pay to purchase the property with having been taxed already.

                  Luxury car tax is another example of BS double taxation the government uses as a sore excuse to rob from people.


                    @djc926: yeah, the cost base is what prevents double taxation

            • +4 votes

              @gengi: What people seem to be missing is why the 50% CGT discount exists. Way back in the early days of CGT, you used to index the gains to CPI to compensate for the fact that a dollar in loses value over time due to inflation.

              This made the system pretty complicated to calculate the tax, so they introduced a flat 50%.

              The investment property market provides stock for those who want or need to rent. There is an element of this that is required. It isn't ideal to have supply ripped out of the market unless those who are displaced are finanically able to enter the mortgage market.

          • -3 votes


            If you gamble and make profit

            Why would it be legal and subsidized to "Gamble" with a commodity that is a basic need. Living / roof over your head ?

            It's deplorable that a country would allow that.

            Imagine going to your supermarket, and having to pay $5 the litre of milk, or $20 for a loaf of bread? Just because someone speculated on milk, and in worst case would let the milk/bread go off, just to keep the prices high ?

            But that's exactly what is happening in this country.

            • +10 votes

              @cameldownunder: Get real. Nobody in Australia has issues with having a roof over their head. They just want that roof to be at a certain location with x number of bedrooms, backyard, close to work etc

              If you think the market is the way it is now because of investors, you are seriously in need of more research into why we are where we are.

              • -7 votes

                @djc926: Sure, buy shitty run down fibro house, 2 hours commute each way, no facility near the property, with septic toilet and rain water tank ….
                …. for …. oh wait ….. also this piece of crap is going for more than 1.5 MIO, thanks to property "investors"

              • -1 vote

                @djc926: Difficult to research, seeing other countries don't have negative gearing for properties and NZ is abolishing it. I assume Australia is way ahead of the rest of the world ?

                • +2 votes

                  @Repi: If so, you tell me why property prices are sky rocketing in these countries without negative gearing as well then?

                • +1 vote

                  @Repi: It seems that in NZ they don't tax the capital gain on an investment property if the intention of the investment property is to earn a rental income and it is held for a number of years.


                  @Repi: Nah, Japan hasn't gotten rid of negative gearing….. given…. their houses are depreciating assets with a useful life of 20-50 years because of all the tsunamis, floods, typhoons, earthquakes, and cyclones so not really a comparison


            @djc926: Just like any retail shop, people buy products from wholesalers and sell them in shop for profit. When they make money, they pay tax on it.

            Investment property is just like buying and selling any thing similar in shop. You buy stuff with money you saved (after tax money) and you sell it and make profit. You pay tax on profit.

            Gambling or Lottery is an exception and I do agree (with @djc926) that government is wrong in this. They should tax it.

            I am in favour of removing Negative Gearing

            • +2 votes

              @sonu1111: Um no. You are ignoring the whole concept of capital vs non-capital and your whole argument goes out the window.

              If you are in the business of selling houses, you will treat properties as trading stock and profit or loss will be assessable as income or carried forward to be offset against future profit. Also movement in trading stock will be declared as income or expense as inventory gain/loss

              Normal investors are not considered to be in the business of buying and selling properties for profit.

              Another example of people who have very little understanding of our tax system making comment about how it should be changed..



                Normal investors are not considered to be in the business of buying and selling properties for profit.

                Normal investors are not considered to be in the business of buying and selling properties for profit.

                • +3 votes

                  @Bjingo: You are hopeless.
                  In the eyes of the tax office, that is not considered to be running a business.
                  How many properties does an average person buy and sell in a year? Answer that question and reconsider how silly your argument is.

                  If someone was involved in flipping multiple properties every year full time, that would be a different story

        • +2 votes

          Boomers with investment properties coming out of their wazoo lobbied against it.

          Not just this. Bill underestimated how much of his voting base actually have negatively geared properties. All tradies I knew voted against him for this reason


            @bemybubble: And if they didn't have negatively geared properties, they were:
            - Retired people living off dividends, enjoying that franking credit rebate because they're in the tax-free threshold
            - Young people trading stocks/crypto, believing they'll do this for life, angry at their 50% CGT discount dropping to 25% CGT
            - Poorly educated or lower functioning people watching TV, seeing Clive's "You can't afford Labor's debt" ads
            - Probably something in the culture-wars about thinking Australia will become communist or invaded by SJWs scaring off some middle class white guys


            You'd think these kind of data would be available to them right?



              You'd think these kind of data would be available to them right?

              Was thinking that too. But as we know data bears no emotion and assumes everyone is rational. hence why people are paying more attention to behavioural economics. Remember how people thought trump would never be president?

        • -2 votes

          I think rent should be capped at an affordable rate unrelated to mortgage costs. its your investment, I'm not down for paying for your house.

          • +3 votes

            @sarahlump: Sorry but that's a complete joke. So you should be able to go and rent a $10mil mansion for $300 a week just……….because?


              @MrFunSocks: Capped rent sounds good in theory. Problem is there are only so many rentals available. It's an open market. Just like people can't afford to buy in Ashgrove they also shouldn't be able to afford to rent in Ashgrove. With the way the current market works, negative gearing does mean rents can be offered at a lower price than the holding cost of the property, therefore more people can afford to rent in Ashgrove than buy. That doesn't mean everyone should be able to.

              Lots of city apartments to rent these days, at decent prices. The dream is a house with a backyard close to work (CBD), unfortunately lots of people with this dream and only limited land available.

          • +2 votes

            @sarahlump: Rent somewhere cheaper if you want a discount.


            @sarahlump: There are a few things that would need to be done, in particular more safety for renters
            — Not being able to cancel rental agreement except for
            —- Renovation
            —- Owner occupying
            —- Not paying rent
            — Increasing ( decreasing ) rent in accordance with interest rate
            ( It is not admissible that rent stays the same with interest rates going from 5% to 2% )
            — Maintaining property in good condition in timely matter

            • +2 votes

              @cameldownunder: I don't think that is entirely fair either. If interest rates go down you shouldn't need to offer reduced rental.

              You are forgetting about a large portion of self funded retires that hold a couple of investments outright (no loan, therefore no interest) that live on the rental income (this includes my parents btw).

              These are good people to have in the system as they don't take a pension which reduces the strain on public funds.

              • -2 votes

                @zephyrfox: Of course you do.

                You are forgetting about a large portion of self funded retires that hold a couple of investments outright

                EXACTLY the point.

                hold a couple of investments outright

                Why would they need more than the house they are living in it?

                It's not meant to be an investment.



              • ( It is not admissible that rent stays the same with interest rates going from 5% to 2% )

              So - what if the landlord doesn't have a motgage?
              How does a change in interest rates play into that?
              If interest rates go up do rents go up even if the landlord has no mortgage?
              Rents float with interest rates???



                So - what if the landlord doesn't have a mortgage? How does a change in interest rates play into that?

                ROI ( Return of Investment ). If the market ( non property, but shares, dividends, bonds, term deposit ) fluctuates at a certain return, why should property investment return 3 or 4 times the market return?

                Rents float with interest rates???



                  @cameldownunder: Yeah, I don't think you understand a couple of concepts here.
                  Firstly Markets.
                  Various investments return above or below the "market return" at different points in the cycle.
                  The only "market" that is down at the moment is the RBA cash rate.
                  Share Dividends are still at 4%, share CG is still high.
                  Property prices are at all time high.
                  Land Tax, Rates, Insurance and other costs continue to rise at 3%+
                  And you think Rents should go down when the cash rate drops,

          • +4 votes

            @sarahlump: You really are twisted…Renters rent because they need somewhere to live in then they act like they are doing the landlord a favour by "paying for their house"

            You are not paying for their house. You are paying for the agreement that allows you to live in that house over the term of the lease.

            I guess you will get angry at everyone on that basis. You go to a car dealership and buy a car because you need/want one and then lose your shit saying you are paying for their bottom line? Lol

          • +2 votes

            @sarahlump: Rent control should only be for public housing, not private.

            Rent should not be capped and should be subject to the rental income of tenants in the tenant market, as they are now.

            In a private rental contract, you're paying for the privilege of being a tenant of that property, there is no calculation in paying for the mortgage tied to the property.

        • +3 votes

          First we blamed the chinese and foreign investors for high house prices, we stopped that.

          Prices are still high.

          We then complain about a lack of rentals.

          There is lots of affordable housing, just not in premium areas.

          Remove the investors, and you then have reduced rental property availability. Then people are forced to buy houses, that drives up the prices even more.

          There are lots of empty apartments at the moment you can buy, but land is always land, and you cannot make more of it.

          REAL INVESTORS don't buy property so they can negative gear or bet on saving on capital gains. They buy property, because that is the safest place you can put your money.

          At all time low interest rates, plus stay at home, plus QE, this has put more upward pressure on property prices.

          Increase interest rates, bring down property prices, but also drop us back into recession.

          Choose your pain.


            @Gallifr3y: From my experience I have seen predominantly four kinds of property investors.

            1. Those that buy houses to either have $0 profit or negative gear. 0 is prefered for them as the property pays for itself and appreciates in value but if they had to choose between PG and NG generally they would rather NG and put more money into their property then pay tax.

            2. Those that are wealthy and just want to move money around to pay less tax, typically families with adult children (trusts are powerful).

            3. People that buy with the purpose of improving it and reselling it, they will rent it out throughout the process so they can expense costs

            4. people that want to live off rental income, they want to keep expenses as low as possible and income as high as possible then cop the tax and consider it a cost of renting out the property, generally they have multiple properties and they do R+M themselves.

            it has not been betting on CG since like early 2000s


              @Bjingo: Bear in mind "NG generally they would rather NG and put more money into their property then pay tax."

              When you negative gear, you're not putting any money into your property. You're taking the money you earn, and offsetting that against the interest.

              You cannot offset the principle you pay. Though I'm sure you know that anyway, I'm just highlighting it for the other folks.

              It's mainly the appreciation in value, most of the times in higher priced suburbs, the income from rent will not offset the interest.

              If any CG, we're talking about 5-10% p/a which is standard returns, but you've also sunk a huge amount of cash/equity into it and opportunity cost. But for most people property still is the safest bet unless you run a capital intensive business when you can get 100-500% return on your money or can improve your 'returns' in stocks - which for 99% of people is not possible.

            • +1 vote


              but if they had to choose between PG and NG generally they would rather NG and put more money into their property then pay tax.

              Nah, they'd choose PG because that means they're making money even after paying tax. Why would someone choose to lose money to get some of it back on tax when the end result is they are worse off financially? You're better off making more money than less. Do you also think that some people should turn down raises at their job because it would put them in the higher tax bracket and somehow worse off because they have to pay more tax?


                @MrFunSocks: Generally the logic I have seen behind it is people would rather put extra money into their property, ie do some vanity repairs, pay for a Depro report, install a new aircon. in order to not pay extra tax. These people are not using rent as a means of making profit and more as a means of having the investment pay for itself. Given, if they have the option of PG they probably don't have a mortgage anymore meaning the house has likely already paid for itself.

                You would be surprised how many people just don't like paying tax. They'd rather spend more on themselves and their investments then give away money in the form of tax.

                I will say my perspective is likely skewed as all my experience with this comes from tax accounting so I only see the examples from people who pay for an accountant.

                I have had many people get mad at me asking why their tax was a few thousand dollars higher than the last year, despite the fact they just paid off their investment loan and made $10,000 more because of that.


                  @Bjingo: Ok so you're basically saying that it's just dumb people that think being negatively geared is better than positively geared because they think they're "fighting the evil tax man" or something like that? There definitely are people like that, but they're still wrong.

                  Ill take a $10 profit every week over a $10 loss every week no matter how much tax I paid. How much tax you pay is irrelevant at the end of the day, just how much is in your pocket. Negative gearing will never put more money in your pocket, it just makes you lose a bit less.


                    @MrFunSocks: It's less dumb people just people with a lot of money, to them the option is improve their investment for $1,500 or pay $700 in tax, the $1,500 is just going back into their pocket but the $700 is just gone.

                    I will say I have seen one case where the entire structure of purchasing the house and negative gearing was to avoid tax, it was kind of brilliant honestly.

                    To run through it for context this couple were both doctors with 3 children over 18 they made very good money and paid a lot of tax they already had a trust which all 3 kids were beneficiaries in.

                    So what they did was they took a loan of $1.5 mil from their trust with a 5% interest rate and used that money to purchase an investment property. they pay just the interest on the loan each year amounting to $75k. The property got rent of about 50k a year and had about 25k in running expenses so the property made a 50k loss which offset their income.

                    So the 75k interest expense they paid was income in the trust which was "distributed to the kids". they each had a tax bill of $1.5k
                    meaning the 75k was now $70.5k and the parents got a 50k loss meaning their tax was decreased by $23,500

                    Now the fun part putting all the numbers together for total savings

                    parents Income $ 50,000
                    parents expense $100,000
                    Rental profit/(loss) ($ 50,000)
                    Tax payable/(refundable) ($ 23,500) [50,000 x 0.47]

                    childrens income $75,000 total
                    children's tax paid $ 3,900
                    net income $71,100

                    no rental gonna make gross income 500k total for ease sake with no other deductions

                    income $500,000
                    tax (500,000 - 180,000) x 0.47 + 51,667 = $202,067
                    net income $297,933

                    with rental same conditions
                    parent Individual
                    Income $500,000
                    less: rental loss 50,000-100,000 (50,000)
                    tax (450,000 - 180,000) x 0.47 + 51,667 = $178,567
                    net income $271,433

                    Income $75,000
                    tax (25,000 - 18,200) * 0.21 x 3 = $ 4,500
                    net income $70,500

                    combined trust and individual 341,933
                    Difference 341,933 - 297,933 = 44,000 additional net income

                    I'm gonna premise this with this is only something wealthy people would be able to do because they literally needed 1.5 mil lying around and solid incomes, but this is the sort of garbage that can be done with negative gearing if you have enough money.
                    I think Interest on loans should be considered an acquisition cost and capitalised, which would help prevent these situations but allow loss offset in the case of major repairs.

                    tl:dr Rich people can profit off negative gearing and my maths on it

                  • +1 vote

                    @MrFunSocks: Ditto. I'd take PG over NG.

                    Sure you can tick boxes to to bring your property to neutral or NG but why would you if its not necessary?

                    People want to minimise their property being negative geared.


                      @pogichinoy: It makes sense to be PG and people should strive for it, and though I'm not for removing NG I think interest on loans should be capitalised instead but this begs the question, why would people care if NG was gone and you carried losses forward?

                      Given people want to minimise being NG anyway, why does it matter if NG is gone? Assuming you have a year with lots of expenses and its a loss after the circumstances causing this are finished your property would be PG again and the prior year losses would offset the profits. Since no one is aiming for NG properties 9/10 wouldn't be sold with unused losses.

                      Despite this people are intensely against removing it even though everyone is aiming to be PG and it shouldn't matter right?


                        @Bjingo: I think the thing is that most of the people against it are like the people against removing franking credits - they don't have investment properties/franking credits, don't understand Negative Gearing/Franking Credits, but think that they're some super duper tax dodge that puts more money in your pockets and want this benefit themselves because they're just "temporarily poor millionaires" in their minds (the people that vote for parties like the liberals when they promise tax cuts for the rich because by golly they'll be rich one day, even though they're lower class and terrible with their money, and when they are they want those tax cuts!).

                        • +1 vote

                          @MrFunSocks: that makes sense; "don't want to miss out on negative gearing when I have investment properties!" type of thinking.

                          Honestly the only thing I think they should change about franking credits, is franking credit refunds in pension phase superannuation funds, because that is stupid.

                          It is odd that people vote based on tax changes they don't actually understand and don't intend to learn about.


                        @Bjingo: It matters because the current narrative is to remove NG with no option to carry losses forward.

                        However, if this was an option and marketed correctly and well by politicians, then it would garner a better response by voters.

                        People are intensely against removing it as per the above. Whilst everyone is aiming to be PG, NG is a stepping stone to that neutral or PG status.


                          @pogichinoy: oh what, not being able to carry it forward is dumb, all other losses can be carried forward to later years.

                          If it is just a stepping stone then carried forward rental losses would work equally well but if they dont plan to allow carried forward losses then getting rid of it is ridiculous.

    • +17 votes

      They actually gained seats in the higher socioeconomic areas which take advantage of these tax incentives the most. Labor lost because Queensland went ballistic over the inevitable climate policies and would rather stick their heads in sand.

      • +3 votes

        America has its deep south & Australia has its deep north

        • +2 votes

          Not a particularly fair comment when QLD has one of the highest percentage of stable renewables compared to the other states. QLD also consistently pumps renewable energy through the exchange to NSW.


          look at who is in lockdown not deep it NSW try to get into Queensland shock me.

    • +1 vote

      Both Bill Shorten and Scott Morrison prayed to God for election win,, see Shorten didn't pray hard enough so didn't get his blessing, Scott Morrison has got much deeper relationship with God, it shows God bless Scott Morrison much more and perform miracle hence he won the election.

      • +8 votes

        I really hope your next post is a Hillsong bargain


      To be fair Labor went to the last election trying to remove the franking credits benefit to seniors..
      That and Shorten would've been their downfall.

      Polls they did prior to the election had the majority of Australia actually wanting to abolish or wind back negative gearing.

      It's not quite the election loser that people make it out to be.


      Six years ago I made a similar post on these exact issues. Got completely obliterated by the keyboard warriors of ozbargain. Things will never change unless the boomers and their property heir children are outvoted by those who want changes in political will around housing affordability. Until then, get used to high property prices becoming a drag on every aspect of our society and economy.


      They went to the election with it… but no-one even mentioned it, because all everyone was talking about was franking credits. Especially people who have no idea what they are or was in no way going to benefit from them, but they went "but that could be me!"

  • +38 votes

    I'm guessing you're trying to buy a house

    • +60 votes

      There is a lot of "I've got mine" so screw you going around….

      • +17 votes

        It’s quite sad. It could be “I’ve got mine, but let’s try and help you get yours, too.” But nah stuff that, “I’ve got mine, and if you try to get one I’m taking that one too.”

        • -11 votes

          Just get into the market then instead of crying all the time?

        • +13 votes

          I think it's sad that people who took financial risks and sacrifice to invest in properties are being labelled as if they are taking advantage of others' misfortunes.

          Don't blame your own financial decision on others. Same people whinging are probably the people who have been crying bubble and market crash for years and never got in. Probably the first ones to mock people with properties as soon as the market turns around

          • -11 votes

            @djc926: Financial risks lmao?? There’s very little risk in property investing in Australia especially if you do your research (which for property investing wouldn’t be harder than a simple assignment in university.) The most you risk is losing your job and therefore being unable to pay the mortgage if anything.

            There’s a difference between “blaming your own financial decisions on others” and blaming others paying idiotic prices for property (although it’s mainly land people should be investing in anyway, not apartments) and driving prices up to stupid levels just because of how greedy they are. There are people out there saving diligently but prices are increasing too quickly for them to be able to get their foot in the door as well. Before you say it, yes this couple is from the most expensive city in Australia but that doesn’t mean they should be forced to move their entire lives interstate just because property prices are at crazy levels in Sydney. Just because you don’t seem to know anyone trying to do this doesn’t mean they don’t exist out there.

            Granted, there are definitely other ways to achieve ownership such as rentvesting as well.

            • +3 votes

              @Ghost47: Haha super naive. If it was that simple everyone would not bother with any other investment. If you think there is virtually no risk, you are seriously mistaken. Just because it has been going up doesn't mean there was no risk and there is no risk going forward. If everything was so simple why do you think GFC was such a shock to the world.

              Lovely to hear my properties are guaranteed investment but I refuse to believe that even though that's music to my ears

              • -7 votes

                @djc926: Where did I say there was "virtually no risk"? It's not that hard to invest in property, the hardest thing about it is getting the initial deposit for your first property, then you can leverage yourself like silly and buy more properties using equity.

                Risky investments would be shares or venture capital. The thing is, Australians in general have a property fetish and think that the stock market is gambling.

                • +6 votes

                  @Ghost47: Fallacy from people who obviously have zero idea and never bought a place. You can't just use the equity and leverage the hell out of it to get loan. The most important factor is serviceability. If you don't know squat, best to not spread false info.
                  I could have multiple properties with huge amount of equity and the banks will still refuse to lend me more money if my income is not enough to service the minimum repayment


                    @djc926: I see, thank you for educating me, I stand corrected.


                    @djc926: it must be really nice having an entire social circle who follows your every word and never dissagrees with you. Nobody's said no to you in a long time have they?

                    • +1 vote

                      @sarahlump: Probably because I stick to facts not BS driven by the media and ill-informed people?


                    @djc926: Not our Bank, the deposit for another investment propery recently was 10k, they changed the title of the previous property to the Bank and that was that. Serviceabilty was mainly accessed by rental and predicted rental income. But yeah, i probably don't know squat


              @Ghost47: They can only get a loan for $670k, though even that should get some crappy place out west. Perhaps they should move out of Sydney?


              @Ghost47: if three is little risk then why dont you not invest in property?- and you dont need all the money you can invest in property ETFs/ etc invest with others.

          • +4 votes


            that people who took financial risks

            hahaha what risk? When things looked bad, the gov gave everyone with too much debt a no questions asked 12 month loan pause. Doesn't sound like a risk at all to me.


              @JimmyF: So they banks didn't charge interest during that time? And they don't ever have to repay that 12 months? Amazing!

              • +3 votes

                @brendanm: Banks charged interest at record low rates… Big whoops….

                The fact was, the 'rules' had been adjusted for no reason at all other than to protect people who made poor choices and couldn't service the debt they had racked up.

                • +2 votes


                  people who made poor choices

                  You mean people who had their livelihoods taken from them by the government during lockdowns? I have no sympathy for those that overextend themselves and make poor decisions, however this was out of their control, and sue to massive government overreach.