Australian Politics Forum - Renters Freeze In Winter, Melt In Summer

Jovial Monk Gold Member Offline Dogs not cats! Posts: 51474 Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #30 - Sep 15^th, 2023 at 10:57am Yes.
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freediver Gold Member Offline www.ozpolitic.com Posts: 53355 At my desk.	Re: Renters Freeze In Winter, Melt In Summer Reply #31 - Sep 15^th, 2023 at 11:38am If you make a loss on your rental property, you cannot use it to offset your income.
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Jovial Monk Gold Member Offline Dogs not cats! Posts: 51474 Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #32 - Sep 15^th, 2023 at 11:57am Says who?
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freediver Gold Member Offline www.ozpolitic.com Posts: 53355 At my desk.	Re: Renters Freeze In Winter, Melt In Summer Reply #33 - Sep 15^th, 2023 at 12:57pm My mistake. It looks like you can. But reducing your income tax by losing money on an investment is hardly a cunning plan.
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Jovial Monk

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Re: Renters Freeze In Winter, Melt In Summer
Reply #34 - Sep 15^th, 2023 at 2:36pm

You are turning heavily taxed income into very lightly taxed capital.

Not hard to show a loss—credit fonciers load all the interest in the front of the loan so your loan payments are pure interest pretty much. 8 years later the value of the hoarded property has gone up so you sell it and you pay CGT on a fraction of the gain.

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Lisa Jones Gold Member Offline Australian Politics Posts: 39047 Sydney Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #35 - Sep 15^th, 2023 at 3:03pm freediver wrote on Sep 15^th, 2023 at 12:57pm: But reducing your income tax by losing money on an investment is hardly a cunning plan. Exactly! AND you pay CGT IF/WHEN you sell your property too.
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freediver

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Re: Renters Freeze In Winter, Melt In Summer
Reply #36 - Sep 15^th, 2023 at 3:16pm

Jovial Monk wrote on Sep 15^th, 2023 at 2:36pm:

You are turning heavily taxed income into very lightly taxed capital.

Not hard to show a loss—credit fonciers load all the interest in the front of the loan so your loan payments are pure interest pretty much. 8 years later the value of the hoarded property has gone up so you sell it and you pay CGT on a fraction of the gain.

So this cunning plan is to reduce your tax bill by taking out a huge loan and making a loss every year, while only paying off the interest?

What happens if interest rates double and house prices stagnate for a while?

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Jovial Monk Gold Member Offline Dogs not cats! Posts: 51474 Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #37 - Sep 15^th, 2023 at 3:46pm You want tax discounts AND a cast iron guarantee FD? I do not think investing is the right strategy for you.
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freediver Gold Member Offline www.ozpolitic.com Posts: 53355 At my desk.	Re: Renters Freeze In Winter, Melt In Summer Reply #38 - Sep 15^th, 2023 at 6:03pm I don't think losing money every year in order to reduce your tax bill is a good idea. What percentage of the property market do you think is owned under this sort of arrangement? My philosophy has always been to prioritise making money. Minimising your tax bill comes a distant second.
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John Smith Gold Member Offline Australian Politics Posts: 78311 Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #39 - Sep 15^th, 2023 at 6:06pm freediver wrote on Sep 15^th, 2023 at 12:57pm: My mistake. It looks like you can. But reducing your income tax by losing money on an investment is hardly a cunning plan. You lose on income but it is more then offset by capital gains
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freediver Gold Member Offline www.ozpolitic.com Posts: 53355 At my desk.	Re: Renters Freeze In Winter, Melt In Summer Reply #40 - Sep 15^th, 2023 at 6:10pm Quote: You lose on income but it is more then offset by capital gains I am sure that is what the salesman told you. But what is the reality?
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John Smith Gold Member Offline Australian Politics Posts: 78311 Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #41 - Sep 15^th, 2023 at 9:19pm freediver wrote on Sep 15^th, 2023 at 6:10pm: Quote: You lose on income but it is more then offset by capital gains I am sure that is what the salesman told you. But what is the reality? I already told you. You can listen, or you can keep crying, either way I don't care.
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Lisa Jones Gold Member Offline Australian Politics Posts: 39047 Sydney Gender:	Re: Renters Freeze In Winter, Melt In Summer Reply #42 - Sep 15^th, 2023 at 9:45pm freediver wrote on Sep 15^th, 2023 at 6:10pm: Quote: You lose on income but it is more then offset by capital gains I am sure that is what the salesman told you. But what is the reality? What’s the reality? Definitely NOT what Five Foot Frodo the Dumbarse Dodo has googled. 😂🤣😆
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freediver

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Re: Renters Freeze In Winter, Melt In Summer
Reply #43 - Sep 15^th, 2023 at 10:20pm

John Smith wrote on Sep 15^th, 2023 at 9:19pm:

freediver wrote on Sep 15^th, 2023 at 6:10pm:

Quote:

You lose on income but it is more then offset by capital gains

I am sure that is what the salesman told you. But what is the reality?

I already told you. You can listen, or you can keep crying, either way I don't care.

If an investment broker came to you and said hey, here's a great investment: you front up a huge sum of cash, the investment loses money every year so you have to front up even more cash, which is great because you pay less tax on account of making such poor investments, but at the end of it you may or may not get some capital gain, which may or may not be above inflation, and here is where it gets really good, you get a capital gains tax discount, so all that money you have lost doesn't matter any more, because the tax department is the real loser.

Would you give him all your money?

What percentage of the property market do you think is owned on this basis?

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Jovial Monk

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Re: Renters Freeze In Winter, Melt In Summer
Reply #44 - Sep 16^th, 2023 at 7:31am

You borrow what you need to buy the property.

The payments in the first years of that loan are mostly interest and tax deductible.

Real estate rises, you sell the property after, I think, 8 years make a big gain only a small part of which is taxed.

If you are a high income earner reducing tax is indeed very desirable.

I think just buying and hoarding a property or properties for a while is not something the tax system should encourage to the detriment of home owners. Buying land and building a house or units or flats on it, increasing the housing stock, is what should be encouraged.

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