The bank that she mostly uses and promotes is an overseas bank, and they give 0% interest for citizens who buy property in Australia (not sure for how many years it stays at no interest rate though). So I do are with the above statement.
From my perspective, I think this is a large part of the problem in our capital cities.
I'm not super-educated on real estate or finance but I don't see the abolition of neg gearing bringing down prices at all. Banks and whoever else will ensure that prices stay the same.
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22-02-2016 13:58 #71Senior Member
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- Jun 2009
22-02-2016 14:14 #72
22-02-2016 14:44 #73
"Negative gearing" from a tax perspective, basically means offsetting your rental loss against your other assessable income. Eg if you are earning rent of $20,000 a year, have interest repayments of $18,000, council rates, property management fees, repairs and maintenance and depreciation of another $5000, your total rental expenses are $23,000 and you have therefore made a rental loss of $3000. Your assessable income from salary, business profit, dividends etc will then be reduced by $3000.
Getting rid of "negative gearing" means that you won't be able to reduce your income by that $3000. Although supposedly you could still claim it against another positively geared investment or carry the loss forward.
In other words, you can still claim all your rental expenses up until the point that you break even.
I actually don't think getting rid of negative gearing will have much of a negative cash effect on most investors, but the perceived awfulness of it will freak a lot of people out into making rash decisions.
22-02-2016 15:21 #74
Negative Gearing - Politics talk
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22-02-2016 17:48 #75
I am completely against negative gearing.
Effectively tax on work is subsiding capital gain.
If it were to encourage new dwellings id be all for it but it doesn't.
If you want to invest in property, great! Not sure why you should get a discount/rebate for it at the expense of non-investors.
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SSecret Squirrel (22-02-2016)
22-02-2016 18:31 #76
I don't believe either is a bad thing. I agree with welfare and NG and CGT, but the it's not fair on non-investors argument isn't overly valid IMO.
22-02-2016 18:42 #77
Negative Gearing - Politics talk
I assume people are talking about Chinese investors, but they only account for 2% of the residential property investments in Australia.
It's unfair to blame them for the ridiculous house prices here.
To buy and sell a property and renovate or rebuild just wouldn't be feasible for a family in Sydney unless you had loads of money. That's not what I imagined or in my plan when we invest in property.
Here is one of Sydney's cheapest suburbs. A 3 bedroom old housing commission house in an area full of housing commission and it costs $465k.
ImageUploadedByThe Bub Hub1456130257.588931.jpg
And to buy land is almost $500k, and that is probably the cheapest land you can buy in Sydney.
ImageUploadedByThe Bub Hub1456130559.125356.jpg
Last edited by BigRedV; 22-02-2016 at 18:44.
22-02-2016 18:53 #78
See, I would rather live in a country that was equitable and helped the people who were struggling. For many, even just buying their own home to live in is a pipe dream.
I can only speak from my own experience but Sydney is so expensive that it's getting to the point where key workers like ambos, nurses, police and teachers can't afford to live in the area they work. That's not good enough.
22-02-2016 18:57 #79Senior Member
- Join Date
- Mar 2015
22-02-2016 19:02 #80
I don't think you can compare welfare with neg gearing though. A single mum getting payments needs to pay rent and buy food to survive. Getting money knocked off your taxable income for a household who own 2+ properties I don't consider a necessity.
I'm not sure I blame foreign investment. The financial articles I read blame the first home buyers but mainly investors with neg gearing. It's certainly not the *only* reason why the average joe struggles to ever buy. Yes food and general living is rising and not in line with wage increases. But when you are paying $600 a week in rent that is a HUGE portion of low income, even a lower-middle income family. The $20 a week increase in petrol or meat pales in comparison to the explosion in rental prices in the last 5+years.
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