Hi,
I am doing some thinking about what the environment would be like in Australia is Negative Gearing was removed.
.
My specific question is, would this be applied at a portfolio or individual property level?
If it is applied at the portfolio level and you a positively geared, then I expect your tax calculation would not change even if you had some loss making properties in your mix. There may be knock-ons from wider economic effects however.
If it is applied at the property level then your your tax calculation would be directly effected in the above scenario.
So, when this possibility is discussed is it envisioned it would occur at the portfolio or individual property level?
Thanks,
Negative Gearing was removed/reduced when Paul keating was PM- Back in 1998? sorry not 100% sure about the date…def before my time
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It was removed by Keating in 1984.
Keating thought it was a benefit for the rich. The end result was that the property investment market collapsed rents went through the roof and the government were forced to bring back negative gearing. However to save face the worlds greatest treasure introduced capital gains tax.
It is interesting to note that any investment properties purchased before 1984 for investment remain Capital gains tax except
I think that it is highly unlikely that any government even one as Dumb as Gillard would be silly enough to remove negative gearing again.
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Could result in a number of investors finding themselves with property they can no longer afford to hold, especially if their employment situation were to change too?
Has been discussed plenty of times previously – unlikely to happen (again).
Yep it has been raised each time the government has changed and Gillard herself said that it is extremely unlikely that her government was going to abolish it. It only took a couple of years for Hawke and Keating to bring it back.
Regards
Shahin
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As was seen with Keating when he tried abolishing it the first time around, the market would collapse, prices would fall dramatically as supply outweighs demand which means plenty of family homes are worth way less than what they were bought for.
Would be political suicide for any government to introduce.
Cheers
Tom
Thanks.
If it were to be removed, would the effects happen at a portfolio or individual level? What happened last time?
Rents increased by 30% over night as landlords had to make up the net cash shortfall from elsewhere.
If of course your properties are positively geared then really not going to make much difference to you but certainly make a difference to the tenants pocket.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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