This has just popped up in the news today about possibly scrapping negtive gearing to curb investments, thus reducing the huge amounts of debts that us Aussies are carrying.
Bid to cut property perks
From: By Steven Wardill
October 14, 2005TAX breaks for property investors should be diluted to slow investment in the housing market, according to a new Senate report.
In a 157-page report, the Senate’s Economics Committee found Australia’s favourable tax regime was causing excessive and speculative investment in housing.
The bi-partisan committee also recommended tighter controls on bank lending practices and laws forcing estate agents to warn buyers of the perils in housing investment.The committee investigated links between Australia’s current account deficit, the demand for imported goods and household debt.
It found that Australia, along with many other countries, had undergone a “significant cultural change” in people’s attitude to debt.
“Twenty years ago Australian households averaged about $50 in debt for every $100 of income,” the report said. “That figure has now risen to about $150 in debt for every $100 of income.”
The committee urged the Federal Government to revisit a recommendation from the Productivity Committee for a review of personal tax breaks driving property investment.
These include fringe benefits and capital gains tax breaks which earn investors about $4 billion a year.“Reviewing the capital gains tax provisions offers one of the few realistic alternatives available for moderating the excessive demand for investment housing, a significant distortion in the housing market.”
Both sides of politics have repeatedly rejected calls to slash negative gearing when 16 per cent of taxpayers own an investment property.
Property Council of Australia state executive director Robert Walker said reducing negative gearing benefits would have severe detrimental effects on the housing market because of its high investor numbers.
Mr Walker said previous attempts to cut negative gearing had only served to drive up rents.
“They tried to tinker with negative gearing in the ’80s and it took years to recover,” he said.
Appropriate checks on a consumer’s capacity to pay before a new credit card or new credit limit was issued by a bank was also recommended. And interest rates, key fees and terms and conditions of credit cards should be included on all bank promotional material.
As it says in the article, 16% of taxpayers own an investment property so surely something like this wouldn’t fly in the electorate?
Even though this is a cashflow positive themed forum if it was to go ahead, how would it affect your investing?
As Jan Sommers said, she went thru the anti -ve gearing thing in the 80s and she is still infront!
Depending on my servicability – I would still keep on going, although it would be much slower!Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonI’m hoping and praying that some legislation would abbolish negative gearing benefits.
It would be the best thing on the planet for investors that invest for cashflow! [biggrin]
They have been promising, I mean threatening, this would happen for a long time, when are they finally going to to it?
We buy properties in Adelaide. Immediate Cash Settlements, No Agent Fees.
[email protected]
phone 0412 437 582Probably they’re not…..
Too many ‘vested interests’ will get hurt, including themselves most likely.
Same deal with the famiy trusts.
Same threat every year, but no changes forcoming.kp
Abolish Neg Gearing for ALL Investments..that’d be hard to pass IMO..Or are they just suggesting Property and we use our equity to Margin Loan up to our eyeballs in shares??
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorDon’t see it happening either, it means too much to the property market and Australian economy..
Roy H.
L.R.E.A., Dip FS (FP)Guardian Property Specialists (GPS) is a research-focused company that specialises in sourcing and providing residential investment properties Australia wide!
Paul Keating did it and we all know what happened dont we?
The stats are saying that renters will keep increasing so it would be DUMB for the government to do it again, but hey they r only polititions arn’t they?
resiwealth
it would be DUMB for the government to do it again
Funny, resiwealth, remember, the govt are experts in making dumb decisions.
Personally, if the neg gearing would get slashed, it might slow us down in acquiring the next property, but it certainly wouldn’t hold me back from doing so.
I just love real estate and even without neg. gearing I would find property a good and stable investment.Celivia
Dear All,
1. My ability to invest in Australia would be slowed down if the negative gearing tax benefits is removed.
2. Will this happen in the near future? Quite unlikely, I think;- in view of what has happened in the past.
3. Furthermore, I do not think that the Australian Govt wants to singly shoulder the responsibility of providing subsidised housing for its poor people, by itself. It wants the Australian people to help out and for this reasons alone, I think the Australian Govt is unlikely to remove the negative gearing tax benefits in the near future.
4. For your kind update, please.
5. Thank you.
regards,
Kenneth KOHOriginally posted by kenkoh2000:3. Furthermore, I do not think that the Australian Govt wants to singly shoulder the responsibility of providing subsidised housing for its poor people, by itself. It wants the Australian people to help out and for this reasons alone, I think the Australian Govt is unlikely to remove the negative gearing tax benefits in the near future.
Couldn’t have said it better myself !
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneI also doubt it would happen. I agree completely with KenKoh2000’s 3rd point about the gov footing the bill for housing the poor.
If it did eventuate, sure it would slow me down, but it wouldn’t put me off.
How about this: If it did happen, then a lot of people would sell their neg properties. If you could weather the storm, afterwards, wouldn’t there be more better deals around for the fewer investors to purchase?
Cabo Wabo
Yes G7 it would affect us in a bad way.
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