We’ve hashed over this subject many times now and I am sure it won’t be abolished any time soon, but the mutterings are there. One day I think they will try this again and it could really knock your portfolio around:
http://www.theaustralian.news.com.au/common/story_page/0,5744,10971344%255E601,00.html
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Fine…bring it on!!! Then sit back, and watch, as history repeats itself and……
RENTS WILL SKY ROCKET!!!!
Exactly Monopoly,
There would be some sort of time delay that might test your serviceability but like last time they tried it rents did skyrocket.
I’d love to convert my NG portfolio to even a neutrally geared one and buy more that’s for sure!
I daresay the politicians wouldn’t be so stupid as to try this tactic, but then again, they are reknowned for their stupidity, and as such, I wouldn’t totally dismiss it’s likelihood. However, if they DO take this onboard, it will (as before) be a temporary thing, and the key is hold tight, and weather the storm as best as one can.
IMO if this rumour hits the even faintest of heart type investors, it could create havoc (panic selling) and that in itself will have a huge impact on the current market climate.
Personally, I will be prepared for the fire sales, checkbook firmly in hand!!!
Jo
I wouldn’t be suprised to see changes to NG. While I don’t believe they will remove it completely, I can see them ring fencing NG on an asset so you can claim the tax credits back only when the asset begins to show a profit. This could be once the asset become PG or on a CG trigger.
This, in my mind, is a fairer system that would stop too much NG abuse yet still encourage investors to invest.
You s*#t stirrer Aus,
Trust you to raise this topic.But I’m with Baloo on this one.
Its not inconceivable…no reason why they can’t rule that you quarantine the loss within the property till it shows a profit.
Then you don’t pay tax on the profit till the loss is used up.
ie.. you don’t lose the ability to claim the loss, just defer it till the property shows a positive cashflow.This is what happens in business,,carry forward a loss into the future to offset against future profits.
There was a time where as a PAYG taxpayer running a business as a sideline you could offset the loss the business generated against your PAYG income, but the tax office abolished that one.
Lots of “loss making” small businesses closed down.
Negative gearing was abolished in the USA not too many years ago, I’m not sure what effect it had on the rental market though…I understand you can still claim the interest paid on your PPOR mortgage in the States as a tax deduction, so as least they have that…
I reckon Marky Mark Latham would consider it….Johnny John will leave things as they are.
As Jo said…Bring it on…I think its not a bad thing to happen…
KP
If you don’t believe Monopoly,just ask Paul Keating. He stuffed up by being the one to knock neg.gearing on the head.Didn’t last long before his about face.
bruham.[wacko] [withstupid]
Originally posted by Baloo:I wouldn’t be suprised to see changes to NG. While I don’t believe they will remove it completely, I can see them ring fencing NG on an asset so you can claim the tax credits back only when the asset begins to show a profit. This could be once the asset become PG or on a CG trigger.
This, in my mind, is a fairer system that would stop too much NG abuse yet still encourage investors to invest.
Agree,
This idea makes sense and would bring our rules more in line with the rest of the western world.
It would also bring property investors more into line with the rest of the business community in Oz.
They are very slowly tightning the rules in regards to Negative Gearing. And looking how the US have done it they basically will only allow a certain amount you are able to offset on other income. When they need higher taxes to pay for the baby boomers I’m sure they will be doing a similar thing.
Rgds.
Lucifer_auThe winds of change are blowing….take heed !!
Who hinted at it being abolished in the first place ? Was it a politician??
If it was then you can bet that it was a precurser ( test the reaction) before attempting to bring it in…or stamp it out, whichever way you see it.
KP
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