Public service looking at negative gearing tax policy, PM suggests

So what? You clearly don’t know how this scam works or how it has created the property bubble. By letting people deduct rental losses from wages, not just rental income, you let people rich enough to afford mulitple homes reduce their tax potentially to zero. Stir in Howard’s other gift to the rich, the CGT discount, they only pay half what they would otherwise owe when they sell the property. This is exactly how the rich get richer, because the more you earn, the less tax you pay.

Lmao

What happens when the only people who can deduct investment property losses

Are the ones that hold other properties that are turning a profit?

Didn’t think this one through at all, did you

This scam you talk of, isn’t quite the scam you claim.
First of all, if a landlord losses money and claims that loss on their tax, they simply reduce the level of tax they would pay, based on their marginal tax rate. Eg someone on the 30% tax bracket who loses $10,000, reduces their tax by $3,000. The other $7,000 is an actual loss. Rinse and repeat for 10 years and the landlord has a real out of pocket loss of $70,000.
If the landlord sells the property and makes a capital profit, after allowing for agents, legals etc, they are subject to CGT. CGT is levied at the the landlord’s marginal tax rate, but discounted by 50%.
The thing to remember here is that because the capital gain is brought into the one financial year, it’s possible and probably likely that the landlord will be pushed into a higher tax bracket, albeit discounted by 50%.
Our hypothetical landlord, having lost $70,000 in real money through NG, must recover this from their after-tax capital gain, otherwise they have have still lost money.

Over time, you would expect that NG losses would reduce through a reduction in debt levels (and associated interest charges) and through increased rents.

In a lot of ways , NG is no different to any business writing off it’s costs against its income.

NG is perfectly fine. If there is a problem, maybe it’s that the Costello CGT discount is too generous. With the Keating model, tax was charged at the marginal rate, but the capital value adjusted for CPIafter allowancmade for CPI

Yes, I’d call running a ‘business’ at a ‘loss’ — taxpayer expense — a scam. It’s another example of publicising losses and privatising profits. Negative gearing isn’t used by people paying 30% tax, it’s used by people being paid a lot more than that for the purpose of reducing their tax. Your $7000 loss might bring you down a tax bracket and save you more than that in tax, plus you have an appreciating asset that you only pay half the tax on when you sell.

Some all product lines or services that a business may offer, are always profitable. A businesses administration or its HR departments don’t make a profit either. But all of these things are tax deductible and not scams.
I’m the case of a property investor, it’s really no different. Total income, less expenses incurred earning that income = taxable income.

I used the 30% tax rate as an example, simply because the maths was easy.
30% still covers income up to $120,000.

Sure, people investor in property with the intent of creating wealth. People buy shares and salary sacrifice into Super for the same reasons.
Whether it’s property, shares or super, those with higher incomes have always been better off. Not just because of the tax scales, but also because of their higher disposable incomes.
Personally, I wasn’t a fan of ScoMo’s Stage 3 tax reductions and to be frank, I think Albo should have scrapped it altogether, or applied it entirely at the lower end.
I have never been a higher income earner, but lived very frugally. I have never owned an investment property either.

Really? Dutton is the biggest negative gearer is he? What report did you get that from?

Funny how people blame investors for inflating the market

Yet whenever you go to an auction it’s the owner-occupiers who “fall in love” with the place and bid up the price (including by bidding against themselves lol)

Probably in the Guardian.

The Greens will support abolition of negative gearing but only if existing arrangements are grandfathered.

I’m sure they will appreciate your advocacy 🙂

It is also interesting watching chickens after the sky doesn’t fall.

My hot tip is the whingeing renters will start blaming immigrants but happy to run a pool

Probably a fair trade off, because at least it will stop the whinging property investors complaining every time the value of this concession is questioned.

It always speaks volumes when someone refers to the deductibility of expenses against earned income as a “concession”

Suppose it makes it easier to identify the leaners

Expenses deducted against completely separate income. Yeah, I’ll stick with calling it a concession

Always good to see the property spiv logic on display in their constant whinges when anyone questions their rent seeking.

“Everyone that earns less than me is a dole bludger.

Everyone that earns more than me is a tax dodger!”

-Low-income transfer payment recipients

Lmao

People who own investment properties are now “property spivs”

The politics of envy have risen to dizzying new heights

LOL,
How oblivious are the property spivs to write such stupidly ironic statements.

Everyone that argues against the negative economic effects of various tax concessions and incentives on property investment are:

“Leaners”
“Low income transfer recipients”
“Poor”
“Envious”

Etc. Etc.

You can’t make this stuff up.

And no, I don’t think everyone that owns an investment property is a Rent Seeking Spiv, just some of you.

Lol

Milk the government purse for Newstart, Jobseeker, child care subsidy, or “disability services” including sex workers, and everyone is fine with it

Subsidise a tenant’s rent with your PAYG income, and EVERYONE LOSES THEIR MIND

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