What do you think about the current talk in parliament about changes to Negative Gearing?
Would that impact you? Would you support the measure or not?
I'm very happy that this is being discussed by our MPs. I also hope they engage with experts free from biases...
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17-02-2016 03:53 #1
Change to Negative Gearing tax breaks
17-02-2016 06:29 #2
I think there definitely should be a income limit on claiming capital gains and it should be reformed but most of our landlords are mum and dad investors with 1 property so I fear it will stop them buying investment properties which will obviously reduce the already small rental market in our area ( suburban sydney) which will then cause a rental boom and make it harder for anyone to afford the rent ! ( this happened in the 80,s when they changed it briefly)
Plus if they put a date on it ( I think I read from July 2017) it will cause another housing boom as people rush to buy just like it did a few years ago ( when they stopped the first home buyers grant )pushing the first home buyers out of the market again
17-02-2016 06:35 #3
I think a number of changes need to be made with respect to the concessions and tax breaks that are predominately used by the 1-10% of Australians.
It won't impact us as we no longer have any investment properties. However it may affect both my parents. Although I believe any changes won't impact existing investment properties which are subject to negative gearing. Changes to CGT obviously would in the event of a sale - but they both tend to hold on rather than sell.
17-02-2016 06:53 #4Senior Member
- Join Date
- Feb 2012
- Sydney NSW
Subbing. Will it spply to investment properties held prior to the 2017 changes?
17-02-2016 07:31 #5
from what I've read, I understand grandfathering provisions will apply which means all investment properties held prior to the changes will have the old rules apply.
tbh I've not bothered getting too caught up in this as they've talked about scrapping negative gearing/cgt discounting for a while and it never happens. I just think it would affect too many people and therefore cost too many votes. nobody wants to be the party that does it for fear of getting voted out.
I personally think negative gearing should apply to a maximum of 1 investment property per taxpayer. after that, the property is positively geared or expenses may reduce the net rental profit to zero. I think that is a fair compromise.
tbh there are a lot of investment property holders whose properties are not negatively geared, and they're paying tax on those profits. just because someone invests in property doesn't mean the properties are necessarily negatively geared.
cgt discounting is a very very grey area. would be unfair to remove the 50% discounting for all assets I think. and removing it for real estate only seems a bit harsh towards property investors.
I think capping the ability to negatively gear an investment property at 1 property per taxpayer would be a fair and reasonable start. they could then look at how that is working then phase in additional changes if needed. I don't believe negative gearing and cgt discounting will be scrapped overnight.
17-02-2016 08:13 #6
As for capital gains, the 50% discount makes absolutely no sense aside from being a populist political move when it was introduced years ago in conjunction with abolishing the indexation method of discounting capital gains (which incidentally makes perfect sense and should be brought back). So I support abolishing the 50% discount if it is replaced by the indexation method or something like it (which would take into account inflation / present value when calculating capital gains)
17-02-2016 08:44 #7
I don't think it's fair to say high net wealth individuals are "abusing" the tax legislation and exploiting loopholes. if it's current tax law, it's perfectly legal and not an "abuse" of the system.
there are other tax breaks that have been amended too which affect all tax payers, not just the high wealth ones. the phasing out of the medical offset for starters, which I think is a good move. why should anyone pay less tax because they have high medical expenses?
17-02-2016 08:55 #8
I think it's great that it's finally being discussed. It's a tricky one for politicians to address, as so many people don't want to see their own interests touched.
I think it should go, except on new properties. Our housing prices are ridiculous, and I think we're in a pretty ****ty situation when buying an investment property is seen as a 'safe' everyday investment. In my view, housing ought to be about people having a safe an accessible place to base their lives...not about people with money making more. Whilst we certainly need landlords, there are an increasing number of people who simply cannot afford housing that allows them to participate in society. When your only option is an unofficial sharehouse on the fringes of the city with no public transport...we've got a problem.
(apologies for the disjointed writing...doing about 4 things at once here).
17-02-2016 09:53 #9
I agree it's legal not "abuse". It they abolish it, we will raise rent. Not everyone with investment properties is a millionaire rolling in money. Many families that have investment properties have it for retirement. I don't want to rely on the government, I'm funding my own retirement. I pay so much tax it makes my head roll. We get nothing for the government except CCR. All we want to do is have a safety net for our future and our kids futures. We work our back sides off so we can invest. Leave mum and dad investors alone and target multi billion dollar companies avoiding tax.
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17-02-2016 10:08 #10Member
- Join Date
- Apr 2015
I want to preface what I'm going to say with I don't know a lot about this topic except for what was said on this week's q and a.
I feel like this is a loaded topic on this forum because most investors here are going to be mum and dad investors just by the nature of this forum. On q and a the labor rep who is/are proposing changes to negative gearing said that the majority of people using negative gearing are not mum and dad investors and are higher income earners.
Their proposal is to grandfather the current scheme and introduce the ability to negatively gear only with new house/property sales to encourage development and building.
I'll be interested to see whether they stick by these proposed changes or have to drop them given its an election year
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