So someone who help out only one renter is somehow better from someone who helps out two renters or more ? Where did you get that idea from? Does someone who feeds at their own cost a neighbour somehow OK and better than someone who feeds at their cost two neighbours ? That seems to be your argument.
@@ManCatCheese You have not thought that out very well. You have been too simplistic in your thoughts. Things do not just exist without investment. The reality is all houses either new or not have to be built and maintained over their life. The fact that someone builds them from new is immaterial because it is all investment in property which someone must build and maintain. All newly built houses become those built last year or earlier and purchasing is only one part of creating accommodation for an owner or occupier just as putting an investment into a business creating building products provides new building products that would not otherwise have been created and available for people to buy or rent.
@@Rob-fx2dw There's nothing that needs to be "thought out". When you have first home buyers competing with investors the price of homes goes up. That's simply supply and demand. Investors have a competitive advantage against first home buyers as they can leverage their equity in other properties. If an investor wins the bid to buy a home, then all that is created is one more renter. If the first home owner won the bid, there would be one less renter, and a family that now has secure housing without the control of a landlord. The problem is that you are viewing housing purely as a commodity, as a wealth builder, when it should be something everyone can access. Property investing into existing assets is not a productive industry. You aren't making anything, simply withholding the ability for someone else to own their own home, and charging rent for the privilege. If you are building houses and then selling them to first home buyers, you are adding value to society and that is a good thing, even if it is a build to rent.
@@matthewrobinson8886stop it now and people who have been doing it for the last 10 years should pay the tax they should have paid in the first place even if it means they must sell one of their properties to be able to pay their tax debts! The $ the govt gets back can be used to build more public housing homes & affordable homes
Good explanation of negative gearing. In the interest of fairness, Dutton has 6 investment properties. As if Project viewers need to have their prejudices against Labor re-enforced.
@@hjf3022 Most people here agree with you but that doesn't change the fact the party in power are responsible for their action or inaction. If they fail to fix the system when they have the power to, it's on them, not the LNP.
@@joshwells3247 Those hands, all of them have never done a day's work in their lives. Just the guffawing over the Menindi lakes fish kill. Their Job is to look for laughs, nothing else.
@@Itsokay.nottobeokaaaay Not jealousy friend, it's a policy that makes a fundamental right, one open to speculation. Worse still, you have an incentive for loss in your business model, one in which those squeezed on the bottom rung do your lifting. If it's such a fair system, then you don't need subsidies.
Interesting how you target your criticism towards those (allegedly) operating within a law that you don’t support rather than criticise the government for actually having the law in place.
Because every time Labor or the Greens try to push reform these gits will immediately say "but mum and pa investors" and its really annoying that after years of screaming about how reform will destroy australia they go "oh but what is it" @@damian76111
As your rents increase with time and your equity increases, the gap between negative gearing and positive gearing decreases and usually after around 10 years you begin to have to pay tax. Then if you sell your positively geared property you have to pay tax on the deamed value. You cannot use the scenario of the beginning of negative gearing and not take into account that firstly you are reducing your income to live, ie, having a lower standard of living by forgoing a large proportion of your wages to pay the interest on your loan. I have been saying for years, while you are young and living at home, if you save a deposit and buy a very cheap property and rent it out. Then when it becomes time to move out of home into your investment property you with have good equity in the home. If you sell the property to buy a better house you will have to pay capital gains
the average income of negative gearers is $60k because that's what's left of their taxable salary after they've negative geared! That's the whole point, to make your $100k salary look like $60k by deducting $40k in interest payments. Business owners can't offset their salary with the interest on business loans, they can only offset it against the profits of the business. Only property investors can say "well the business lost money so I'm claiming that against my salary". If you can't run your business at a profit, you shouldn't be in business.
@@Herbert12864 What bargins? rents are up like 30% over the last 3 years... keeping renting costs down is one of the many claimed (but never proven) positives of the whole negative gearing policy
Fun fact: negative gearing as originally conceived was to encourage private investors to build new houses to help offset the Federal government's impending reduction in funding new housing stock. Today, only 3% of negatively geared properties are greenfield investments, the other 97% are tax write offs on existing housing. It's rare to be able to calculate a policy failure so accurately but there you have it: negative gearing as a policy has only been 3% successful. There is no rational measure to justify its existence in its present form. It only distorts the housing market and exacerbates the divide between the rich and the rest of us.
It was introduced 100 years ago, was briefly abolished and then quickly brought back as it caused housing shortage and rent increases. It's mass immigration that is causing massive demand shortage and the fed government are not honouring their commitment to build new homes. Negative gearing is not some uniquely australian concept and other countries don't suffer the same issues. It's easy to attack but not supported by data. If it didn't exist then it would very likely be introduced now anyway to address the housing shortage
@@stewatparkpark2933 if you couldn't write to profits of your property losses off against your income from other streams then you'd be close to correct but that's not how capital gains works since Howard changed it.
Get rid of it. Stop foreigners buying Australian real estate. If they want to live here they can rent from an Australian . They can also put caps on rent.
The voting power still mostly lies in the hands of the older generations (Boomers & GenX) till there is either a shift in control, the ratio of 5 to 1 drops or power is handed over, no change will happen…..In order for change to happen a lot of people need to step down from positions of power and strong regulations need to be put in place with ceilings and minimum standards set, until then the rusted on voters will continue to threaten the future with poor policy from a party only committed to increasing their wealth and not the quality of the future for the next generations to inherit.
@@rolandnelson6722Whilst I think this will likely be the case, voter demographics and sentiments are shifting. It may be an opportunistic time to go back to the drawing board.
Keating got rid of negative gearing in 1987. Result - rents went through the roof due to investors fleeing the market. Labor had to later reinstall it later to restore balance to the rental market. Get rid of it and the same thing will happen again. Doesn't bother me, rental property is a terrible investment. I get a much better return on shares.
Genuine question, I'm not too knowledge in this field. Wouldn't investors fleeing the market be a positive thing for the country? Would it not then free up more houses for potential buyers? Could the government not purchase houses and rent them at more affordable rates? Or are property investors likely to hang onto the houses and therefore they won't be on the buy or rent market?
@@HovercraftEuphoric government won't spend the money and investors won't want to sell as capital gains is so high. I agree that investors can leverage equity (if they have a sufficiently broad portfolio) to disadvantage buyers but that's ignoring the massive generational wealth of older australians who have gained huge equity in their properties and can unfairly compete themselves or by assisting their kids
so easy to blame investors who are actually making less and less returns relative to capital values. The problem is the massive immigration into the country which is driving up demand even further and a lack of skilled construction workers coming into the country. The government is also doing nothing at all to meet its own commitment to build new homes. If it wasn't for immigration we'd been in recession but it's also massively adding to the housing crisis. Much easier for the government to ignore all this and allows Australians at each others throats on problems they have created themselves.
It's not just getting a 50% discount on CGT when selling their investment property, but they a also get a 100% discount if they sell their principal place of residence.
You can't charge CGT on the principle place of residence otherwise people who've owned their current place for ages wouldn't be able to move to even an identical house next door! Imagine a retiree who bought their home 40 years ago for 50k, and then they decide they want to *downsize* to a unit - something we definitely want to encourage - Lets say their house is worth a million dollars now, and they want to buy a unit worth 600k. Sounds reasonable? Well if you charged them CGT, they'd have to pay nearly 50% tax on the rise of value on their home (something that happened through no fault of their own and isn't really benefiting them because they are only to sell in order to buy in the same, much more inflated market), so instead of getting a million dollars from their sale, they'd get 525k and wouldn't even be able to afford the unit they were trying to *downsize* to! In general it is kind of crap that we are taxed on the *nominal* gains of our investments.. this is especially true with savings, where you are taxed on every cent of interest 'earned' even though that interest probably doesn't even cover inflation. So you are in fact losing money in real terms yet they are taxing you like you're 'gaining' something...
@@mattr8750 If you see a Tax Agent regarding the minimisation of CGT once you had a house sale event, they can deduct more than just the cost base (let's say $50,000) - I think they can also claim years and years worth of land tax etc if charged, to find their actual capital gain. It won't be anywhere near $950K, and therefore nowhere near $475K in tax
By definition, if the property is making a loss, the rent is not high enough. Therefore renters are paying less than full price , that’s good, isn’t it?
No. 'By definition', the rent is set due to multiple other factors. For example, speculating on property has driven up the overall price of proper exponentially over the last 25 odd years. These are people expecting a tax cut and a capital gains windfall. You can see these changes hit on a graph of the prices of the Australian property market. So you get a falsely inflated property market. People take on enormous amounts of debt to buy property, and then when their interest rates and insurance get jacked up, they seek to make the most they possibly can out of rent so they can actually afford to make the payments, regardless of an expected tax deduction. It's fairly easy to work out. Overinflated house prices = overinflated rents.
As a nurse I am sick to death of hearing about "nurses" negative gearing. I have been a nurse for 15 years and don't know a single nurse with a rental property. We've had a 1% pay rise over the last 2 years, we can barely afford to live so stop using use as your "aussie battler" excuse for keeping negative gearing.
Well the explanation correct and the effect on price is probably on par but will a 5 to 12% price fall really make that big of a difference to prospective buyers when prices have gone up between 30 and 50% in the last few years with wages barely rising at all? Population growth is by far a bigger contributor to home prices than negative gearing yet nobody wants to address that since the vast majority of population growth is immigration and then you are automatically called a racist. But population growth is the number cause of house price inflation with interest rates just causing temporary boom cycles bar none.
Have any data to back that up at all? Immigrants my be adding to the competition for housing but ultimately they are stuck in the same market as native born citizens, they don't benefit from the top of town being rewarded for owning more than they need.
@@Tasmantor I have never suggested that immigrants somehow benefit at all. As for top end of town owning too much I own more than one property and my day job pay is below the average wage. What you will find is most landlords are average people who made sacrifices to get ahead. They work more hours and live tight. I could not have bought my first home without negative gearing on the minimum wage as I did. I lived in that home five years later for the next 18 years. Negative gearing can work for anyone willing to think outside the box.
@@Tasmantor and do I really need data? NZ is in the process of abolishing negative gearing and while there has been a bit of a dip in prices (which was more to do with rising interest rates) it has hardly become affordable.
while negative gearing is a rort, the CGT discount and allowing interest only loans are the problem. get rid of those 2 and nobody will bother investing except the super rich who arent exactly finding the current tax system a barrier to entry ie they do it already
the govt did it as it thought it was the best way to subsidize rents, thus keeping them lower. if neg gearing goes then rents go up and then when the property makes money it can not be taxed not be liable for CGT. I would take that.
I am 54 and I still can't get into housing market coz of this damn negative gearing. abolish it please and let average or low-income people have a chance to buy their first homes!
Its perfect. Some people try really hard to become wealthy while others just rely in Centre link. CGT should be 90% discounted. Coz wealthiest don’t even receive a government pension.
People forget the 50% CGT was introduced to simplify CGT calculation. Previously, you had to to calculate the inflated value of the asset to work out your capital gain.
a worth while change as all tax is calculated by hand because the computer hasn't been invented yet and your phone doesn't have magnitudes of order more processing power than is needed to calculate something as complex a tax sum.
@@stewatparkpark2933 That makes sense to me, but its telling you don't get such treatment on bank savings, where every cent of interest is taxed even though its very likely that interest would not even be keeping your cash from diminishing in real terms. Likely this is because the government wants to encourage more productive uses of cash (like investments), but there is *definitely* a public/economic good to people having an adequate savings buffer for emergencies, in fact its the most important first step in giving people the confidence *to* start investing. We should have a level of interest you can earn tax free. Like they have in the UK.
We've got the internet now. The idea that people can't calculate inflation on an asset because it's "too hard" while being able to get their heads around the tax dodging of NG'ing is silly.
Here is an idea. How about the Aussie government fix the underlying reason why negative gearing is so attractive in the first place. Reduce all of the the income tax brackets significantly and you will not only put more money in the lower and middle class pockets, but you will also reduce the need to negative gear in the first place…. But no Aussie official has proposed that to my knowledge
Parents negative gear so their children can rent from them. Their children don't have sufficient funds to afford the initial deposit. They also face a major difficulty in obtaining rental properties without this assistance.🎉
To level the playing-field for home owners, why not allow home owners to deduct their property expenses from their income? Thats how Maggie Thatcher drove UK home ownership through the roof.
Accounting has 2 sides . If the family home became just another investment asset with deductible expenses then it would also have to be assessed for capital gains tax when it was sold .
That is why I got out of investing in property. No one mentions the hassle of dealing with bad tenants. A tenant left $15k worth of damages. Negative gearing did not help to pay for the damages to get the house ready. They don't know what they are talking about.
Here's the important point: interest on a loan is tax-deductible when the loan is used to acquire or maintain an income-producing investment. That's the only reason why you are able to negative gear, because you "gear it" so that the tax deductable interest payments are greater than the income from the investemnt, in other words, you actually want the interest payments to be higher. The profit comes from the capital gain (when and if you sell it), not from the annual income. But then they dont sell it, they use the capital gain on paper, to purchase more investment properties. The simple solution is to remove the tax deduction on interest payments for residential housing, if it is not your primary place of residence. This would be more equitable, because giving the tax deduction on interest payments to the ordinary home owner helps him or her buy a home to live in.
@@stewatparkpark2933 lol. The present system resulted in a huge shortage of rental properties, hundreds of thousands of homeless people, AND huge inflation in house prices. Negative gearing was introduced to encourage business investment in rental property, and it didnt work. My suggestion of course would take years to take effect, and house prices would crash, which is a good thing in the long run.
@@jumboegg5845 it was clear when it was briefly withdrawn that the housing shortage was more acute and rents increased further (which is logical when investors can't claim tax deductions). We need to address the high number of immigration which isn't sustainable with current housing supply and the government needs to commit to providing affordable public housing. There is such big crap to fix here including the rapacious banks keeping rates high, fudged job data and broader thinking to fix of a massive societal issue than just fixing negative gearing.
Negative gearing on flats and apartments is very important to get these structures built. Without negative gearing no one in their right mind would touch the building these black holes
Exactly I think people are opening a can of worms here, ruin it for investors, investors pull out, reduction in supply and increasing demand will only increase prices
Surgeons do not buy up heaps of houses to reduce their income. They have various trusts set up to minimise tax. Taking away negative gearing will reduce the number of housing available which will increase rents. Here is a better idea, increase the GST (rich people consume more than poor people) put it across all items (research shows that rich people spend more on things like fresh food) so we then ensure the rich pay their share. Much simpler to do and no reduction in housing stock.
If negative gearing is removed, trust me, the rent will sky rocket. On a 500000 house, d mortgage is around $3300 monthly so d rent will must be at least $1000 weekly for d landlord to break even after council rates and real estate fees. Be prepared renters. Don't let people who know nothing about finance talk like they know. You still make a loss despite neg gearing. Cos remember that $3300 mortgage? Yeah. Bank interest not taken out yet. So , in summary, if d gearing is removed, get ready to pay at least 60 percent more rent and insane housing crisis
You are right of course and anyone with an ounce of financial understanding will agree with it. Yet the financially very illiterate who support reduction of or abolition of negative gearing can't see that reduction of investment into housing will mean fewer houses for sale or rent since there will be less money invested in maintenance or existing or building of hew housing. It is all stupid thinking but supported by the likes of The Austraia Institute (A Greens politcally policy organisation ) and Greens candidate Max Chandler-Mather and his band of financially and economically challenged. Their insane financial understanding and policy is:- Less investment means more production!
No investors = no rentals.. The truth is with out NG there is no incentive to invest in a rental .. at sub 4% returns.. which would leave all the heavy lifting to government or big institution like super... Then we will be really screwed...
@@stewatparkpark2933 If you own more than 1 then you are rich because way more than 75% DON'T have a "passive income" stream, passive being the code for someone else working to pay off your house.
@@stewatparkpark2933 average people are struggling to feed their family's and even find a overpriced rental, to rent! at more than the price of a Morgage! you are rich and your ignorance screams entitlement.
Remember many years ago Government built social housing, they off loaded this cost to the private sector by providing the tax incentive. The problem is the cost of housing has increased far beyond wages. Investors are providing homes that should not be demonised.
Investors are buying houses for profit, they should be demonized and we should not be subsidizing them with state money. They are buying houses that in other circumstances would have been bought by young families. We should tax things we want less of, we want more people to own their own homes - well then we need to tax investors more
"If its a business, shouldn't you be able to claim tax deductions for losses? (sigh) It's a business that increases inequality and makes it harder for everyday Aussies to have a roof over their heads.
The problem is, without that business, we would have a serious shortfall of rental accommodation. The combination of un bridled immigration and next to no investment in public housing over the past three decades is a crime, in my opinion.
@@davidbrayshaw3529oh they say that but it’s rubbish. If the market weren’t so inaccessible, more people would buy than rent anyway. At a rough guesstimate, I would think it’s a zero sum problem. We literally have a serious shortfall of rentals in the current condition anyway (in fact, quite a number of regions have NO rental availabilities).
Very few are rental businesses you have to hold many like a darn Meriton building to do that! Most are just passive investors ie just collect the rent! They aren’t businesses for tax purposes, Waleed made the wrong analogy there!
@@davidbrayshaw3529 False dilemma fallacy. We don't need businesses geared to make a loss in order to have houses for people. We don't need individuals who own squillions of houses.
Interesting negative gearing was introduced in 1985 by Hawke government. It was introduced to encourage investors into property market to help provide sufficient properties for people to rent.!!!!
....aaaaaaaaaaaaaand it's failed completely. it hasn't encouraged the building of NEW dwellings, it just allows people to buy and sell existing ones for tax advantages. Why would any country in their right mind stick with such an obviously failed policy? Because boomers benefit.
What did we do before that? subsidizing business and private investors instead of just continuing a public housing policy of worth was one of the worst decisions we ever made
Of course the median income of negative gearers is low. That's because negative gearing is one of many ways rich people reduce their income and avoid tax. A person earning $60k will struggle to afford to buy a property, let alone afford to lose money renting it out!
i do not wish to meddle in british affairs or anything... but send geologists. you guys make pretty good geologists (actual fact, because british geology students study the earth science not the shortcut to where the cash is) ... its a compliment :)
Yes. They invest for their retirement and that means less pressure on the government to provide pensions but financially illiterate people like Greg Jericho and the Australia institute (a Greens Party organisation) continue to put across false narrative that somehow reducing or doing away with negative gearing and resultant less investment will create more housing. Nowhere has less investment created more production. Their ideas and resultant policies are just laughable and truly the ideas of the financially mentally challenged.
getting rid of negative gearing WILL NOT create more housing, building houses will. So many inaccuracies here, some correct of course. Rents go up, then not positive taxes once it makes money nor CGT. People can also take out loans for shares and every other investments.
alot of people work hard to get rich. Australia is one of the only place where being hardworking is wrong. And being lazy and always complaining about things get you somewhere. People should start to take responsibility and not always hope the government give them money give them free stuff. Is this a aussie culture or some bad habit that many years of labor government have inculcated? :(
The benefit of negative gearing to a relatively low income earner is marginal at best, becasue they have to pay rent to live in another house. Negative gearing simply allows them to purchase a house, any house, anywhere they can afford, but no doubt its not close enough to work, otherwise they would be living in it instead of renting it out. They of course lose the negative gearing tax deduction if they ever decide to move into their "investment property".
@@stewatparkpark2933 They who? I was talking about the relatively low (median) income earners mentioned in the video. For these people, any capital gain they might make, is negated by the amount of rent they've paid over the same period.
They will reduce only one property negative only.. investors will start selling especially cashed up indians from overseas buying adelaide realestate.. big win for first home buyers
This discussion has been going on for forty years. It would take a brave politician to champion tax reform and see it through. No one has the intellectual capacity to fight the vested interests.
Imagine I own an investment property that returns $500 a week in rent, but costs me an average of, say, $700 a week to finance and maintain. If my other taxable income is, lets say, $2,000 a week, how many such properties can I afford to own, given that I’m loosing two hundred bucks a week on each and every one of them? Don’t forget, you BUY tax deductions (they do not come for nothing) and you can’t go on forever loosing money. My late father died in 2018 and owned a block of 5 flats, in Adelaide, that were freehold. In his last financial year the flats grossed around $1350 a week, but netted $709 per week. More than the age pension, but he had to run and maintain the damn things, which kept him on his toes.
NG seems like a band-aid policy to increase rental supply for a short term but mistakenly being deemed as a long term solution. Now it’s down side shown as houses become a financial game. However simply getting rid of it without other policies might increase rental. The real solution is that gov should tax more on owning 3rd and above investment properties and build more rent -to-own (as what Singapore is doing). Primary housing is a human right. Secondary house a nice to have. After that they are financial tools. We shall separate the two markets : house as an essential living conditions and houses as financial assets. Mixing the two would only make it a money game where the richer taking advantage and increasing the gap in a long run.
Well if I cant negative gear an investment property I will negative gear a share portfolio. That has many advantages, don't need to deal with tenants, the interest on the line of credit is a tax deduction, Accounting fees a deduction, broking fees and advisors fees a deduction. Plus with the right shares you get franking credits with your dividend. And I can sell part of my portfolio for a holiday, unlike a house you cant sell off a bedroom for a holiday. Dont need landlords insurance or have to deal with dodgy tenants. And I have never had to buy a new hot water system for a share portfolio. And yes interest on a line of credit is higher than a mortgage, oh dear that means a bigger deduction?? Selling shares the capital gains is the same.
Getting rid of negative gearing will do nothing to address the imbalance of supply and demand that is the structural issue that’s underlying this crisis . The principle of negative gearing is a standard business / taxation practice where interest on borrowings is tax deductible. It’s a smoke screen to obscure the real issue - completely out of control insane population growth - cut population growth dramatically and watch prices begin to correct
Capping is the only sensible answer, capitalism itself changes into monopolism without a cap on earnings from all sources, not just negative gearing. Capping earnings at the source with a progressive tax is a single lever that is easily adjusted, the alternative is to let it flood and then try to legislate and legislate to save those who are drowning.
When a taxable capital gain is made on an asset held for more than 12 months, half the gain is added to the individual's income in the fiscal year of sale. For investment property this means that most of the gain is taxed at the highest tax bracket. But that gain has often be made over a decade or two. When the law was changed to halve the taxable component of the gain, it was to offset the removal of inflation indexation over the ownership period, which used to reduce the taxable gain. If CGT concessions are removed, the ATO will be obliged to restore that inflation adjustment, to ensure only real gains are taxed, not imaginary ones. If inflation remains high for just 8 years at 5% inflation or 10 years at 4% inflation sellers after that 8 or 10 years of ownership would pay less tax than they currently do with the 50% CGT discount, due to indexation. Be careful what you ask for. Any fiddling with NG or CGT concessions will deter investors. That would kill the apartment construction industry that is critically dependent on investor presales to secure construction finance. Notable exception: Harry Triguboff who self finances. Then what will renters do?
As a practical example, I am sitting on capital gains on US shares I have owned for between 15 and 30 years. If I sell under the current regime, I will pay about 24% tax (half the top rate) on gross gains.IF this discount was removed but indexed for inflation over those decades (like it used to be), I will pay way less CGT. So go on Albo, bring it on, I dare you. You will lose office over it, so I would get to win twice.
oh no what if all the petty landlords had to sell their loss making homes for people to live in them! Then all the extra houses on the market would drive the prices down and the greedy c*nts who tried to make bank off others backs might loose money, oh the HUMANITY.
@@FuIhat You have displayed a very poor ability to put 2 and 2 together just like those who want to eliminate negative gearing which will put a lot of investors off making more housing available and inevitably result in less housing and therefore higher rental costs.. Show any model that has resulted in anything opposite if you can. - But you won't.
Most of these people including Greg Jericho are too financially illiterate to realise that reducing negative gearing will result in less investment into property and therefore less property to rent which will drive up rental costs. They are the worst enemy of the people they pretend to be able to benefit. Jericho is only interested in his personal benefit of supporting the Green Party policies which masquerades as the Australia Institute.
A lot of mum a dad investor's use negative gearing,take it away and people will look for another investment and less properties will be built,the greens have got this wrong no surprise here.
All losses are tax-deductible... from property investments, shares, businesses, crypto, etc. All gains are taxable from ANY asset class. The government does not and can not afford to build all homes for renters. Without investors, the current rental crisis will be much WORSE! The current system is very fair. If it was too generous, all of you readers would own more than 10 investment properties.
then remove the tax deductions and they'll continue to buy. Your argument in every other thread here is that without NG there wont be homes but here your stand alone point negates that.
@@Tasmantor Without NGing the numbers won't stack up for many potential investors which will result in a reduction in the amount of rentals available .
Politicians and the media need a lesson in basic economics. Remove negative gearing landlords that are negative will sell up. Given current demand housing prices won't fall, but rents will explode. There was a reason why it was reinstated after its removal in the 80s.
When all think alike, then no one is thinking. There is more to negative gearing than the simplistic view presented in this show. The so called experts on the show are either naive or simply out to mislead their audience. People should realise that, apart from a raft of unintended consequences (e.g govt losing capacity to collect any CGT when an investment property is sold), if you get rid of negative gearing, it is only a matter of time before profit from the sale on your PPOR becomes taxable. Be careful what you wish or advocate for.
Politicians are in it for themselves. It is almost inconceivable that they's support policies that would disadvantage themselves. Pay cuts, shorter terms, individual unilateral voting.
Who in their right mind is going out to buy a property just to lose money on to reduce their taxes? Come on what a stupid remark. Every other investment is eligible for tax losses why should properties be any different? Let's be honest, negative gearing is not the reason for housing shortages. Its been around since the 1930s why is it suddenly now an issue? The issue is that the Australian government does not have a forward-looking plan for housing. Australia is always very reactive. Only when there is a problem, then they begin to try to fix it but by that time it's already too late, and the problem will be compounded.
They make false statements and don't focus on anything where they think the government is losing money. The reality is the treasury does not lose money from negative gearing. If people could not negatively gear there would be less investment in housing meaning less housing and fewer number of properties would be in existence to sell so the treasury would get less capital gain tax when fewer of the properties were eventually sold at capital gain. But those like Greg Jericho and Matt Chandler Mather are too short sighted and financially challenged to be able to understand that.
The financially very illiterate who support reduction of or abolition of negative gearing can't see that reduction of investment into housing will mean fewer houses for sale or rent since there will be less money invested in maintenance or existing or building of new housing. It is all stupid financial thinking but supported by bad thinking of the economists of organisations like The Australia Institute (A Greens political policy organisation) and vocalised by Greens candidate Max Chandler-Mather and his band of financially and economically challenged. Their insane financial understanding and policy is they basic reason they have this policy of less investment means more production which something that has never existed in the real world and can’t and never will.
Greg Jericho is so judgmental and incorrect with he's statements. He said, "the only reason they are doing that (meaning purchasing a rental property) is so they can reduce their taxable income" . He makes out like everyone with a property is stupid. Who would purchase an investment with the intent to loose money so you can reduce your tax bill? It is one asset class to invest in where you can leverage to manage a larger asset. You can do it with shares, borrow money to buy more share and you can offset the interest expense against the income the shares generate. This is only getting airplay, because govt has done a crap job of providing enough public housing, then invited so many immigrants in without anywhere to house them. It will have a negative effect on the current housing supply and rents will only increase ...... because there is just not enough supply. I'm thankful the tax system is where it is, otherwise I wouldn't have a place to rent or would be competing for even fewer options to rent.
I’ve never heard of “nego-gearo”, & I’m an Aussie & older than that goose called Nick who didn’t explain it well at all. If you want to listen to the Greens (aka “watermelons”), we’re totally stuffed as a nation & the economy will shrink along with opportunities. Investment properties are an independent income stream & a self-funded superannuation method. If this government wants to change this along with the other “super” changes, & the Stage 3, then we live in a country that you can make plans based on taxation stability. Typically this show refers-to or talks to lefty shit-canners. “Greg” most investors are not rich, if you didn’t have negative gearing you would have broad-based investment in property. Enough of these SJW’s I bet each of them on the panel has an investment property. An investment property is one of the few ways, excepting hard work, where normal working people can get ahead, take that away, what’s left ? The share market? Heaven knows removing the stage 3 tax changes means there’s less incentive to work harder, bracket creep will remain especially in a high inflationary market, then say add IR changes will strain employee/employer relations to the detriment of productivity - to make it a potential criminal offense to receive a call after work hours (bridling businesses say calling staff for change of shift or overtime etc) - it’s all crimping the potential to get ahead. What’s next death taxes?
Another stupid incorrect statement from Jericho who it seems has done no resaech on the subject but says " we are talking about a sort of finite nember of houses in Australia". Total B.S. which defies reality. The available stats indicate 137 houses were built in the past year to 2023 and on track for over 150,000 for 2024. There is no finite number.
It’s a moot point. Negative gearing is the third rail of Australian politics. Look elsewhere to improve Australia. Pointless waste of timing hoping it’ll go away.
Negative gearing is shit. Having a property portfolio is a small business. Who in the right mind would purposely go into business at a a loss? Terrible Plan
Dumb logic. Neg gearing was brought in to increase rental housing....it lasts only a few years as houses become positive geared. Supply is the problem.
Odd how supply is the problem when we are building record numbers of new dwellings. I'm sure you, regurgitating tired talking points from the landlord lobby, are just as informed as a guy who's job is looking into the housing market and reporting on it.
negative gearing increases the housing supply. The Gov could never build enough houses as individual investors. They dropped in in 1989 and created a huge price increase and shortage, they dropped it immediately. The Greg guy is lying. people invest in houses to make money, not to avoid tax. The negative gearing is not huge, but the profit from capital growth is.
Simple answer is You can have only one property to negative gear. That will help the small investor as well as the renters as well as new home buyers.
So someone who help out only one renter is somehow better from someone who helps out two renters or more ? Where did you get that idea from?
Does someone who feeds at their own cost a neighbour somehow OK and better than someone who feeds at their cost two neighbours ? That seems to be your argument.
@@Rob-fx2dw unless they built the rental property all they are doing is preventing someone else from owning a home
@@ManCatCheese You have not thought that out very well. You have been too simplistic in your thoughts. Things do not just exist without investment.
The reality is all houses either new or not have to be built and maintained over their life. The fact that someone builds them from new is immaterial because it is all investment in property which someone must build and maintain. All newly built houses become those built last year or earlier and purchasing is only one part of creating accommodation for an owner or occupier just as putting an investment into a business creating building products provides new building products that would not otherwise have been created and available for people to buy or rent.
@@ManCatCheesethat’s not how economics works, why do people just repeat bullshit without checking if it’s true, I mean you must be 16 to believe this.
@@Rob-fx2dw There's nothing that needs to be "thought out". When you have first home buyers competing with investors the price of homes goes up. That's simply supply and demand. Investors have a competitive advantage against first home buyers as they can leverage their equity in other properties. If an investor wins the bid to buy a home, then all that is created is one more renter. If the first home owner won the bid, there would be one less renter, and a family that now has secure housing without the control of a landlord. The problem is that you are viewing housing purely as a commodity, as a wealth builder, when it should be something everyone can access. Property investing into existing assets is not a productive industry. You aren't making anything, simply withholding the ability for someone else to own their own home, and charging rent for the privilege. If you are building houses and then selling them to first home buyers, you are adding value to society and that is a good thing, even if it is a build to rent.
I’m voting for whatever party vows to scrap this. The end.
I'll vote for the one that reduces immigration and commits to building affordable public housing. PS they wont
Same
The reality is that negative heating is everyone’s opportunity to own a property, to want to change this opportunity is madness
Greens want it scrapped
@@matthewrobinson8886stop it now and people who have been doing it for the last 10 years should pay the tax they should have paid in the first place even if it means they must sell one of their properties to be able to pay their tax debts! The $ the govt gets back can be used to build more public housing homes & affordable homes
Good explanation of negative gearing. In the interest of fairness, Dutton has 6 investment properties. As if Project viewers need to have their prejudices against Labor re-enforced.
And he got his first one from Mum and Dad
He's not the PM.
As with everything, yes, the Libs are worse. But they're also not in government currently. So criticism will (rightly) be coming for Labor
@@AK-np4rpand hopefully never will be
@@hjf3022 Most people here agree with you but that doesn't change the fact the party in power are responsible for their action or inaction. If they fail to fix the system when they have the power to, it's on them, not the LNP.
How many invest properties does Waleed have?
More than the PM, that's for sure
He does seem very keen to defend the practice 🤔
@@joshwells3247 Those hands, all of them have never done a day's work in their lives. Just the guffawing over the Menindi lakes fish kill. Their Job is to look for laughs, nothing else.
@@Itsokay.nottobeokaaaay Not jealousy friend, it's a policy that makes a fundamental right, one open to speculation. Worse still, you have an incentive for loss in your business model, one in which those squeezed on the bottom rung do your lifting. If it's such a fair system, then you don't need subsidies.
@@Itsokay.nottobeokaaaay bet you're loving the interest rates atm
The project sucks, as if those bastards dont have multiple properties they negative gear.
If they are advocating against their own interest for the national interest, then good for them.
There not ! Just need to mention it just like prime minister he has 3 property's .
Interesting how you target your criticism towards those (allegedly) operating within a law that you don’t support rather than criticise the government for actually having the law in place.
Because every time Labor or the Greens try to push reform these gits will immediately say "but mum and pa investors" and its really annoying that after years of screaming about how reform will destroy australia they go "oh but what is it" @@damian76111
Self-righteous all of them .. privately educated .. Chardy lefty's ..
Property is one of Australia’s financial pillars
The Project, such a cringeworthy show.
And gutless never open comments section for the public to have their say
They are afraid! living in a bubble !
As your rents increase with time and your equity increases, the gap between negative gearing and positive gearing decreases and usually after around 10 years you begin to have to pay tax.
Then if you sell your positively geared property you have to pay tax on the deamed value.
You cannot use the scenario of the beginning of negative gearing and not take into account that firstly you are reducing your income to live, ie, having a lower standard of living by forgoing a large proportion of your wages to pay the interest on your loan.
I have been saying for years, while you are young and living at home, if you save a deposit and buy a very cheap property and rent it out. Then when it becomes time to move out of home into your investment property you with have good equity in the home.
If you sell the property to buy a better house you will have to pay capital gains
the average income of negative gearers is $60k because that's what's left of their taxable salary after they've negative geared! That's the whole point, to make your $100k salary look like $60k by deducting $40k in interest payments. Business owners can't offset their salary with the interest on business loans, they can only offset it against the profits of the business. Only property investors can say "well the business lost money so I'm claiming that against my salary". If you can't run your business at a profit, you shouldn't be in business.
Best put rents up. Why are renters getting bargains then?
@@Herbert12864if you’re relying on rental income and tax concessions to pay a mortgage, you have no right to own that investment property
Bingo, sick of greedy landlords screaming bloody murder when they find out their INVESTMENT has RISK.
@@Herbert12864 What bargins? rents are up like 30% over the last 3 years... keeping renting costs down is one of the many claimed (but never proven) positives of the whole negative gearing policy
@@peterfarrell4731 but they are in line with where they should be over a 10 year period using CPI. Why would rental costs be below CPI
You left out that most neg gearing turns positive gearing in a few years...
Mate, everyone I know who negative gears has been losing money for years and then taking a hand out to stay afloat.
The banks make the most from this
Fun fact: negative gearing as originally conceived was to encourage private investors to build new houses to help offset the Federal government's impending reduction in funding new housing stock. Today, only 3% of negatively geared properties are greenfield investments, the other 97% are tax write offs on existing housing. It's rare to be able to calculate a policy failure so accurately but there you have it: negative gearing as a policy has only been 3% successful. There is no rational measure to justify its existence in its present form. It only distorts the housing market and exacerbates the divide between the rich and the rest of us.
It was introduced 100 years ago, was briefly abolished and then quickly brought back as it caused housing shortage and rent increases. It's mass immigration that is causing massive demand shortage and the fed government are not honouring their commitment to build new homes. Negative gearing is not some uniquely australian concept and other countries don't suffer the same issues. It's easy to attack but not supported by data. If it didn't exist then it would very likely be introduced now anyway to address the housing shortage
Robert Kiyosaki once described negative gearing as "the government subsidising a loss making business"
Business pays tax on profit after expenses . Pretty simple .
@@stewatparkpark2933 if you couldn't write to profits of your property losses off against your income from other streams then you'd be close to correct but that's not how capital gains works since Howard changed it.
Socialism for the rich and rugged capitalism for the average person.
@@weirdo1083Capitalise the profits, socialise the losses. Good old big business!
Get rid of it. Stop foreigners buying Australian real estate. If they want to live here they can rent from an Australian . They can also put caps on rent.
If the next generation gets it's head straight and crushes the Coalition then the field opens up for much needed change👍
The coalition aren't in power.
The next generation has removed the Coalition in every state bar one, they've been battling the Coalition supporters for years.
The voting power still mostly lies in the hands of the older generations (Boomers & GenX) till there is either a shift in control, the ratio of 5 to 1 drops or power is handed over, no change will happen…..In order for change to happen a lot of people need to step down from positions of power and strong regulations need to be put in place with ceilings and minimum standards set, until then the rusted on voters will continue to threaten the future with poor policy from a party only committed to increasing their wealth and not the quality of the future for the next generations to inherit.
Even if the coalition was eviscerated: Labor will never approach negative gearing again, because it has proven fatal to them in the past.
@@rolandnelson6722Whilst I think this will likely be the case, voter demographics and sentiments are shifting. It may be an opportunistic time to go back to the drawing board.
Greg Jericho is a dead set legend. He brings receipts and explains the point so succinctly.
...in the very short (attention span) period afforded him by the programme.
No he is not
@@jimdavid7710 you must be excellent at debates
Keating got rid of negative gearing in 1987. Result - rents went through the roof due to investors fleeing the market. Labor had to later reinstall it later to restore balance to the rental market. Get rid of it and the same thing will happen again. Doesn't bother me, rental property is a terrible investment. I get a much better return on shares.
Genuine question, I'm not too knowledge in this field. Wouldn't investors fleeing the market be a positive thing for the country? Would it not then free up more houses for potential buyers? Could the government not purchase houses and rent them at more affordable rates? Or are property investors likely to hang onto the houses and therefore they won't be on the buy or rent market?
@@HovercraftEuphoric government won't spend the money and investors won't want to sell as capital gains is so high. I agree that investors can leverage equity (if they have a sufficiently broad portfolio) to disadvantage buyers but that's ignoring the massive generational wealth of older australians who have gained huge equity in their properties and can unfairly compete themselves or by assisting their kids
so easy to blame investors who are actually making less and less returns relative to capital values. The problem is the massive immigration into the country which is driving up demand even further and a lack of skilled construction workers coming into the country. The government is also doing nothing at all to meet its own commitment to build new homes. If it wasn't for immigration we'd been in recession but it's also massively adding to the housing crisis. Much easier for the government to ignore all this and allows Australians at each others throats on problems they have created themselves.
It's not just getting a 50% discount on CGT when selling their investment property, but they a also get a 100% discount if they sell their principal place of residence.
You can't charge CGT on the principle place of residence otherwise people who've owned their current place for ages wouldn't be able to move to even an identical house next door!
Imagine a retiree who bought their home 40 years ago for 50k, and then they decide they want to *downsize* to a unit - something we definitely want to encourage - Lets say their house is worth a million dollars now, and they want to buy a unit worth 600k. Sounds reasonable?
Well if you charged them CGT, they'd have to pay nearly 50% tax on the rise of value on their home (something that happened through no fault of their own and isn't really benefiting them because they are only to sell in order to buy in the same, much more inflated market), so instead of getting a million dollars from their sale, they'd get 525k and wouldn't even be able to afford the unit they were trying to *downsize* to!
In general it is kind of crap that we are taxed on the *nominal* gains of our investments.. this is especially true with savings, where you are taxed on every cent of interest 'earned' even though that interest probably doesn't even cover inflation. So you are in fact losing money in real terms yet they are taxing you like you're 'gaining' something...
Find out about the 6 year rule. Someone has to declare a place as their principal place of residence & many use that to not pay anything.
@@mattr8750
If you see a Tax Agent regarding the minimisation of CGT once you had a house sale event, they can deduct more than just the cost base (let's say $50,000) - I think they can also claim years and years worth of land tax etc if charged, to find their actual capital gain. It won't be anywhere near $950K, and therefore nowhere near $475K in tax
By definition, if the property is making a loss, the rent is not high enough. Therefore renters are paying less than full price , that’s good, isn’t it?
No. 'By definition', the rent is set due to multiple other factors. For example, speculating on property has driven up the overall price of proper exponentially over the last 25 odd years. These are people expecting a tax cut and a capital gains windfall. You can see these changes hit on a graph of the prices of the Australian property market. So you get a falsely inflated property market. People take on enormous amounts of debt to buy property, and then when their interest rates and insurance get jacked up, they seek to make the most they possibly can out of rent so they can actually afford to make the payments, regardless of an expected tax deduction. It's fairly easy to work out. Overinflated house prices = overinflated rents.
Negative gearing is the No 1 reason our children have no chance of buying a home in the so called lucky country they call Australia!
no it is not.
As a nurse I am sick to death of hearing about "nurses" negative gearing. I have been a nurse for 15 years and don't know a single nurse with a rental property. We've had a 1% pay rise over the last 2 years, we can barely afford to live so stop using use as your "aussie battler" excuse for keeping negative gearing.
Wow. I know of a nurse that has a rental property. Perhaps it's something that's not common.
Well the explanation correct and the effect on price is probably on par but will a 5 to 12% price fall really make that big of a difference to prospective buyers when prices have gone up between 30 and 50% in the last few years with wages barely rising at all?
Population growth is by far a bigger contributor to home prices than negative gearing yet nobody wants to address that since the vast majority of population growth is immigration and then you are automatically called a racist.
But population growth is the number cause of house price inflation with interest rates just causing temporary boom cycles bar none.
Have any data to back that up at all? Immigrants my be adding to the competition for housing but ultimately they are stuck in the same market as native born citizens, they don't benefit from the top of town being rewarded for owning more than they need.
@@Tasmantor I have never suggested that immigrants somehow benefit at all.
As for top end of town owning too much I own more than one property and my day job pay is below the average wage.
What you will find is most landlords are average people who made sacrifices to get ahead. They work more hours and live tight.
I could not have bought my first home without negative gearing on the minimum wage as I did.
I lived in that home five years later for the next 18 years.
Negative gearing can work for anyone willing to think outside the box.
@@Tasmantor and do I really need data? NZ is in the process of abolishing negative gearing and while there has been a bit of a dip in prices (which was more to do with rising interest rates) it has hardly become affordable.
@@TruthWarrior1 NZ are reinstating interest being a tax deduction .
When will the homeless have had enough?
while negative gearing is a rort, the CGT discount and allowing interest only loans are the problem. get rid of those 2 and nobody will bother investing except the super rich who arent exactly finding the current tax system a barrier to entry ie they do it already
If no-one invests, how will people rent?
@@bobcat718 people will buy if the market crashes with oversupply
If it was a vote winner why didn’t the LNP do it……I thought so
Immigration and low supply is the problem but neg gearing is legal theft from the taxpayer
the govt did it as it thought it was the best way to subsidize rents, thus keeping them lower. if neg gearing goes then rents go up and then when the property makes money it can not be taxed not be liable for CGT. I would take that.
I am 54 and I still can't get into housing market coz of this damn negative gearing. abolish it please and let average or low-income people have a chance to buy their first homes!
What have you been doing for the last 36 years?
Shelter is a need, not a want.
Please do not say "nego gear" ever again lol.
New construction only. We need to incentivize investments toward building new housing, not buying up existing housing.
Its perfect. Some people try really hard to become wealthy while others just rely in Centre link. CGT should be 90% discounted. Coz wealthiest don’t even receive a government pension.
1 % of the people have 25% of the houses what a Joke!!
People forget the 50% CGT was introduced to simplify CGT calculation. Previously, you had to to calculate the inflated value of the asset to work out your capital gain.
Inflation was deducted from the price increase so that tax was only paid on the real profit not the inflation .
a worth while change as all tax is calculated by hand because the computer hasn't been invented yet and your phone doesn't have magnitudes of order more processing power than is needed to calculate something as complex a tax sum.
@@stewatparkpark2933 That makes sense to me, but its telling you don't get such treatment on bank savings, where every cent of interest is taxed even though its very likely that interest would not even be keeping your cash from diminishing in real terms. Likely this is because the government wants to encourage more productive uses of cash (like investments), but there is *definitely* a public/economic good to people having an adequate savings buffer for emergencies, in fact its the most important first step in giving people the confidence *to* start investing. We should have a level of interest you can earn tax free. Like they have in the UK.
We've got the internet now. The idea that people can't calculate inflation on an asset because it's "too hard" while being able to get their heads around the tax dodging of NG'ing is silly.
Here is an idea. How about the Aussie government fix the underlying reason why negative gearing is so attractive in the first place. Reduce all of the the income tax brackets significantly and you will not only put more money in the lower and middle class pockets, but you will also reduce the need to negative gear in the first place…. But no Aussie official has proposed that to my knowledge
Parents negative gear so their children can rent from them. Their children don't have sufficient funds to afford the initial deposit. They also face a major difficulty in obtaining rental properties without this assistance.🎉
i see waleed still hasnt changed his tune since 2019 he must be hating this 🤣
I really can't stand him. He comes across so arrogant while being all for policies that hurt so many people.
He understands business and business expenses .
Negative gearing is how medical professionals and property developers accumulate wealth.
To level the playing-field for home owners, why not allow home owners to deduct their property expenses from their income?
Thats how Maggie Thatcher drove UK home ownership through the roof.
Accounting has 2 sides . If the family home became just another investment asset with deductible expenses then it would also have to be assessed for capital gains tax when it was sold .
the UK a place where housing is fine and good now thanks to Maggies changes.
Crazy that people spend $1.00 to save 30 cents.......
That is why I got out of investing in property. No one mentions the hassle of dealing with bad tenants. A tenant left $15k worth of damages. Negative gearing did not help to pay for the damages to get the house ready. They don't know what they are talking about.
Here's the important point: interest on a loan is tax-deductible when the loan is used to acquire or maintain an income-producing investment. That's the only reason why you are able to negative gear, because you "gear it" so that the tax deductable interest payments are greater than the income from the investemnt, in other words, you actually want the interest payments to be higher. The profit comes from the capital gain (when and if you sell it), not from the annual income. But then they dont sell it, they use the capital gain on paper, to purchase more investment properties. The simple solution is to remove the tax deduction on interest payments for residential housing, if it is not your primary place of residence. This would be more equitable, because giving the tax deduction on interest payments to the ordinary home owner helps him or her buy a home to live in.
Would result in a huge shortage of rental properties and hundreds of thousands of homeless people .
@@stewatparkpark2933 lol. The present system resulted in a huge shortage of rental properties, hundreds of thousands of homeless people, AND huge inflation in house prices. Negative gearing was introduced to encourage business investment in rental property, and it didnt work. My suggestion of course would take years to take effect, and house prices would crash, which is a good thing in the long run.
@@jumboegg5845 it was clear when it was briefly withdrawn that the housing shortage was more acute and rents increased further (which is logical when investors can't claim tax deductions). We need to address the high number of immigration which isn't sustainable with current housing supply and the government needs to commit to providing affordable public housing. There is such big crap to fix here including the rapacious banks keeping rates high, fudged job data and broader thinking to fix of a massive societal issue than just fixing negative gearing.
Negative gearing on flats and apartments is very important to get these structures built. Without negative gearing no one in their right mind would touch the building these black holes
Exactly I think people are opening a can of worms here, ruin it for investors, investors pull out, reduction in supply and increasing demand will only increase prices
Surgeons do not buy up heaps of houses to reduce their income. They have various trusts set up to minimise tax. Taking away negative gearing will reduce the number of housing available which will increase rents. Here is a better idea, increase the GST (rich people consume more than poor people) put it across all items (research shows that rich people spend more on things like fresh food) so we then ensure the rich pay their share. Much simpler to do and no reduction in housing stock.
Sorry that's incorrect. People on lower incomes consume more therefore the GST impacts them disproportionally.
Y2K bug ...the GST was introduced and the other taxes were kept. I don't understand why.
If negative gearing is removed, trust me, the rent will sky rocket. On a 500000 house, d mortgage is around $3300 monthly so d rent will must be at least $1000 weekly for d landlord to break even after council rates and real estate fees. Be prepared renters. Don't let people who know nothing about finance talk like they know. You still make a loss despite neg gearing. Cos remember that $3300 mortgage? Yeah. Bank interest not taken out yet. So , in summary, if d gearing is removed, get ready to pay at least 60 percent more rent and insane housing crisis
You are right of course and anyone with an ounce of financial understanding will agree with it.
Yet the financially very illiterate who support reduction of or abolition of negative gearing can't see that reduction of investment into housing will mean fewer houses for sale or rent since there will be less money invested in maintenance or existing or building of hew housing. It is all stupid thinking but supported by the likes of The Austraia Institute (A Greens politcally policy organisation ) and Greens candidate Max Chandler-Mather and his band of financially and economically challenged. Their insane financial understanding and policy is:- Less investment means more production!
Trust me if negative gearing is removed then they will sell that investment property, GOOD, houses aren't a commodity
No investors = no rentals..
The truth is with out NG there is no incentive to invest in a rental .. at sub 4% returns.. which would leave all the heavy lifting to government or big institution like super...
Then we will be really screwed...
i can explain it in 3 words, rich get richer!
75% of rental property owners only own 1 rental property . Just average people trying to improve their position .
@@stewatparkpark2933 If you own more than 1 then you are rich because way more than 75% DON'T have a "passive income" stream, passive being the code for someone else working to pay off your house.
@@stewatparkpark2933 lol only one
@@stewatparkpark2933 average people are struggling to feed their family's and even find a overpriced rental, to rent! at more than the price of a Morgage! you are rich and your ignorance screams entitlement.
@@Lo.0se You sound like a low achiever .
Most investors, if there are any buy new. Because the ratio of purchase price vs income is higher. Also there’s less maintenance.
Remember many years ago Government built social housing, they off loaded this cost to the private sector by providing the tax incentive. The problem is the cost of housing has increased far beyond wages. Investors are providing homes that should not be demonised.
Investors are buying houses for profit, they should be demonized and we should not be subsidizing them with state money. They are buying houses that in other circumstances would have been bought by young families.
We should tax things we want less of, we want more people to own their own homes - well then we need to tax investors more
"If its a business, shouldn't you be able to claim tax deductions for losses? (sigh) It's a business that increases inequality and makes it harder for everyday Aussies to have a roof over their heads.
The problem is, without that business, we would have a serious shortfall of rental accommodation. The combination of un bridled immigration and next to no investment in public housing over the past three decades is a crime, in my opinion.
@@davidbrayshaw3529oh they say that but it’s rubbish.
If the market weren’t so inaccessible, more people would buy than rent anyway. At a rough guesstimate, I would think it’s a zero sum problem.
We literally have a serious shortfall of rentals in the current condition anyway (in fact, quite a number of regions have NO rental availabilities).
Very few are rental businesses you have to hold many like a darn Meriton building to do that! Most are just passive investors ie just collect the rent! They aren’t businesses for tax purposes, Waleed made the wrong analogy there!
@@davidbrayshaw3529 False dilemma fallacy. We don't need businesses geared to make a loss in order to have houses for people. We don't need individuals who own squillions of houses.
@@OnlyAchievingHere True. And also we have many vacant houses that could be made available.
Should be focused on government being nire efficient, rather then always changing and adding taxes
Stop it and watch the homeless people grow why should taxpayers subsidies low cost housing don’t get it up the rents is another option
Or they could fu$k of stamp duty! The most rediculous nonsensical cost on buying a home.
Interesting negative gearing was introduced in 1985 by Hawke government.
It was introduced to encourage investors into property market to help provide sufficient properties for people to rent.!!!!
....aaaaaaaaaaaaaand it's failed completely. it hasn't encouraged the building of NEW dwellings, it just allows people to buy and sell existing ones for tax advantages. Why would any country in their right mind stick with such an obviously failed policy? Because boomers benefit.
What did we do before that? subsidizing business and private investors instead of just continuing a public housing policy of worth was one of the worst decisions we ever made
Of course the median income of negative gearers is low. That's because negative gearing is one of many ways rich people reduce their income and avoid tax.
A person earning $60k will struggle to afford to buy a property, let alone afford to lose money renting it out!
i do not wish to meddle in british affairs or anything... but send geologists. you guys make pretty good geologists (actual fact, because british geology students study the earth science not the shortcut to where the cash is) ... its a compliment :)
The main reason why the average aussie buys an investment property is to help fund there retirement.
Yes. They invest for their retirement and that means less pressure on the government to provide pensions but financially illiterate people like Greg Jericho and the Australia institute (a Greens Party organisation) continue to put across false narrative that somehow reducing or doing away with negative gearing and resultant less investment will create more housing.
Nowhere has less investment created more production. Their ideas and resultant policies are just laughable and truly the ideas of the financially mentally challenged.
getting rid of negative gearing WILL NOT create more housing, building houses will. So many inaccuracies here, some correct of course. Rents go up, then not positive taxes once it makes money nor CGT.
People can also take out loans for shares and every other investments.
doesn't matter how much it helps the higher income earners, it helps people who negatively gear. 60000$ is the median!
An other way around it is to increas rents so the property in not at a loss
alot of people work hard to get rich. Australia is one of the only place where being hardworking is wrong. And being lazy and always complaining about things get you somewhere. People should start to take responsibility and not always hope the government give them money give them free stuff. Is this a aussie culture or some bad habit that many years of labor government have inculcated? :(
Get rid of negative gearing & watch the rents go through the roof!
The wealthy have already established themselves. The divide will just increase?
The amount of commenters who clearly dont understand how negative gearing works is remarkable!
The benefit of negative gearing to a relatively low income earner is marginal at best, becasue they have to pay rent to live in another house. Negative gearing simply allows them to purchase a house, any house, anywhere they can afford, but no doubt its not close enough to work, otherwise they would be living in it instead of renting it out. They of course lose the negative gearing tax deduction if they ever decide to move into their "investment property".
They don't buy a rental for the negative gearing . They buy it for the long term capital gain .
@@stewatparkpark2933 They who? I was talking about the relatively low (median) income earners mentioned in the video. For these people, any capital gain they might make, is negated by the amount of rent they've paid over the same period.
The core problem is housing supply, keep hurting rental property owners with all kinds of tax will not solve the problem.
High income earners should just work less, or take a voluntary pay cut. Either that or move to a country where hard work is appreciated and rewarded
They will reduce only one property negative only.. investors will start selling especially cashed up indians from overseas buying adelaide realestate.. big win for first home buyers
❤❤❤❤❤ WELL THATS. THE. BALL BOUNCES THAT. OUR. GOVT. NOW. IT. COMES. OUT. THE. TRUE. COLORS ❤❤❤❤❤❤
This discussion has been going on for forty years. It would take a brave politician to champion tax reform and see it through. No one has the intellectual capacity to fight the vested interests.
So, John Howard was prime Minister when the GST was introduced. Why were other taxes not reformed then?
Imagine I own an investment property that returns $500 a week in rent, but costs me an average of, say, $700 a week to finance and maintain. If my other taxable income is, lets say, $2,000 a week, how many such properties can I afford to own, given that I’m loosing two hundred bucks a week on each and every one of them? Don’t forget, you BUY tax deductions (they do not come for nothing) and you can’t go on forever loosing money. My late father died in 2018 and owned a block of 5 flats, in Adelaide, that were freehold. In his last financial year the flats grossed around $1350 a week, but netted $709 per week. More than the age pension, but he had to run and maintain the damn things, which kept him on his toes.
Which means rents are cheaper
NG seems like a band-aid policy to increase rental supply for a short term but mistakenly being deemed as a long term solution. Now it’s down side shown as houses become a financial game. However simply getting rid of it without other policies might increase rental. The real solution is that gov should tax more on owning 3rd and above investment properties and build more rent -to-own (as what Singapore is doing). Primary housing is a human right. Secondary house a nice to have. After that they are financial tools. We shall separate the two markets : house as an essential living conditions and houses as financial assets. Mixing the two would only make it a money game where the richer taking advantage and increasing the gap in a long run.
I think.u mean decrease rental stock..every time they meddle people leave the market
Well if I cant negative gear an investment property I will negative gear a share portfolio. That has many advantages, don't need to deal with tenants, the interest on the line of credit is a tax deduction, Accounting fees a deduction, broking fees and advisors fees a deduction. Plus with the right shares you get franking credits with your dividend. And I can sell part of my portfolio for a holiday, unlike a house you cant sell off a bedroom for a holiday. Dont need landlords insurance or have to deal with dodgy tenants. And I have never had to buy a new hot water system for a share portfolio. And yes interest on a line of credit is higher than a mortgage, oh dear that means a bigger deduction?? Selling shares the capital gains is the same.
Getting rid of negative gearing will do nothing to address the imbalance of supply and demand that is the structural issue that’s underlying this crisis . The principle of negative gearing is a standard business / taxation practice where interest on borrowings is tax deductible.
It’s a smoke screen to obscure the real issue - completely out of control insane population growth - cut population growth dramatically and watch prices begin to correct
Capping is the only sensible answer, capitalism itself changes into monopolism without a cap on earnings from all sources, not just negative gearing. Capping earnings at the source with a progressive tax is a single lever that is easily adjusted, the alternative is to let it flood and then try to legislate and legislate to save those who are drowning.
When a taxable capital gain is made on an asset held for more than 12 months, half the gain is added to the individual's income in the fiscal year of sale. For investment property this means that most of the gain is taxed at the highest tax bracket. But that gain has often be made over a decade or two. When the law was changed to halve the taxable component of the gain, it was to offset the removal of inflation indexation over the ownership period, which used to reduce the taxable gain. If CGT concessions are removed, the ATO will be obliged to restore that inflation adjustment, to ensure only real gains are taxed, not imaginary ones. If inflation remains high for just 8 years at 5% inflation or 10 years at 4% inflation sellers after that 8 or 10 years of ownership would pay less tax than they currently do with the 50% CGT discount, due to indexation. Be careful what you ask for. Any fiddling with NG or CGT concessions will deter investors. That would kill the apartment construction industry that is critically dependent on investor presales to secure construction finance. Notable exception: Harry Triguboff who self finances. Then what will renters do?
As a practical example, I am sitting on capital gains on US shares I have owned for between 15 and 30 years. If I sell under the current regime, I will pay about 24% tax (half the top rate) on gross gains.IF this discount was removed but indexed for inflation over those decades (like it used to be), I will pay way less CGT. So go on Albo, bring it on, I dare you. You will lose office over it, so I would get to win twice.
Take away nego and rents will go up. Why would someone rent out a proprty at a loss unless there is a benefit? Who will pay in the end?
oh no what if all the petty landlords had to sell their loss making homes for people to live in them! Then all the extra houses on the market would drive the prices down and the greedy c*nts who tried to make bank off others backs might loose money, oh the HUMANITY.
Cutting negative gearing will not work.
Investors will just hike up rents to offset any lost income through legislation
What rubbish, there are no tax concessions, the formula is Assessable Income minus Allowable Deductions = Taxable Income
The rubbish is coming from you, the tax concessions were fully explained in the video, FFS
@@FuIhat You have displayed a very poor ability to put 2 and 2 together just like those who want to eliminate negative gearing which will put a lot of investors off making more housing available and inevitably result in less housing and therefore higher rental costs..
Show any model that has resulted in anything opposite if you can. - But you won't.
Most of these people including Greg Jericho are too financially illiterate to realise that reducing negative gearing will result in less investment into property and therefore less property to rent which will drive up rental costs. They are the worst enemy of the people they pretend to be able to benefit.
Jericho is only interested in his personal benefit of supporting the Green Party policies which masquerades as the Australia Institute.
A lot of mum a dad investor's use negative gearing,take it away and people will look for another investment and less properties will be built,the greens have got this wrong no surprise here.
All losses are tax-deductible... from property investments, shares, businesses, crypto, etc. All gains are taxable from ANY asset class. The government does not and can not afford to build all homes for renters. Without investors, the current rental crisis will be much WORSE! The current system is very fair. If it was too generous, all of you readers would own more than 10 investment properties.
People buy investment houses to make capital gains over the long term , not to reduce the tax they pay .
then remove the tax deductions and they'll continue to buy. Your argument in every other thread here is that without NG there wont be homes but here your stand alone point negates that.
@Tasmantor NGing makes the purchase easier obviously but CG is the main game .
@@Tasmantor Without NGing the numbers won't stack up for many potential investors which will result in a reduction in the amount of rentals available .
Politicians and the media need a lesson in basic economics. Remove negative gearing landlords that are negative will sell up. Given current demand housing prices won't fall, but rents will explode. There was a reason why it was reinstated after its removal in the 80s.
Weird how in places around the world with economies comparable to our own that don't have NG have cheaper rent then isn't it?
When all think alike, then no one is thinking.
There is more to negative gearing than the simplistic view presented in this show. The so called experts on the show are either naive or simply out to mislead their audience. People should realise that, apart from a raft of unintended consequences (e.g govt losing capacity to collect any CGT when an investment property is sold), if you get rid of negative gearing, it is only a matter of time before profit from the sale on your PPOR becomes taxable.
Be careful what you wish or advocate for.
Politicians are in it for themselves.
It is almost inconceivable that they's support policies that would disadvantage themselves.
Pay cuts, shorter terms, individual unilateral voting.
Who in their right mind is going out to buy a property just to lose money on to reduce their taxes? Come on what a stupid remark. Every other investment is eligible for tax losses why should properties be any different? Let's be honest, negative gearing is not the reason for housing shortages. Its been around since the 1930s why is it suddenly now an issue? The issue is that the Australian government does not have a forward-looking plan for housing. Australia is always very reactive. Only when there is a problem, then they begin to try to fix it but by that time it's already too late, and the problem will be compounded.
What a rubbish source for information the project is.
They make false statements and don't focus on anything where they think the government is losing money. The reality is the treasury does not lose money from negative gearing.
If people could not negatively gear there would be less investment in housing meaning less housing and fewer number of properties would be in existence to sell so the treasury would get less capital gain tax when fewer of the properties were eventually sold at capital gain.
But those like Greg Jericho and Matt Chandler Mather are too short sighted and financially challenged to be able to understand that.
The financially very illiterate who support reduction of or abolition of negative gearing can't see that reduction of investment into housing will mean fewer houses for sale or rent since there will be less money invested in maintenance or existing or building of new housing.
It is all stupid financial thinking but supported by bad thinking of the economists of organisations like The Australia Institute (A Greens political policy organisation) and vocalised by Greens candidate Max Chandler-Mather and his band of financially and economically challenged.
Their insane financial understanding and policy is they basic reason they have this policy of less investment means more production which something that has never existed in the real world and can’t and never will.
Greg Jericho is so judgmental and incorrect with he's statements. He said, "the only reason they are doing that (meaning purchasing a rental property) is so they can reduce their taxable income" . He makes out like everyone with a property is stupid. Who would purchase an investment with the intent to loose money so you can reduce your tax bill? It is one asset class to invest in where you can leverage to manage a larger asset. You can do it with shares, borrow money to buy more share and you can offset the interest expense against the income the shares generate. This is only getting airplay, because govt has done a crap job of providing enough public housing, then invited so many immigrants in without anywhere to house them. It will have a negative effect on the current housing supply and rents will only increase ...... because there is just not enough supply. I'm thankful the tax system is where it is, otherwise I wouldn't have a place to rent or would be competing for even fewer options to rent.
Should start calling that Murray What bloke captain BS.
Welcome to the poor government in oz! Hard working tax payers pay the rich!
I’ve never heard of “nego-gearo”, & I’m an Aussie & older than that goose called Nick who didn’t explain it well at all. If you want to listen to the Greens (aka “watermelons”), we’re totally stuffed as a nation & the economy will shrink along with opportunities. Investment properties are an independent income stream & a self-funded superannuation method. If this government wants to change this along with the other “super” changes, & the Stage 3, then we live in a country that you can make plans based on taxation stability. Typically this show refers-to or talks to lefty shit-canners. “Greg” most investors are not rich, if you didn’t have negative gearing you would have broad-based investment in property. Enough of these SJW’s I bet each of them on the panel has an investment property. An investment property is one of the few ways, excepting hard work, where normal working people can get ahead, take that away, what’s left ? The share market? Heaven knows removing the stage 3 tax changes means there’s less incentive to work harder, bracket creep will remain especially in a high inflationary market, then say add IR changes will strain employee/employer relations to the detriment of productivity - to make it a potential criminal offense to receive a call after work hours (bridling businesses say calling staff for change of shift or overtime etc) - it’s all crimping the potential to get ahead. What’s next death taxes?
The tale of loose colonization
Another stupid incorrect statement from Jericho who it seems has done no resaech on the subject but says " we are talking about a sort of finite nember of houses in Australia". Total B.S. which defies reality. The available stats indicate 137 houses were built in the past year to 2023 and on track for over 150,000 for 2024. There is no finite number.
It’s a moot point.
Negative gearing is the third rail of Australian politics.
Look elsewhere to improve Australia.
Pointless waste of timing hoping it’ll go away.
I think we need real data to support these accusations….
Absolute prejudiced blackmail..against their own people .how familiar
Get rid of it! Its just the greedy getting greedier
Negative gearing is shit. Having a property portfolio is a small business. Who in the right mind would purposely go into business at a a loss? Terrible
Plan
Dumb logic. Neg gearing was brought in to increase rental housing....it lasts only a few years as houses become positive geared.
Supply is the problem.
Odd how supply is the problem when we are building record numbers of new dwellings. I'm sure you, regurgitating tired talking points from the landlord lobby, are just as informed as a guy who's job is looking into the housing market and reporting on it.
As a member of a family of investors I think it's the only way Australians can make money
negative gearing increases the housing supply. The Gov could never build enough houses as individual investors. They dropped in in 1989 and created a huge price increase and shortage, they dropped it immediately. The Greg guy is lying. people invest in houses to make money, not to avoid tax. The negative gearing is not huge, but the profit from capital growth is.