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  1. #91
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    Quote Originally Posted by babyno1onboard View Post
    Yes but what happens when interest rates go up and house prices flatten out? Suddenly they have to chip in $350 a week to top up the mortgage and the house isn't going up in value. It's not a fail safe way to make money and people can lose the savings they did manage to scrape together after years and years of saving.
    Interest rates won't suddenly double overnight. As they start to rise steadily, landlords will start to increase the rent.

  2. #92
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    Quote Originally Posted by BigRedV View Post
    Will you buy another investment property in future?

    Would you still buy it if there was no negative gearing?

    The amount of tax revenue that has been lost because of negative gearing is over $13 billion for only one financial year.

    There are countries around the world that don't even allow negative gearing.
    Yes we will, probably not for another couple of years though until we are mortgage free. We will buy even if there is no NG, but we will try and buy something that needs work so we can eventually renovate it and get some capital growth out of it. But we buy houses for their capital growth, not NG as NG really isn't that much when you only have 1 property.

    Does that $13bn after they add up all of the capital gains they make from investors selling properties.

    I would be interested in seeing a bar graph over the last 20 years showing how much revenue the government gets from positively geared properties and capital gains tax and then how much it pays out in negatively geared properties.

    My guess is the government still makes more money from positive gearing and capital gains tax than NG.

  3. #93
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    Default Housing / negative gearing / politicians

    Quote Originally Posted by ExcuseMyFrench View Post
    How about limiting NG to new property only? Wasn't the point of NG to help with supply?
    Depends on what the governments main goal is, the labour party's plan seems like it's solely about getting votes, based on 'investing in property is just for the super wealthy' vote for us and if you're a renter you can afford a property now those pesky investors are out of the market.

    Liberals seem to understand the bigger picture and the impacts of getting rid of all NG and reducing the CGD on the economy.

    Thing is if you can only use NG on new properties, you will claim more NG than an established house where there's less to depreciate.

    But the goal is to stimulate supply and make housing more affordable, then only using NG for new properties will achieve this.... So depends on what the objective is.

    Problem being housing affordability is so low and I just can't see it changing. Perhaps the answer is better education about budgeting and investment options - like the one @witherwings mentioned (and yes I know this won't solve the problem because yes I can see it's not just about trying harder or being 'smarter', but every little helps, right!?

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  5. #94
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    Personally we have chosen not to buy. Prices are ridiculously inflated and if you don't have a chip in the game (you or your parents) I just don't see the point in playing.

    But again I have the option of buying a house cash in France so retirement is sorted. For now I'd rather rent a house close to CBD and being debt free.

    I wouldn't like being a politic though, this situation is a mess!!

  6. #95
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    So if I had a property, charging $300 rent a week, owed $125k on it and it's negatively geared, what happens when it goes positively geared?

  7. #96
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    Quote Originally Posted by Wise Enough View Post
    So if I had a property, charging $300 rent a week, owed $125k on it and it's negatively geared, what happens when it goes positively geared?
    You sell it for capital gains and buy a negatively geared property or you just keep the extra income from the positively geared property.

  8. #97
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    Quote Originally Posted by BigRedV View Post
    You sell it for capital gains and buy a negatively geared property or you just keep the extra income from the positively geared property.
    It's only slightly negatively geared at the moment and will go positive soon. Will it really make that much of a difference financially? I don't want to sell it

  9. #98
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    Default Housing / negative gearing / politicians

    Quote Originally Posted by Wise Enough View Post
    So if I had a property, charging $300 rent a week, owed $125k on it and it's negatively geared, what happens when it goes positively geared?
    If you only owe $125k and are getting $300 a week it should be highly positively geared already. You might be counting the principle repayments as an expense and therefore think it's only "slightly" positively geared. This is not the case as principle repayments are not deductible.

    Your question is what to do with it.. Just hold on to it. It sounds like a good investment. Change your loan to interest-only repayments, it will give you more cash in your pocket to save or reinvest. You have to pay some tax on the profit you're making but so what? Better than getting a refund for making a loss.

    You probably have a tonne of equity in there too, I assume the property is worth at least $300k which would give you equity of $185,000. You could buy another property using the equity.

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  11. #99
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    Default Housing / negative gearing / politicians

    Quote Originally Posted by Wise Enough View Post
    It's only slightly negatively geared at the moment and will go positive soon. Will it really make that much of a difference financially? I don't want to sell it
    You will just need to pay income tax on the 'positive' portion. You will finically make income off the investment! Which should be the goal IMO

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  13. #100
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    Quote Originally Posted by witherwings View Post
    Interest rates won't suddenly double overnight. As they start to rise steadily, landlords will start to increase the rent.
    IMO rent is driven by demand not interest rates. Anyway, I've never made anything off NG (I've lost money) and have some friends who have lost their life savings and are in serious financial trouble from investing in property. There are people who makes heaps, but there are also those who lose heaps. It's not all roses.

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