Bill shorten poised to take negative gearing.

I feel sorry for families wanting to get a home in this current market.

 

What suburbs ?

 

Strathpine and north, especially units. Not everyone is a family who expects several bedrooms. My first residence was in Lawnton and it had two bedrooms. Lived there for eight years until I could afford a "median" three bedroom house in a family-friendly suburb.

There are about 4 million people living in Sydney. The other 20 million Australians live elsewhere. Property is NOT unaffordable for all Australians.

 

@Angel

Shhh. Dont give away the locations.

He's from Sydney. He'll sell his 1 bed unit and come up here and buy an entire suburb.

 

The liberal side of NG, CGT

Treasurer warned of property 'ponzi' scheme

'Ponzi' is becoming more frequent in MSM in the context of RE...surprising though that it is originating from the liberal mob.

 

Lets not have logic and reality get in the way of a good argument.
I'm sure many FHB think that Australia ends at Asquith and Engadine.

 

Has negative gearing really been around for 100 years?

That’s right – 100 years we’ve had negative gearing. Politicians from all parties are floating changes to negative gearing. They can’t resist the temptation to tinker with something that is working well.​

Don't Play With Property

 

At least back to 1936, but may have seen some changes during the years since: Louis Christopher on Twitter

 

Negative gearing still on the agenda as per Bill Shorten. Interesting speech he gave at the National Press Club this week - he spoke well considering Labour's previous performances.

Negative gearing also in the limelight today during question time.

Looks like this will be an issue that will be carried through until the election. Will certainly be popular amongst those waiting on the sidelines for their first home and the younger, disenfranchised voters.

Quite a change when you consider that NG has only ever been mentioned in passing when housing affordability first became an issue

 

Yes restricting negative gearing will be a significant vote winner, most speculators are already coalition voters, the vast majority of people do not use NG are are P´d off with it. Myself and several other people I know will switch to Labor just on this issue. Never thought I would vote Labor but on this issue yes (unless the Liberals can come up with something similar).

 

Not sure where you get the idea that restricting negative gearing will be a significant vote winner.

Fairfax-Ipsos poll: Coalition support holds up at 53-47 as Malcolm Turnbull slides

Forty-three per cent of respondents think the Coalition's policies are better suited to the economic needs of the country - a drop of seven points for the ALP on this index since last polled in April last year, and up 2 per centage points for the Coalition in that time.

The survey suggests the ALP vote is now being adversely affected by Mr Shorten's plans to reduce generous superannuation tax breaks for the wealthy, and to limit the scope of negative gearing tax breaks on investment properties by restricting it to new investment housing exclusively, and halving the capital gains tax concession on them.

 

Id say by leaving it on new it encourages new builds and strengthening the economy in the building sector. It would encourage ppl to continue investing in developments that have ongoing benefits to the economy

 

Sorry but I'm not following - it says 42% disagree with Labour's NG proposal I.e 58% agree or are undecided. Also considering that NGers make up only 10% of the population (stats as per LNP), I don't think it would be very difficult to convince the majority to vote for its abolition - especially when it is being framed as welfare for the rich.

There is still plenty of time for those figures to change, of course. However, Labour's job is made easier with the LNP back flipping from its original stance of "tax increases/reform to reduce government debt and prepare for tomorrow's economy" to "tax cuts for a precarious and fragile economy".

 

Not going to happen.

 

You are too kind with the statistics. If we look at the statistics quoted by the petition to save NG itself, the fraction of population effected is minuscule.

These statistics are from the website Don't Play With Property and they are making a case for keeping NG:

1. 1.2 million negatively gear their investment property. So the NG is utilized only by 5% of the Australian population.
2. 840,000 Australians with taxable incomes below $80,000 a year negatively gear investment properties. Possible interpretations:
   • 360,000 users of NG are on such high incomes that even after NG they are unable to reduce their incomes to below 80,000. Time to call buyer's and tax agents.
   • The remaining 840,000 are successful in utilizing this income tax loop hole to reduce their taxable income to below 80,000
3. The average net rental loss claimed is $9,500 per year.
   • If 1.2 million are claiming an average loss of 9500, it is a rort of 11.4 billion a year that the tax payer foots every year.
   • This is net rental loss. Does not include financial engineering which goes into calculating the net e.g. deductions and loss/income distributions via ownership structures.
4. 72.8% of investors own only one investment property, while an additional 18% own two properties. Point 1 gets eroded even further as the utility of NG to owners with more than 2 properties constitutes only 5*(1-.728-.18)=0.46% of population. Most of the beneficiaries are on this site, the others in parliaments across the country.
5. 58% of deductions by value go to Australians with taxable income less than $80,000. Only 13% go to those with taxable incomes above $200,000. Enough has been written about what this statistic hides rather than reveals.See point 2 above.

Basically what the petition says is that we should keep a rort costing us 11.4 billion a year, predominantly benefiting 0.46% of the population, who are able to reduce their tax liabilities to below 80,000.

Footnote: These are just the conservative statistics from a petition trying to save the NG. The discussion has been limited just to NG, evil twin CGT has not been included.

 

I'm not sure what relevance this actually has. Especially considering the post was about Sydney.

Unless you are advocating that teaching graduates and cops and other people in similar paid jobs buy in Brisbane and commute via plane to their jobs in Sydney? Or that teachers and cops and garbos aren't actually required in Sydney.

It's a serious issue that faces a lot of cities worldwide. Where Australia, and Sydney especially, falls down is not having a decent public transport network and only really having ongoing suburban sprawl.

 

So, has negative gearing really been around for 100 years?

EDIT: to clarify, I wasn't at all interested in the propaganda on the web site, I was under the impression NG was much newer and wanted to confirm it has actually been around for 100 years.

 

Longevity of a belief or policy is immaterial to its righteousness. Slavery, flat earth belief, voting rights for men only, colonialism have all persisted more than Negative gearing.

As someone wise said not a long time ago

Corollary: -that it is historic doesn't make it less real
Edit: Double copy and paste.

 

I think you are getting the wrong end of the stick here. I am opposed to retaining negative gearing in it's current form, so I am not using my question as a roundabout defense of negative gearing in it's current form.

I was previously led to believe that NG was introduced in the 80's. Now I read that negative gearing has been around for 100 years. Which led me to ask the question:

So, has negative gearing really been around for 100 years?​

It's a straighforward question and I am not sure why it can't have a straightforward answer. It either has been around for 100 years or it has not. I have no hidden agenda in asking this question. I just wanted to know.

I guess the next question is:- why have we been led to believe that Negative Gearing was introduced in the 80's, when in fact it has been around for much longer than that.

P.S. I still don't want negative gearing retained in it's current form.

Gees. That is a long post to get a simple answer to a simple question.

 

I think you're mixing up the fact that it was abolished for a short period in the 80s with the idea that it started in the 80s and that the terminology of negative gearing gained mainstream usage in that same period, the term negative gearing in Australia has a very different general usage than it's traditional meaning. For something to have been abolished, it necessarily had to exist prior to that period.

I don't know the specific answer but given it falls under the 1936 Income Tax Act I'd say it's probably fair to that it originated in some shape or form at least in 1936 and quite probably was treated similarly prior to that act being established.

Negative Gearing remains the red herring in all this. It's the sacrificial lamb used for political support by Labor to avoid targeting the real "problems" in the market (hello CGT and other tax concessions and the overall protectionism policies towards housing). The fact they're not even actually really doing much about it should make that even more obvious. The change will be minute, if noticed at all. It's a political stunt designed to do as little as possible about what has become a very real problem. The simple fact is that the median household should be able to afford the median house or you've got a distorted market and right now we've got a heavily distorted market because that correlation is completely out of whack in multiple markets, especially the biggest and most influential markets.