Alarm as taxman takes interest
April 25, 2012


A NEW tax ruling sounds a warning to some of Australia's 1.5 million property investors and may cost them thousands of dollars in tax breaks, experts say.

The Australian Taxation Office has flagged it will crack down on property investors claiming deductions for interest expenses on certain types of loan arrangements.

Property owners using some or all of the rental income from an investment property to pay off their own home loan while adding the interest from the investment loan to the principal and claiming it as a deduction would come under scrutiny, accountants BDO said.


In a determination last month, the ATO said it would reject such arrangements.

''People are trying to divert all the rental income off into their home loan. That's pushing it too far and that's what the Tax Office is getting at,'' said Age columnist and tax expert Max Newnham.

The change would affect one of the ''big ticket'' items, claiming interest paid, which landlords rely on when lodging their tax return, said BDO property tax specialist Eddie Chung. ''Any loan arrangement that incorporates features that would effectively give rise to the capitalisation of interest on an investment loan while the loan repayments are used to pay down the principal of a private loan is now under the spotlight,'' he said.

Investors relying on a larger tax deduction to reduce their expenses would feel a ''real financial squeeze'', said Andrew Gardiner of the National Tax and Accountants Association.

The ATO's determination will apply retrospectively and could affect a landlord's past income and deductions, potentially costing them thousands of dollars.

Property investors should be conservative and avoid claiming deductions for any compounding interest on their investment loan, Mr Gardiner said.

It was difficult to quantify how many investors would be affected, Mr Newnham said. ''Of our clients, I'd be surprised if 10 per cent were doing it,'' he said.

Read more: http://www.theage.com.au/business/property/alarm-as-taxman-takes-interest-20120424-1xjbv.html#ixzz1sziL8w1v

sounds like the rich getting caught out playing silly buggers because they don't believe they should have to pay tax. All Liberal voters naturally, it's the born to rule mentality.

I dunno about this. the thing is these "investors" set up these things in the "good times". Now times are hard and they cant unload the properties. Stopping them from being able to pay their mortgages is going to cause some problems.

SOB

nairbe wrote on Apr 25^th, 2012 at 8:42am:

sounds like the rich getting caught out playing silly buggers because they don't believe they should have to pay tax. All Liberal voters naturally, it's the born to rule mentality.

http://i831.photobucket.com/albums/zz236/Maldoror_2009/bullshit.gif

Sounds more like the stupid Govt telling people how to spend their own income. >:(

Yeah real smart sticking it up property investors so they will just invest their cash somewhere else.  ::)  Less properties available for rent will just put the price of rents up.

A real good tactic ATO.... :(

No brains and happy with out them.... :(

Swagman wrote on Apr 25^th, 2012 at 9:52am:

nairbe wrote on Apr 25th, 2012 at 8:42am: sounds like the rich getting caught out playing silly buggers because they don't believe they should have to pay tax. All Liberal voters naturally, it's the born to rule mentality. http://i831.photobucket.com/albums/zz236/Maldoror_2009/bullshit.gif Sounds more like the stupid Govt telling people how to spend their own income. >:( Yeah real smart sticking it up property investors so they will just invest their cash somewhere else.  ::)  Less properties available for rent will just put the price of rents up. A real good tactic ATO.... :( No brains and happy with out them.... :(

Good ! Let them invest it somewhere else instead of denying others a place to live.

Sir lastnail wrote on Apr 25^th, 2012 at 12:36pm:

Swagman wrote on Apr 25th, 2012 at 9:52am: nairbe wrote on Apr 25th, 2012 at 8:42am: sounds like the rich getting caught out playing silly buggers because they don't believe they should have to pay tax. All Liberal voters naturally, it's the born to rule mentality. http://i831.photobucket.com/albums/zz236/Maldoror_2009/bullshit.gif Sounds more like the stupid Govt telling people how to spend their own income. >:( Yeah real smart sticking it up property investors so they will just invest their cash somewhere else.  ::)  Less properties available for rent will just put the price of rents up. A real good tactic ATO.... :( No brains and happy with out them.... :( Good ! Let them invest it somewhere else instead of denying others a place to live.

Just how are they denying people places to live?

They are investing in houses.  They are providing more places to live? :(

Swagman wrote on Apr 25^th, 2012 at 12:39pm:

Sir lastnail wrote on Apr 25th, 2012 at 12:36pm: Swagman wrote on Apr 25th, 2012 at 9:52am: nairbe wrote on Apr 25th, 2012 at 8:42am: sounds like the rich getting caught out playing silly buggers because they don't believe they should have to pay tax. All Liberal voters naturally, it's the born to rule mentality. http://i831.photobucket.com/albums/zz236/Maldoror_2009/bullshit.gif Sounds more like the stupid Govt telling people how to spend their own income. >:( Yeah real smart sticking it up property investors so they will just invest their cash somewhere else.  ::)  Less properties available for rent will just put the price of rents up. A real good tactic ATO.... :( No brains and happy with out them.... :( Good ! Let them invest it somewhere else instead of denying others a place to live. Just how are they denying people places to live? They are investing in houses.  They are providing more places to live? :(

I should correct that and say places that they can own for themselves !! Do you need a further explanation ?

Quote:

Just how are they denying people places to live? They are investing in houses.  They are providing more places to live?

True.

Pity that the average person can't afford to pay the ever increasing astronomical rents though.

Sir lastnail wrote on Apr 25^th, 2012 at 12:44pm:

I should correct that and say places that they can own for themselves !! Do you need a further explanation ?

Yes, how do they prevent people from owning their own homes?

Swagman wrote on Apr 25^th, 2012 at 12:51pm:

Sir lastnail wrote on Apr 25th, 2012 at 12:44pm: I should correct that and say places that they can own for themselves !! Do you need a further explanation ? Yes, how do they prevent people from owning their own homes?

The tax system favours people who own investment properties over those that just want to own one joint to live in for themselves. As such they can buy as many joints as they like and get tenants to pay it off for them with all of the tax concessions that go along with it whilst first home owners don't get those privileges. It kind of sucks doesn't it  !!

Lastnail - why do you hate property investors so much????

My parents have done well out of it.

Rather than knock it, try it yourself.

Andrei.Hicks wrote on Apr 25^th, 2012 at 1:00pm:

Lastnail - why do you hate property investors so much???? My parents have done well out of it. Rather than knock it, try it yourself.

Because land and property speculation ruins economies and then joe battler has to go and pay for it later with his taxes :( Do you need any examples of ruined economies ?

Why don't you invest in manufacturing like Germany does and then you could be part of one of the worlds largest export economies just like germany is ;) You won't get that out of flipping houses ;)

Sir lastnail wrote on Apr 25^th, 2012 at 12:58pm:

Swagman wrote on Apr 25th, 2012 at 12:51pm: Sir lastnail wrote on Apr 25th, 2012 at 12:44pm: I should correct that and say places that they can own for themselves !! Do you need a further explanation ? Yes, how do they prevent people from owning their own homes? The tax system favours people who own investment properties over those that just want to own one joint to live in for themselves. As such they can buy as many joints as they like and get tenants to pay it off for them with all of the tax concessions that go along with it whilst first home owners don't get those privileges. It kind of sucks doesn't it  !!

There's no denying that owner occupiers have to compete with property investors and that competition can inflate housing prices and yeah some people may be excluded as a result, that's why the Govt has home buyer grants and stamp duty exemptions.

Maybe they can do more on this front but deterring property investors is not the answer.  The economy needs their investment it creates jobs so that people can earn an income to buy their own homes.

Sir lastnail wrote on Apr 25^th, 2012 at 1:10pm:

Andrei.Hicks wrote on Apr 25th, 2012 at 1:00pm: Lastnail - why do you hate property investors so much???? My parents have done well out of it. Rather than knock it, try it yourself. Because land and property speculation ruins economies and then joe battler has to go and pay for it later with his taxes :( Do you need any examples of ruined economies ?

Well you dont have to worry anymore mate. Only the really rich ones can do it now and they come along and buy up all of it. Just 1 or 2 really rich ones. Normal ppl cant do it anymore anyway. Its not possible. And if they did it a few years ago they are in trouble now because they cant pay all the rates and taxes etc thats being heaped on them and they cant sell either and they prolly have "negatively geared" mortgages that the repayments have gone up on and they have to put up the rents to pay them.

SOB

Swagman wrote on Apr 25^th, 2012 at 1:11pm:

Sir lastnail wrote on Apr 25th, 2012 at 12:58pm: Swagman wrote on Apr 25th, 2012 at 12:51pm: Sir lastnail wrote on Apr 25th, 2012 at 12:44pm: I should correct that and say places that they can own for themselves !! Do you need a further explanation ? Yes, how do they prevent people from owning their own homes? The tax system favours people who own investment properties over those that just want to own one joint to live in for themselves. As such they can buy as many joints as they like and get tenants to pay it off for them with all of the tax concessions that go along with it whilst first home owners don't get those privileges. It kind of sucks doesn't it  !! There's no denying that owner occupiers have to compete with property investors and that competition can inflate housing prices and yeah some people may be excluded as a result, that's why the Govt has home buyer grants and stamp duty exemptions. Maybe they can do more on this front but deterring property investors is not the answer.  The economy needs their investment it creates jobs so that people can earn an income to buy their own homes.

So why the downturn in the economy in Victoria ? What has happened to the great big property industry ?

And do you think the talk of the town in germany is about flipping houses to each other and chiselling money off each other in a property ponzi scheme or is it about the next new product they are going to manufacture and export to rest of the world ?

Inflating house prices is an understatement !! They should abolish negative gearing or only make it apply to brand new house and land packages only.

Sir Spot of Borg wrote on Apr 25^th, 2012 at 1:14pm:

Sir lastnail wrote on Apr 25th, 2012 at 1:10pm: Andrei.Hicks wrote on Apr 25th, 2012 at 1:00pm: Lastnail - why do you hate property investors so much???? My parents have done well out of it. Rather than knock it, try it yourself. Because land and property speculation ruins economies and then joe battler has to go and pay for it later with his taxes :( Do you need any examples of ruined economies ? Well you dont have to worry anymore mate. Only the really rich ones can do it now and they come along and buy up all of it. Just 1 or 2 really rich ones. Normal ppl cant do it anymore anyway. Its not possible. And if they did it a few years ago they are in trouble now because they cant pay all the rates and taxes etc thats being heaped on them and they cant sell either and they prolly have "negatively geared" mortgages that the repayments have gone up on and they have to put up the rents to pay them. SOB

And here's the solution to it. Quite simple really ;)

http://vimeo.com/38500767


Quote:

REAL ESTATE 4 RAN$OM outlines a genuine alternative to the global property speculation that forced so many into debt. Doubling the pressure, the tax game has become just that, with tax havens a favoured option for the wealthy. The result - we are taxing the wrong things, causing more problems whilst bankrupting once proud economies. A systemic change is essential if we are to avoid these damaging boom-bust-bailouts.

Sir lastnail wrote on Apr 25^th, 2012 at 1:18pm:

They should abolish negative gearing or only make it apply to brand new house and land packages only.

It's not that simple.  The value of the existing investment properties would plummet.  You'd create an Australian based GFC equivalent.  These properties are already being used as securities for business as well.

Any benefit would be more than wiped out.

Cause and effect.

Swagman wrote on Apr 25^th, 2012 at 1:25pm:

Sir lastnail wrote on Apr 25th, 2012 at 1:18pm: They should abolish negative gearing or only make it apply to brand new house and land packages only. It's not that simple.  The value of the existing investment properties would plummet.  You'd create an Australian based GFC equivalent.  These properties are already being used as securities for business as well. Any benefit would be more than wiped out. Cause and effect.

Best to introduce it right after a major property crash ! Some short term suffering for sure but long term benefits for the majority.

I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election.

People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !!

Sir lastnail wrote on Apr 25^th, 2012 at 1:38pm:

Swagman wrote on Apr 25th, 2012 at 1:25pm: Sir lastnail wrote on Apr 25th, 2012 at 1:18pm: They should abolish negative gearing or only make it apply to brand new house and land packages only. It's not that simple.  The value of the existing investment properties would plummet.  You'd create an Australian based GFC equivalent.  These properties are already being used as securities for business as well. Any benefit would be more than wiped out. Cause and effect. Best to introduce it right after a major property crash ! Some short term suffering for sure but long term benefits for the majority. I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election. People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !!

No house or land is worth what is being asked to pay for it. I consisder it a joke. People cannot afford to pay their mortgage and rent is disgraceful.

Firstly get rid of rent assistance and watch rent prices crumble  because many will not be able to rent at given prices and owners will not be able to rent their properties so will have to lower what they are asking.

Secondly do something about the negative gearing. It is causing many Australian families NOT to be able to buy a house when working Australians should easily be able to afford to buy.

Sir lastnail wrote on Apr 25^th, 2012 at 1:21pm:

Sir Spot of Borg wrote on Apr 25th, 2012 at 1:14pm: Sir lastnail wrote on Apr 25th, 2012 at 1:10pm: Andrei.Hicks wrote on Apr 25th, 2012 at 1:00pm: Lastnail - why do you hate property investors so much???? My parents have done well out of it. Rather than knock it, try it yourself. Because land and property speculation ruins economies and then joe battler has to go and pay for it later with his taxes :( Do you need any examples of ruined economies ? Well you dont have to worry anymore mate. Only the really rich ones can do it now and they come along and buy up all of it. Just 1 or 2 really rich ones. Normal ppl cant do it anymore anyway. Its not possible. And if they did it a few years ago they are in trouble now because they cant pay all the rates and taxes etc thats being heaped on them and they cant sell either and they prolly have "negatively geared" mortgages that the repayments have gone up on and they have to put up the rents to pay them. SOB And here's the solution to it. Quite simple really ;) http://vimeo.com/38500767 Quote: REAL ESTATE 4 RAN$OM outlines a genuine alternative to the global property speculation that forced so many into debt. Doubling the pressure, the tax game has become just that, with tax havens a favoured option for the wealthy. The result - we are taxing the wrong things, causing more problems whilst bankrupting once proud economies. A systemic change is essential if we are to avoid these damaging boom-bust-bailouts.

Is that a video in there? Shows nothing on my screen., The flash is stuffed up on the computer as i have said many times. Can you just tell me what it says? What is the solution?

SOB

Sir Spot of Borg wrote on Apr 25^th, 2012 at 7:33pm:

Is that a video in there? Shows nothing on my screen., The flash is stuffed up on the computer as i have said many times. Can you just tell me what it says? What is the solution? SOB

Try watching it from here

http://www.prosper.org.au/

Essentially the solution is to replace about 120 existing taxes that stifle business with one land tax !!

This will stop speculators sitting on land and making money from doing no work at all as well as forcing up land prices. It will also focus investment into real businesses that are the engine room of the economy !!

Tax the the freeloaders is the key message here !!

beware wrote on Apr 25^th, 2012 at 7:22pm:

Sir lastnail wrote on Apr 25th, 2012 at 1:38pm: Swagman wrote on Apr 25th, 2012 at 1:25pm: Sir lastnail wrote on Apr 25th, 2012 at 1:18pm: They should abolish negative gearing or only make it apply to brand new house and land packages only. It's not that simple.  The value of the existing investment properties would plummet.  You'd create an Australian based GFC equivalent.  These properties are already being used as securities for business as well. Any benefit would be more than wiped out. Cause and effect. Best to introduce it right after a major property crash ! Some short term suffering for sure but long term benefits for the majority. I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election. People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !! No house or land is worth what is being asked to pay for it. I consisder it a joke. People cannot afford to pay their mortgage and rent is disgraceful. Firstly get rid of rent assistance and watch rent prices crumble  because many will not be able to rent at given prices and owners will not be able to rent their properties so will have to lower what they are asking. Secondly do something about the negative gearing. It is causing many Australian families NOT to be able to buy a house when working Australians should easily be able to afford to buy.

Yes rent assistance is welfare for property speculators and hoarders who use tenants to pay off their dumps with absolutely no benefit to the tenants :(

Again we see the taxation system misused to prop up the property industry :(

Sir lastnail wrote on Apr 25^th, 2012 at 9:17pm:

Sir Spot of Borg wrote on Apr 25th, 2012 at 7:33pm: Is that a video in there? Shows nothing on my screen., The flash is stuffed up on the computer as i have said many times. Can you just tell me what it says? What is the solution? SOB Try watching it from here http://www.prosper.org.au/ Essentially the solution is to replace about 120 existing taxes that stifle business with one land tax !! This will stop speculators sitting on land and making money from doing no work at all as well as forcing up land prices. It will also focus investment into real businesses that are the engine room of the economy !! Tax the the freeloaders is the key message here !!

Damn. I had hoped you had an actual solution. Silly me. The tax sounds like the GST. Supposed to replace a bunch of existing taxes but all they did was rename them.

Not sure who the "freeloaders" are since most ppl that try to do the rent-mortgage thing have worked a long time to get the money to even try to speculate. Sounds like you are jealous to me but that is just the impression i get. You have to work so everyone else has to.

It wont effect the big property speculators. The ones that buy all the properties in an area. They are rich already. Its the ones that have just 1 "investment house" and are trying to pay it off with a mortgage but the rent doesnt cover it and they prolly are either renting where they are living now or trying to buy a 2nd house to live in. These ppl are trying to get ahead. Its not working.

SOB

Sir lastnail wrote on Apr 25^th, 2012 at 1:38pm:

I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election. People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !!

I dont know anyone who thinks investing in property is a good idea as there are too many taxes and the return on capital is pathetic.

We already have a "land tax" for investment properties, i was put off by the $14,000 dollar land tax bill for a property which would mean about $300 per week from the rent just to cover land tax.
Rents are outrageous because of the government land tax that has to be paid by the tennant.

When you add up land tax,rates,insurance,property management fees there is not a lot left over for the investor who then gets slugged with capital gains tax when they sell.

If you had a million dollars would it earn more just by putting it in a term deposit or would you get a better return on capital by buying a house with it to rent out ?
I know someone who recently sold a rental property and they make more from the interest than they made from rent.

Sir Spot of Borg wrote on Apr 26^th, 2012 at 8:01am:

Damn. I had hoped you had an actual solution. Silly me. The tax sounds like the GST. Supposed to replace a bunch of existing taxes but all they did was rename them. Not sure who the "freeloaders" are since most ppl that try to do the rent-mortgage thing have worked a long time to get the money to even try to speculate. Sounds like you are jealous to me but that is just the impression i get. You have to work so everyone else has to. It wont effect the big property speculators. The ones that buy all the properties in an area. They are rich already. Its the ones that have just 1 "investment house" and are trying to pay it off with a mortgage but the rent doesnt cover it and they prolly are either renting where they are living now or trying to buy a 2nd house to live in. These ppl are trying to get ahead. Its not working. SOB

The  don't complain when there is no businesses left to give your kids a job because all of the money was wasted on land deals creating absolutely nothing :(

You reap what you sow !!

Yes and I am so jealous that we have to pay bribe money to foreign car companies to make cars for us because we only invest in junk property and not manufacturing. Yes I am very jealous of that situation :D LOL

Baronvonrort wrote on Apr 26^th, 2012 at 12:05pm:

Sir lastnail wrote on Apr 25th, 2012 at 1:38pm: I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election. People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !! I dont know anyone who thinks investing in property is a good idea as there are too many taxes and the return on capital is pathetic. We already have a "land tax" for investment properties, i was put off by the $14,000 dollar land tax bill for a property which would mean about $300 per week from the rent just to cover land tax. Rents are outrageous because of the government land tax that has to be paid by the tennant. When you add up land tax,rates,insurance,property management fees there is not a lot left over for the investor who then gets slugged with capital gains tax when they sell. If you had a million dollars would it earn more just by putting it in a term deposit or would you get a better return on capital by buying a house with it to rent out ? I know someone who recently sold a rental property and they make more from the interest than they made from rent.

That's good but they should increase land tax to 6% as that video suggests. This would discourage speculators,  hoarders and land banking.

Fortunately land tax is not paid on your principle place of residence which is fair !!

http://www.trilogygroup.com.au/articles/Land-Tax---The-Facts.html


Quote:

Land Tax is something we have written about previously this year but it is an area that we have considerable enquiries about so we thought we would provide information on the most frequently asked questions: What is Land Tax? It is an annual state government tax payable by the owner of the land. It is imposed in all states and ACT but not the Northern Territory. Each state and territory administers its own land tax laws. The laws are comparable between states with some variations. Do I have to pay Land Tax on my Principal Place of Residence? Your principal place of residence is generally exempt from land tax. Do I have to pay land tax on property that isn’t earning any income? Yes if your property is not exempt from land tax then it will be subject to land tax even if it is not earning income eg holiday house, hobby farm. If I sell land part way through the way, do I receive a part refund for the land tax that was paid? No, but the contract for the sale of the land may allow you to recover a portion of the land tax you paid from the purchaser. This is a matter for you to negotiate with purchaser prior to signing contract. Do I have to pay Land Tax if on the 31st December I am in the process of selling my principal place of residence by I have already purchased my new place of residence? You may be able to claim an exemption on both properties. Do I have to pay land tax on my newly constructed residence if it is not ready for occupancy by 31 December? If you buy land with the intention of building your place of residence, you can claim an exemption of up to 2 years after the date of purchase if you do not own and occupy an existing place of residence. Do I receive a rebate if my land is rented at 31 December and I occupy it as my principal place of residence? No if the property is taxed on the taxing date (31st December) then you are liable for the full amount of land tax for that year. Who is considered to be a land owner for land tax purposes? Sole owners, joint owners, companies, a trustee of a trust, a beneficiary of a trust, a shareholder in a home unit company are all considered land owners for land tax purposes.

Sir lastnail wrote on Apr 26^th, 2012 at 12:31pm:

Baronvonrort wrote on Apr 26th, 2012 at 12:05pm: Sir lastnail wrote on Apr 25th, 2012 at 1:38pm: I mean who wouldn't want to substitute 120 existing taxes for one land tax ? It's just that no political party has got the balls to do anything about it because they only care about getting voted in at the next election. People who invest in property and land are nothing more than bottom feeding parasites. They profit from doing no work and are rewarded for it !! I dont know anyone who thinks investing in property is a good idea as there are too many taxes and the return on capital is pathetic. We already have a "land tax" for investment properties, i was put off by the $14,000 dollar land tax bill for a property which would mean about $300 per week from the rent just to cover land tax. Rents are outrageous because of the government land tax that has to be paid by the tennant. When you add up land tax,rates,insurance,property management fees there is not a lot left over for the investor who then gets slugged with capital gains tax when they sell. If you had a million dollars would it earn more just by putting it in a term deposit or would you get a better return on capital by buying a house with it to rent out ? I know someone who recently sold a rental property and they make more from the interest than they made from rent. That's good but they should increase land tax to 6% as that video suggests. This would discourage speculators,  hoarders and land banking. Fortunately land tax is not paid on your principle place of residence which is fair !! http://www.trilogygroup.com.au/articles/Land-Tax---The-Facts.html Quote: Land Tax is something we have written about previously this year but it is an area that we have considerable enquiries about so we thought we would provide information on the most frequently asked questions: What is Land Tax? It is an annual state government tax payable by the owner of the land. It is imposed in all states and ACT but not the Northern Territory. Each state and territory administers its own land tax laws. The laws are comparable between states with some variations. Do I have to pay Land Tax on my Principal Place of Residence? Your principal place of residence is generally exempt from land tax. Do I have to pay land tax on property that isn’t earning any income? Yes if your property is not exempt from land tax then it will be subject to land tax even if it is not earning income eg holiday house, hobby farm. If I sell land part way through the way, do I receive a part refund for the land tax that was paid? No, but the contract for the sale of the land may allow you to recover a portion of the land tax you paid from the purchaser. This is a matter for you to negotiate with purchaser prior to signing contract. Do I have to pay Land Tax if on the 31st December I am in the process of selling my principal place of residence by I have already purchased my new place of residence? You may be able to claim an exemption on both properties. Do I have to pay land tax on my newly constructed residence if it is not ready for occupancy by 31 December? If you buy land with the intention of building your place of residence, you can claim an exemption of up to 2 years after the date of purchase if you do not own and occupy an existing place of residence. Do I receive a rebate if my land is rented at 31 December and I occupy it as my principal place of residence? No if the property is taxed on the taxing date (31st December) then you are liable for the full amount of land tax for that year. Who is considered to be a land owner for land tax purposes? Sole owners, joint owners, companies, a trustee of a trust, a beneficiary of a trust, a shareholder in a home unit company are all considered land owners for land tax purposes.

The land tax on a property i looked at was $14,000 per  year.

That is almost $300 per week in land tax and you claimed investors get tax breaks!

Do you think this land tax could be the reason rents are so high?

If no investors go into housing then who are the poor people going to rent properties from?

Baronvonrort wrote on Apr 26^th, 2012 at 12:54pm:

The land tax on a property i looked at was $14,000 per  year. That is almost $300 per week in land tax and you claimed investors get tax breaks! Do you think this land tax could be the reason rents are so high? If no investors go into housing then who are the poor people going to rent properties from?

That was the lame excuse they use to justify negative gearing but it is all one big lie. We have had negative gearing for decades and guess what we now have a rental accommodation shortage so they keep telling us :( So the advantages of negative gearing in providing low cost rental accommodation is just one big lie !!

Most investments in property have been in recycling existing property and only 10% has gone into brand new dwellings. I hardly call that an argument in favour of the poor people looking for a reasonable place to rent !!

My advice to people like you is to stop denying someone else from owning their own home. Your greed doesn't have precedence over someone looking for a roof over their head.

Sir lastnail wrote on Apr 26^th, 2012 at 2:28pm:

Baronvonrort wrote on Apr 26th, 2012 at 12:54pm: The land tax on a property i looked at was $14,000 per  year. That is almost $300 per week in land tax and you claimed investors get tax breaks! Do you think this land tax could be the reason rents are so high? If no investors go into housing then who are the poor people going to rent properties from? That was the lame excuse they use to justify negative gearing but it is all one big lie. We have had negative gearing for decades and guess what we now have a rental accommodation shortage so they keep telling us :( So the advantages of negative gearing in providing low cost rental accommodation is just one big lie !! Most investments in property have been in recycling existing property and only 10% has gone into brand new dwellings. I hardly call that an argument in favour of the poor people looking for a reasonable place to rent !! My advice to people like you is to stop denying someone else from owning their own home. Your greed doesn't have precedence over someone looking for a roof over their head.

If we have a rental property shortage will taxing those investors out of property increase the amount of properties for rent or take them away?

Does $14K per annum in land tax offset any gains from negative gearing?

Did rents go up when this land tax was imposed, should you blame the government or the landlord for that increase?

If there are no people investing in housing then where are these rental properties going to come from?

I am not denying anyone from owning their own home i hear losers blaming others for the fact they are renters.

Sir lastnail wrote on Apr 26^th, 2012 at 12:17pm:

Sir Spot of Borg wrote on Apr 26th, 2012 at 8:01am: Damn. I had hoped you had an actual solution. Silly me. The tax sounds like the GST. Supposed to replace a bunch of existing taxes but all they did was rename them. Not sure who the "freeloaders" are since most ppl that try to do the rent-mortgage thing have worked a long time to get the money to even try to speculate. Sounds like you are jealous to me but that is just the impression i get. You have to work so everyone else has to. It wont effect the big property speculators. The ones that buy all the properties in an area. They are rich already. Its the ones that have just 1 "investment house" and are trying to pay it off with a mortgage but the rent doesnt cover it and they prolly are either renting where they are living now or trying to buy a 2nd house to live in. These ppl are trying to get ahead. Its not working. SOB The  don't complain when there is no businesses left to give your kids a job because all of the money was wasted on land deals creating absolutely nothing :( You reap what you sow !! Yes and I am so jealous that we have to pay bribe money to foreign car companies to make cars for us because we only invest in junk property and not manufacturing. Yes I am very jealous of that situation :D LOL

Small business is being put out of business by big business. I dont see what house investment has to do with it.

SOB

Sir lastnail wrote on Apr 25^th, 2012 at 1:18pm:

Swagman wrote on Apr 25th, 2012 at 1:11pm: Sir lastnail wrote on Apr 25th, 2012 at 12:58pm: Swagman wrote on Apr 25th, 2012 at 12:51pm: Sir lastnail wrote on Apr 25th, 2012 at 12:44pm: I should correct that and say places that they can own for themselves !! Do you need a further explanation ? Yes, how do they prevent people from owning their own homes? The tax system favours people who own investment properties over those that just want to own one joint to live in for themselves. As such they can buy as many joints as they like and get tenants to pay it off for them with all of the tax concessions that go along with it whilst first home owners don't get those privileges. It kind of sucks doesn't it  !! There's no denying that owner occupiers have to compete with property investors and that competition can inflate housing prices and yeah some people may be excluded as a result, that's why the Govt has home buyer grants and stamp duty exemptions. Maybe they can do more on this front but deterring property investors is not the answer.  The economy needs their investment it creates jobs so that people can earn an income to buy their own homes. So why the downturn in the economy in Victoria ? What has happened to the great big property industry ? And do you think the talk of the town in germany is about flipping houses to each other and chiselling money off each other in a property ponzi scheme or is it about the next new product they are going to manufacture and export to rest of the world ? Inflating house prices is an understatement !! They should abolish negative gearing or only make it apply to brand new house and land packages only.

Thankyou Thelastnail........... That just about sums it up for me and every other person who is on a low-income.... A better question to ask rather tha "why should the gov. take away my tax rebates" is "why should low-income ANYONE have to work for most of their life to simply pay for somewhere to live" for cris sakesss....... Anybody would be mistaking for believing ozuns are short of land. lol

there are much better ideas like mentioed - put capital to work instead of letting bludgers scab of the poor through tax breaks.
yeah it might be a good lark, but I'm no pyschopath - I have a conscience ad I need to know that the money I earn isn't made by keeping the low-paid living in the hovels that constitute the bulk of the "rentor houses" that never get improved because they are simply a means to gain capital through the efforts of other people working hard to save money for their first house.

I have rented through choice for over 35 years "I couldn't stand the thought of spending my weekends and holidays working on a mill-stone" and I have very rarely been able to rent an affordable dwelling that has any of the modern creature comforts - they are almost always "bare-back" - no insulation, no solar hot water, no room for dish washers, zero garden yards with lots of grass to mow and weed. 

You bunch of miserable pricks that feed off the bulk of Australians income should be ashamed of your scabbing. I've got no truck with anybody who wants to own a house to live in - but what is the rationale for giving fat lazy shiney arse middle-class wankers the tax break for owning a second home how the bugger does that help anyone? It's just another classic example of the rich helping themselves to more while they can.

What galls me the most is that invariabley the people who make money this way are the most vocal when it comes to complaining about how lazy most workers are........ :o :o :o :o and tey usually take theri holidays overseas and complain about the sky high cost of wages in Australia like they are some sort of business owner lol   :D :D :D :D

Dooley wrote on Apr 27^th, 2012 at 1:16am:

Thankyou Thelastnail........... That just about sums it up for me and every other person who is on a low-income.... A better question to ask rather tha "why should the gov. take away my tax rebates" is "why should low-income ANYONE have to work for most of their life to simply pay for somewhere to live" for cris sakesss....... Anybody would be mistaking for believing ozuns are short of land. lol there are much better ideas like mentioed - put capital to work instead of letting bludgers scab of the poor through tax breaks. yeah it might be a good lark, but I'm no pyschopath - I have a conscience ad I need to know that the money I earn isn't made by keeping the low-paid living in the hovels that constitute the bulk of the "rentor houses" that never get improved because they are simply a means to gain capital through the efforts of other people working hard to save money for their first house. I have rented through choice for over 35 years "I couldn't stand the thought of spending my weekends and holidays working on a mill-stone" and I have very rarely been able to rent an affordable dwelling that has any of the modern creature comforts - they are almost always "bare-back" - no insulation, no solar hot water, no room for dish washers, zero garden yards with lots of grass to mow and weed.  You bunch of miserable pricks that feed off the bulk of Australians income should be ashamed of your scabbing. I've got no truck with anybody who wants to own a house to live in - but what is the rationale for giving fat lazy shiney arse middle-class wankers the tax break for owning a second home how the bugger does that help anyone? It's just another classic example of the rich helping themselves to more while they can. What galls me the most is that invariabley the people who make money this way are the most vocal when it comes to complaining about how lazy most workers are........ :o :o :o :o and tey usually take theri holidays overseas and complain about the sky high cost of wages in Australia like they are some sort of business owner lol   :D :D :D :D

what's even worse is that if you live in a rented dump paying it off for the scumbag owner who has no intention of keeping it for the long run. Then one day out of the blue you get a letter to vacate because the scumbag and his real estate agent want to flip the property and make a quick buck. :( Then at great inconvenience and expense you have to find another dump to rent or should I say pay off for somebody else so they can flip that as well and so on. There is no consideration or compensation for the tenants whatsoever. It really is an inequitable and corrupt system !!

Sir lastnail wrote on Apr 27^th, 2012 at 1:14pm:

Dooley wrote on Apr 27th, 2012 at 1:16am: Thankyou Thelastnail........... That just about sums it up for me and every other person who is on a low-income.... A better question to ask rather tha "why should the gov. take away my tax rebates" is "why should low-income ANYONE have to work for most of their life to simply pay for somewhere to live" for cris sakesss....... Anybody would be mistaking for believing ozuns are short of land. lol there are much better ideas like mentioed - put capital to work instead of letting bludgers scab of the poor through tax breaks. yeah it might be a good lark, but I'm no pyschopath - I have a conscience ad I need to know that the money I earn isn't made by keeping the low-paid living in the hovels that constitute the bulk of the "rentor houses" that never get improved because they are simply a means to gain capital through the efforts of other people working hard to save money for their first house. I have rented through choice for over 35 years "I couldn't stand the thought of spending my weekends and holidays working on a mill-stone" and I have very rarely been able to rent an affordable dwelling that has any of the modern creature comforts - they are almost always "bare-back" - no insulation, no solar hot water, no room for dish washers, zero garden yards with lots of grass to mow and weed.  You bunch of miserable pricks that feed off the bulk of Australians income should be ashamed of your scabbing. I've got no truck with anybody who wants to own a house to live in - but what is the rationale for giving fat lazy shiney arse middle-class wankers the tax break for owning a second home how the bugger does that help anyone? It's just another classic example of the rich helping themselves to more while they can. What galls me the most is that invariabley the people who make money this way are the most vocal when it comes to complaining about how lazy most workers are........ :o :o :o :o and tey usually take theri holidays overseas and complain about the sky high cost of wages in Australia like they are some sort of business owner lol   :D :D :D :D what's even worse is that if you live in a rented dump paying it off for the scumbag owner who has no intention of keeping it for the long run. Then one day out of the blue you get a letter to vacate because the scumbag and his real estate agent want to flip the property and make a quick buck. :( Then at great inconvenience and expense you have to find another dump to rent or should I say pay off for somebody else so they can flip that as well and so on. There is no consideration or compensation for the tenants whatsoever. It really is an inequitable and corrupt system !!

There is no way anyone can sell a property nowadays, pay all the tax and crap, and buy another comparable one with the money left over. The days of "flipping" are gone.

If you choose to rent instead of buy your own house then you can expect to have to move sometime. Its why ppl buy their own houses - so they can put down roots.

SOB