Shadow treasurer Chris Bowen flags Labor intention to wind back negative gearing

Quote:

Buying that second or third investment property to help fund retirement may be less attractive in future with Labor opening the door to a policy of tightening up negative gearing tax concessions, if elected. The possibility of less favourable rules for wealthy property investors came as Labor formally unveiled its proposed tax increases for high-end superannuants. But any negative gearing change, which has not been committed to, would have to be prospective in its application and would not affect existing landlords, said shadow treasurer, Chris Bowen. It would also need to be tailored to achieve the twin goals of returning funds to the federal budget and ensuring ongoing supply of new housing stock into the rental and purchasing markets. It is one of several prickly policy options being forced on both the government and the opposition as they look for ways to fund new promises while repairing a budget stricken with falling revenue and burgeoning fixed outlays on health, education, and social security. Unveiling Labor's new policy to lift taxes on superannuation earnings for the wealthy, Mr Bowen has committed a future Labor government to making budget savings over 10 years that exceed any new spending. And he has confirmed there will be other adjustments to the tax system to come, including possible changes to negative gearing - the longstanding tax break that allows investment property costs to be written-off against income for tax purposes. While no details have been released, such a move could be expected to cool currently overheated capital city property markets, which have been turbo-charged in recent times - particularly Sydney and Melbourne - by a combination of cheap money via record low interest rates, and generous negative gearing rules. The situation has shut many low income-earners and potential first homebuyers out of the market. Speaking at the National Press Club, Mr Bowen said it would be "irresponsible to rule out going to the next election with changes to, for example, negative gearing". "I have said our principle will be 1. Do not disadvantage people who have made investments in good faith under current rules. 2. Do not risk reducing the supply of new housing or, if possible, improve the situation with the supply of new housing'," he said. Prime Minister Tony Abbott last week ruled out any changes to negative gearing, saying he didn't want his government's tax reform plans to begin with "increasing taxes".    Questioned on Labor's approach to policy in the lead up to the election, Mr Bowen pledged to continue releasing policy in time for voters to understand it, promising Labor would not hold back policy announcements until the final week of the election campaign. Just weeks away from delivering his second budget, Treasurer Joe Hockey took a swipe at Labor's proposal on superannuation but also left open room to adopt it if deemed necessary. "We will have a look at the details, but I am always sceptical about Labor coming up with a plan that increases taxes," he said at a speech in Melbourne. Mr Hockey said the government was looking at superannuation taxation arrangements along with other issues in its tax white paper process, accusing the opposition of "making it up" as it went along. "I don't like higher taxes; I am philosophically opposed to higher taxes," he said. "Because if you increase taxes you're just collecting someone else's money." "I am saying we have a tax white paper; we have a proper process. Quite frankly we said if there are integrity measures they should be looked at." Statistics from the Australian Tax Office show that in 2011-12 almost 2 million Australian taxpayers owned an investment property. But the majority of those were owned by people toward the upper end of the income scale. Defenders of negative gearing have argued that the tax break is needed to assist ordinary people on average weekly earnings service the costs of real estate investment as part of their retirement portfolio.

i'll wait to see the details before deciding if I like it or not

Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election

Quote:

Shadow treasurer Chris Bowen has left open the idea of Labor going to an election with a policy of winding back negative gearing. It might not be popular; almost 2 million Australians invest in property, with the majority of them making net rental losses that they use to reduce their income tax bill, costing the federal budget up to $5 billion a year in revenue. But Labor might be prepared to wind back negative gearing for future investors in property. Mr Bowen was pressed about it last night by Leigh Sales on 7.30. "Negative gearing is on the table as something you're having a look at?" she asked. "What I said last time was that any changes we took to negative gearing would be taken to the next election," Mr Bowen responded. "Our principle would be that people who've invested in good faith with existing rules shouldn't be disadvantaged and anything we do should not take away from new housing stock, which is very important for housing affordability. "And I also I think said to you that I didn't envisage either side of politics abolishing negative gearing in its entirety. "But of course when everything is being examined in a tough fiscal situation, any responsible opposition would be considering a range of measures. But we'll be upfront about anything we do before the next election." Government rules out negative gearing changes Prime Minister Tony Abbott ruled out changes to negative gearing last week, and was backed last night by Social Services Minister Scott Morrison. Mr Morrison was speaking to former Labor minister, now Sky TV presenter, Graham Richardson, who argued negative gearing was a tax break for the wealthy. "That is actually not true," responded Mr Morrison. "Mate, a battler out there in the suburbs on $70 grand with the three kids, how many extra houses do you reckon he owns?" questioned Mr Richardson. "You'd be surprised how many people ... particularly in small business, who don't earn a lot of money, have invested through negative gearing into properties to provide for their own retirement," Mr Morrison replied. "That is a fairly common practice. I know plenty of people ... on meagre incomes. No, not even in a super scheme. They've just done it for their kids, they've done it for themselves, and they've made big sacrifices to do it." Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation. "Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less," he said. "So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families. "This is not a rich person's toy, this is not for the rich and famous. This is for middle Australia saving to get ahead." Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia. He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax. The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors. Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes. "I can't think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing," concluded Mr Eslake.

John Smith wrote on Apr 24^th, 2015 at 1:26pm:

i'll wait to see the details before deciding if I like it or not

Fair enough too.

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties.

Negative gearing has failed in its goal of stimulating the construction of homes.

http://www.businessspectator.com.au/sites/default/files/styles/full_width/public/callam_july9_graph1.png

Bam wrote on Apr 24^th, 2015 at 1:37pm:

I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties

devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock?

if not who's going to upgrade all the old stock?

Bam wrote on Apr 24^th, 2015 at 1:37pm:

John Smith wrote on Apr 24th, 2015 at 1:26pm: i'll wait to see the details before deciding if I like it or not Fair enough too. I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties. Negative gearing has failed in its goal of stimulating the construction of homes. http://www.businessspectator.com.au/sites/default/files/styles/full_width/public/callam_july9_graph1.png

negative gearing  never had  a 'goal' of constructing new homes. Its also a tax strategy available in just about every other country in the world including the US, the UK, all the European countries etc etc. only they do not call it negative gearing. if we called it tax deductible losses which is what it is then there wouldnt be any hoo ha.

Why Joe Hockey has ruled it out

Says it all really

Australia's federal politicians have been outed as the country's most eager property investors, casting doubt on their willingness to rein in negative gearing.

The controversial practice allows taxpayers to use tax losses from rental properties to cut their taxable income. Critics argue it contributes to Australia's house affordability crisis.

    If someone has more than one mortgage of course they're negatively gearing. You'd be an idiot not to

Around one in seven Australian taxpayers own rental properties, but among federal politicians it is at least one in three.

Figures compiled by property authors Lindsay David, Paul Egan and Philip Soos show federal politicians own an average 2.4 properties each, including their family homes.

Collectively they own a portfolio of 541 properties, conservatively estimated to be worth $350 million.

Barry O'Sullivan is Capital Hill's biggest property tycoon, with the Queensland Nationals senator owning 41 properties.

http://images.theage.com.au/2015/03/27/6393813/28neg_gear.jpg

Other big real estate investors include the Nationals' David Gillespie (18 properties), the Palmer United Party's Clive Palmer (12 properties), and the Country Liberal Party's Natasha Griggs (12 properties).

High-profile Communications Minister Malcolm Turnbull owns an impressive portfolio of seven properties, while Labor MP Alannah MacTiernan has five.

But of the 226 members of Parliament, 84 of them hold at least one investment property and at least one mortgage or investment loan, meaning they are possibly negative gearing.

Parliament's register of members' interest does not disclose if its members who hold a loan against their investment properties are negatively geared.

But as one federal politician told Fairfax Media, after admitting he negatively geared a second property: "If someone has more than one mortgage of course they're negatively gearing. You'd be an idiot not to."

Alannah MacTiernan said that her sole investment property (in which she has a 33 per cent interest) is not negatively geared.

Economists like Saul Eslake from Bank of America Merrill Lynch, and John Daley from the Grattan Institute – who recently took on Treasurer Joe Hockey on Q&A – say negative gearing and the capital gains tax discount should be wound back because they are inflating house prices and accelerating falling rates of home ownership among the young.

Read it all here
http://www.smh.com.au/federal-politics/political-news/how-property-investing-politicians-have-skin-in-the-game-on-the-negative-gearing-debate-20150327-1m8s36.html

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock?

If it's implemented properly, renovations of uninhabitable properties would count. I'm just speculating though.

I want to see the right balance struck - not too narrow so only greenfields construction qualified, nor too broad where a coat of paint was enough, wink wink.

As to fixing up houses, builders and renovators would still have an interest in the "renovators' delights" if they can still turn a decent profit on resale.

Why not write to Bowen to express your concerns?

Interesting table

NOTE TOP 20

http://www.macrobusiness.com.au/wp-content/uploads/2014/08/ScreenHunter_3620-Aug.-06-07.53-583x660.jpg

http://www.macrobusiness.com.au/2014/08/aussie-politicians-300m-property-portfolio/

the surprise for me there is Xenophon

Unless these people are a registered business, they have no entitlement to negative gearing against personal income.

Doe s shop owner get to write off his tax against personal earnings?

I did with a theatre production company - but not sure on the rules now.

The bit that is out of whack is the reduced capital gains - that is the big business in this, since it has a proven negative effect on new housing.
Anyone?

Sir Grappler Truth Teller OAM wrote on Apr 24^th, 2015 at 3:51pm:

Doe s shop owner get to write off his tax against personal earnings?

yes, he does

With the possible changes to super and to negative gearing I am finally hopeful that for the first time in 2 decades Labor is probably embracing Labor values.

Sir Grappler Truth Teller OAM wrote on Apr 24^th, 2015 at 3:51pm:

Unless these people are a registered business, they have no entitlement to negative gearing against personal income. Doe s shop owner get to write off his tax against personal earnings? I did with a theatre production company - but not sure on the rules now. The bit that is out of whack is the reduced capital gains - that is the big business in this, since it has a proven negative effect on new housing. Anyone?

If he is a sole trader he most certainly does. If he is incorporated then he can't. You've correctly highlighted the concessional CGT. The negative gearing side is a red herring. Taxes have always been levied on aggregate income.

John Smith wrote on Apr 24^th, 2015 at 1:53pm:

Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock?

The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

Bam wrote on Apr 24^th, 2015 at 1:28pm:

Negative gearing: Labor treasury spokesman Chris Bowen says any changes to be taken to election Quote: Shadow treasurer Chris Bowen has left open the idea of Labor going to an election with a policy of winding back negative gearing. It might not be popular; almost 2 million Australians invest in property, with the majority of them making net rental losses that they use to reduce their income tax bill, costing the federal budget up to $5 billion a year in revenue. But Labor might be prepared to wind back negative gearing for future investors in property. Mr Bowen was pressed about it last night by Leigh Sales on 7.30. "Negative gearing is on the table as something you're having a look at?" she asked. "What I said last time was that any changes we took to negative gearing would be taken to the next election," Mr Bowen responded. "Our principle would be that people who've invested in good faith with existing rules shouldn't be disadvantaged and anything we do should not take away from new housing stock, which is very important for housing affordability. "And I also I think said to you that I didn't envisage either side of politics abolishing negative gearing in its entirety. "But of course when everything is being examined in a tough fiscal situation, any responsible opposition would be considering a range of measures. But we'll be upfront about anything we do before the next election." Government rules out negative gearing changes Prime Minister Tony Abbott ruled out changes to negative gearing last week, and was backed last night by Social Services Minister Scott Morrison. Mr Morrison was speaking to former Labor minister, now Sky TV presenter, Graham Richardson, who argued negative gearing was a tax break for the wealthy. "That is actually not true," responded Mr Morrison. "Mate, a battler out there in the suburbs on $70 grand with the three kids, how many extra houses do you reckon he owns?" questioned Mr Richardson. "You'd be surprised how many people ... particularly in small business, who don't earn a lot of money, have invested through negative gearing into properties to provide for their own retirement," Mr Morrison replied. "That is a fairly common practice. I know plenty of people ... on meagre incomes. No, not even in a super scheme. They've just done it for their kids, they've done it for themselves, and they've made big sacrifices to do it." Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation. "Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less," he said. "So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families. "This is not a rich person's toy, this is not for the rich and famous. This is for middle Australia saving to get ahead." Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia. He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax. The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors. Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes. "I can't think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing," concluded Mr Eslake.

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it.  Labor will fluff around and then decide not to do it.

and PS they gotta get into power first.

longweekend58 wrote on Apr 24^th, 2015 at 5:25pm:

well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it. and PS they gotta get into power first.

You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

Has anyone noticed how the property lobby misrepresents the facts?

Quote:

Ken Morrison from the Property Council of Australia is another who argues that property investors are everyday Australians, and that they help by providing rental accommodation. "Eighty per cent of people who own investment properties that negative gear them [are] actually on salaries of $80,000 or less," he said. "So this is actually something that middle Australia uses to help build their household wealth, build for their future, provide security for their families. "This is not a rich person's toy, this is not for the rich and famous. This is for middle Australia saving to get ahead." Not so, responded Saul Eslake, chief economist with Bank of America Merrill Lynch Australia. He replied that the $80,000 a year that Ken Morrison referred to was their income after they had minimised their tax. The most recent Tax Office statistics put the number earning $80,000 or less at 72 per cent, and an ABC analysis last year showed how those figures massively underestimate the income of real estate investors. Instead, Mr Eslake pointed to figures used by the Reserve Bank that show 60 per cent of the money borrowed for property investment is borrowed by those on the top 20 per cent of incomes. "I can't think of anything that would provide more assistance to the increasing proportion of Australian young people and even middle-aged adults who would like to be homeowners than getting rid of negative gearing," concluded Mr Eslake.

Ken Morrison (Property Counceil of Australia) is misrepresenting the facts here. Many people who have negatively-geared properties have low TAXABLE incomes. Their actual incomes, before tax, are greater; in some cases much greater. Morrison is confusing after-tax incomes with salaries.

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24th, 2015 at 5:25pm: well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it. and PS they gotta get into power first. You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

Nor will the majority of Australians be effected by Labor's new Super policy.

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

What's this before negative gearing bit. Leveraged investments have been allowed for yonks. It just wasn't called negative gearing until the mid eighties.

Ex Dame Pansi wrote on Apr 24^th, 2015 at 5:19pm:

John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again.

but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough :D :D :D

Bam wrote on Apr 24^th, 2015 at 6:29pm:

longweekend58 wrote on Apr 24th, 2015 at 5:25pm: well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it. and PS they gotta get into power first. You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties.

1.8 million people is a good number of people to oppose it, especially when most of them are in the major centres . A lot of people that live outside the CBD's don't really give a fig either way.

John Smith wrote on Apr 24^th, 2015 at 9:07pm:

Bam wrote on Apr 24th, 2015 at 6:29pm: longweekend58 wrote on Apr 24th, 2015 at 5:25pm: well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it. and PS they gotta get into power first. You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties. 1.8 million people is a good number of people to oppose it, especially when most of them are in the major centres . A lot of people that live outside the CBD's don't really give a fig either way.

Just so we're on the same page ... Bowen isn't actually proposing to remove negative gearing for properties that are currently held, nor I suspect for newly-constructed properties. Only purchases of existing properties that are made after a particular date (which would not be earlier than the 2017 budget) would be affected.

What really needs looking at though is the concessional rate of capital gains. This is causing more harm.

Where’s Armchair asking why if this is such good policy, why didn’t Labor do it when they were in power?

Pathetic, leftards, just pathetic.

RUNVS wrote on Apr 24^th, 2015 at 6:38pm:

Bam wrote on Apr 24th, 2015 at 6:29pm: longweekend58 wrote on Apr 24th, 2015 at 5:25pm: well that's the end of that then. The days of taking a unpopular policy to an election are long gone. Howard was the last to try and nearly lost it. Labor will fluff around and then decide not to do it. and PS they gotta get into power first. You're assuming that the policy would actually be unpopular. More likely, for every person bemoaning the abolition of this tax concession, there's probably about five saying "about time!". The vast majority of Australians (~95%) do not own negatively-geared investment properties. Nor will the majority of Australians be effected by Labor's new Super policy.

Exactly correct - nobody on an income less than $250k pa, or with a super income under $75k pa will be affected.

I really don't see what all the fuss is about.  Anyone who has an income of a quarter of a million a year  and cannot put enough away without tax subsidy for retirement is not worth their salary.

Anyone who had enough to salt away enough to earn over $75k in super payout had enough to not need subsidy.  It was only supposed to be aimed at those who would eventually draw a pension - which all those persons would not.

It was a gutless and self-serving policy the way it was pushed through and left the gate open to those who had no need for and never would draw a pension to exploit it for huge amounts of tax-free money.

The subsidy should always have applied to only those with sufficient income to deposit enough to create enough to not have to draw a Pension on retirement - not those with masses to put away.

For example - to garner $1m in super without paying any tax on annual payment, over 25 years of the operation of this scheme, and allowing a return of 10% - a person would have to put away a minimum of around $400k a year.   anyone with that kind of residual discretionary income would never draw a pension and most certainly could engineer a comfortable retirement without this subsidy from the public purse.

It thus appears to me quite clearly that, rather than being a scheme to reduce the burden of pensions - this became just another way of allowing the rich cronies a handful of cash from the public coffers - and legitimising it.  Certainly they got far more than those who would need a pension without the scheme.

Marcos would have been proud of this one....

One property as a private single operator of business - OK.

More than one - incorporation as a company with all the burdens associated with it, including no ability to offset against personal income.

Again it is the capital gains that is absurd on the face of it.  Why should someone cop all tax deductions along the way and then another when they sell for a profit?  Income is income and profit derived after sale after tax concessions is income full and simple.

John Smith wrote on Apr 24^th, 2015 at 1:26pm:

i'll wait to see the details before deciding if I like it or not

Sure you will, John.  ;D ;D ;D

Armchair_Politician wrote on Apr 25^th, 2015 at 7:06am:

John Smith wrote on Apr 24th, 2015 at 1:26pm: i'll wait to see the details before deciding if I like it or not Sure you will, John.  ;D ;D ;D

oh look, the village idiot is back ......

John Smith wrote on Apr 24^th, 2015 at 9:04pm:

Ex Dame Pansi wrote on Apr 24th, 2015 at 5:19pm: John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again. but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough :D :D :D

Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them.

Ex Dame Pansi wrote on Apr 25^th, 2015 at 8:09am:

John Smith wrote on Apr 24th, 2015 at 9:04pm: Ex Dame Pansi wrote on Apr 24th, 2015 at 5:19pm: John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again. but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough :D :D :D Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them.

who do you think is going to sell them?

Sir Grappler Truth Teller OAM wrote on Apr 25^th, 2015 at 12:52am:

One property as a private single operator of business - OK. More than one - incorporation as a company with all the burdens associated with it, including no ability to offset against personal income. Again it is the capital gains that is absurd on the face of it.  Why should someone cop all tax deductions along the way and then another when they sell for a profit?  Income is income and profit derived after sale after tax concessions is income full and simple.

Exactly! The worst part of the CGT concessions is that money earned by doing little more than signing a few documents is taxed at only half the rate of an equivalent sum of money earned through hard work. It is grossly unfair and has to be abolished.

Sir Grappler Truth Teller OAM wrote on Apr 25^th, 2015 at 12:52am:

incorporation as a company with all the burdens associated with it, including no ability to offset against personal income.

why not? you can offset losses against personal income with any other business. Everyone is hung up because in property we have a 'term' for it whereas with anything else there is no 'recognised term, it's just standard business practice.

The bigger problem I think is the the concessions on capital gains tax. That encourages investors to overpay.

John Smith wrote on Apr 25^th, 2015 at 8:11am:

Ex Dame Pansi wrote on Apr 25th, 2015 at 8:09am: John Smith wrote on Apr 24th, 2015 at 9:04pm: Ex Dame Pansi wrote on Apr 24th, 2015 at 5:19pm: John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again. but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough :D :D :D Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them. who do you think is going to sell them?

The people who see an opportunity to make a profit or who are forced to - same as now.

Abolition of all the tax havens will create short term pain for some, that is inevitable, but the blame for that lies squarely at the feet of governments rampant who developed these policy ideas based on the self-serving lobbying of those who can afford to lobby etc.  Same as super changes needed right now, the small fish, caught in the net as by-product, will be considered as nothing more than the cost of doing business by the big fish, who will suffer far less in real terms.

That's why changes should be retrospective, a form of RICO law... like super, this approach obviously benefited those who would benefit most - the Crony Network at play.

Sir Grappler Truth Teller OAM wrote on Apr 25^th, 2015 at 11:43am:

John Smith wrote on Apr 25th, 2015 at 8:11am: Ex Dame Pansi wrote on Apr 25th, 2015 at 8:09am: John Smith wrote on Apr 24th, 2015 at 9:04pm: Ex Dame Pansi wrote on Apr 24th, 2015 at 5:19pm: John Smith wrote on Apr 24th, 2015 at 1:53pm: Bam wrote on Apr 24th, 2015 at 1:37pm: I like how he's proposing to grandfather existing NG arrangements and may be signalling that it may be retained for the construction of new properties devils in the details there to ... if I buy an old house and do a complete reno, does that count as new stock? if not who's going to upgrade all the old stock? The same people that did it before negative gearing....the owner/buyer. Remember when people used to buy an old run down house and after a few years when they got on their feet they'd slowly renovate, we could go there again. but nail doesn't want first home buyers to buy old asbestos riddled dumps, only premium properties are good enough :D :D :D Not at the current price, but if/when NG is abolished, I'm sure lots of first home buyers will pick them up because investors certainly won't want them. who do you think is going to sell them? The people who see an opportunity to make a profit or who are forced to - same as now. Abolition of all the tax havens will create short term pain for some, that is inevitable, but the blame for that lies squarely at the feet of governments rampant who developed these policy ideas based on the self-serving lobbying of those who can afford to lobby etc. That's why changes should be retrospective, a form of RICO law... like super, this approach obviously benefited those who would benefit most - the Crony Network at play.

Without tax rorts and tax havens where would the governments mates hide all their money ?

This is just unreasonable.

Slumlord, better keep to sucking Pecker's pecker. Basic accounting just aint your thing.

Happy Lucky wrote on Apr 25^th, 2015 at 2:01pm:

Slumlord, better keep to sucking Pecker's pecker. Basic accounting just aint your thing.

True. For that, we need Longy.

Bam wrote on Apr 25^th, 2015 at 8:14am:

Sir Grappler Truth Teller OAM wrote on Apr 25th, 2015 at 12:52am: One property as a private single operator of business - OK. More than one - incorporation as a company with all the burdens associated with it, including no ability to offset against personal income. Again it is the capital gains that is absurd on the face of it.  Why should someone cop all tax deductions along the way and then another when they sell for a profit?  Income is income and profit derived after sale after tax concessions is income full and simple. Exactly! The worst part of the CGT concessions is that money earned by doing little more than signing a few documents is taxed at only half the rate of an equivalent sum of money earned through hard work. It is grossly unfair and has to be abolished.

have you ever worked for a living in your life? Seriously? You think people make money by "signing docuements" ? Some of you people are in fairy land.

Happy Lucky wrote on Apr 25^th, 2015 at 2:01pm:

Slumlord, better keep to sucking Pecker's pecker. Basic accounting just aint your thing.

you are obsessed with peckers pecker aren't you?  Is it just because you don't satisfy even yourself with yours?

rhino wrote on Apr 25^th, 2015 at 3:07pm:

Bam wrote on Apr 25th, 2015 at 8:14am: Sir Grappler Truth Teller OAM wrote on Apr 25th, 2015 at 12:52am: One property as a private single operator of business - OK. More than one - incorporation as a company with all the burdens associated with it, including no ability to offset against personal income. Again it is the capital gains that is absurd on the face of it.  Why should someone cop all tax deductions along the way and then another when they sell for a profit?  Income is income and profit derived after sale after tax concessions is income full and simple. Exactly! The worst part of the CGT concessions is that money earned by doing little more than signing a few documents is taxed at only half the rate of an equivalent sum of money earned through hard work. It is grossly unfair and has to be abolished. have you ever worked for a living in your life? Seriously? You think people make money by "signing docuements" ? Some of you people are in fairy land.

If you had ever bought and sold real estate, you would know that making profit from real estate is little more than paperwork at purchase, do nothing for a few years while it appreciates in value, then more paperwork on sale. No hard work involved at all.

Getting the deposit may require hard work and savings, but this is not essential. More paperwork can do this by borrowing the deposit against the value of existing assets.

Do you really think those people who own 100 investment properties did this by working and saving for every one of them?  ;D

Bam wrote on Apr 25^th, 2015 at 4:21pm:

do nothing for a few years while it appreciates in value, then more paperwork on sale. No hard work involved at all.

do you realise that most people work hard to keep up the repayments and maintain the property? You think that's nothing?

John Smith wrote on Apr 25^th, 2015 at 10:02pm:

Bam wrote on Apr 25th, 2015 at 4:21pm: do nothing for a few years while it appreciates in value, then more paperwork on sale. No hard work involved at all. do you realise that most people work hard to keep up the repayments and maintain the property? You think that's nothing?

If the property is rented out - most are - the rent provides the bulk of the funds for the repayments and maintenance. In any case, I am referring to the purchase and sale of the property, an act that of itself doesn't entail any great amount of hard work.

Maintenance and repayments are largely irrelevant to capital gains tax concessions. That's why the assertion that people work is specious. The funds for the hard work could be put to other uses as well - but most of those other uses are not as generous for taxation purposes. You are both also assuming that everyone with an investment property has a job. That assertion is false.

What you really need to look at is the unfair taxation arrangement that allows capital gains to be taxed at half the marginal rate. It is unfair because all deductions against the property are claimed at their full value, including any investment losses.

This taxation treatment is contributing to the overheating of the property market, more so than negative gearing.

Bam wrote on Apr 25^th, 2015 at 11:23pm:

I am referring to the purchase and sale of the property, an act that of itself doesn't entail any great amount of hard work.

it involves more than what's involved in buying and selling most things, and yet we have thousands occupied in this country selling things. Go figure.

John Smith wrote on Apr 25^th, 2015 at 10:02pm:

Bam wrote on Apr 25th, 2015 at 4:21pm: do nothing for a few years while it appreciates in value, then more paperwork on sale. No hard work involved at all. do you realise that most people work hard to keep up the repayments and maintain the property? You think that's nothing?

They had to know that before they went into it - however - that is not 'work' as such, and does not mean they should get preferential treatment.

Do you think that anyone taking on a job does not accept the downside of working for it?

Nope - sorry - I see no case for special treatment, and this sense of entitlement for doing some alleged hard yards is long overdue for the scrap heap.  EVERYONE does it hard -  but only a few get preferential treatment.

They are not doing it for love of anyone else - ergo - tough titties.

You no like - you no buy.

Wouldn't be the least bit surprised that when and if the time ever comes Bowen will "dog it" on this and nothing will happen or very little will except perhaps some cosmetic fringe work. ::)

Grendel wrote on Apr 28^th, 2015 at 11:16am:

Wouldn't be the least bit surprised that when and if the time ever comes Bowen will "dog it" on this and nothing will happen or very little will except perhaps some cosmetic fringe work. ::)

If it happens, it wouldn't be the first time a political party hasn't followed through on a commitment.

Sir Grappler Truth Teller OAM wrote on Apr 25^th, 2015 at 11:37pm:

They had to know that before they went into it - however - that is not 'work' as such, and does not mean they should get preferential treatment.

what preferential treatment?

you buy a business, any business and have somone manage it while you keep working, you can claim losses on the business against your wage. There is nothing new or unique about negative gearing.

Why do you think all the 'millionaires' in Sydney all bought Alpaca farms or small vineyards in the 90's?