Saying "No keep it as it is" was the most popular option (with 34%) is a bit deceptive because it was the only "no" option. 3 of the 4 options in the poll are "yes" meaning 66% of the voters in the poll actually do want changes to the policy, they're just split on what changes to implement.
Well...this is what happens when you treat housing as a speculative asset/investment rather than a human right. What makes things worse is people seeing their house price going through the roof and thinking that (a) it's normal; and (b) it's good. As long as the populace at large think this way, the problem will remain for decades to come and prices will never come down. It will get to the point where people won't be able to buy a house unless they're born rich or their parents already have assets (well...happening already, right?)
The key point as you mention is not negative gearing alone but in combination with the CGT exemption. If we remove at least one of these two, whichever of the two, it will have the desired effect of reducing investor-driven demand, bringing down house prices and bringing down rents. There are also many other leavers that the government needs to pull in addition to negative gearing and CGT discounts, like increasing social housing and balancing migration with housing construction.
This is absolutely correct. The other change that should happen independently of the above is that depreciation of the property shouldn't be deductible off your income, but should instead add to the cost-base of the property upon sale.
isn't the whole purpose of negative gearing to encourage investors to create more housing? i would have thought the best reform to negative gearing would be to restrict it to new housing. can someone tell me why this is wrong?
Nah. It incentivise bad business practice. You invest in property to make a lost so you can pay less tax on you personal income. If you wanna encourage more property building gôn in to property development.
There is a problem with the lie always told around the removal of negative gearing. That rents would rise to meet the shortfall. The reality is that landlords already have their rent as high as the market will bear. In fact right now the rental increases have overshot the market and renters are pulling out in the sense that they are actively seeking any alternative for housing than the rental market. The only factor allowing the current rental prices to be accepted is mass immigration driving demand beyond what the market can supplt with housing growth (new builds). Rents can only go up to the limit to which people are willing and able to pay them and currently we've already passed that point. We're at the point of market failure.
For every renter who can't or wont pay increased rent there are 10 immigrants to take their place. The inflows of people far exceeds the number of dwellings being built.
Nobody will make it. If our skilled workers can't afford to rent. Good luck to people that can't speak English well. We also import oversea shoddy business practices when we import people with so little standards.
As a property investor with negatively geared property, the argument about how investors would simply jack up the rent if negative gearing is taken away is bs. It’s not like we can just jack up rent at our will. If we can we'd do it now regardless of negative gearing policy. If negative gearing is taken away, logical thing to do is to sell the property. Depend on how much $$ you are losing obviously & weighing that against the price growth rate.
The tax benefits from negative gearing used to largely zero out when full CGT was paid on sale of the property. It’s the 50% CGT discount that needs to go.
Yep NG is fine if it's a deferment mechanism, it's when you double dip on tax incentives combined with the inherent leverage of property that makes outsides gains vs capital
Same old rents go up argument. We saw this didn't happen when NG was repealed in the 80s there are two economic actors in a rental agreement and it needs the renter to be able to afford the amount of rent and so that's why rents aren't twice what they are now because there is an economic equilibrium point where the renter can afford to pay what the landlord wants them to pay. We don't have philanthropic landlords now, we have a rent level that the market can take. Whether or not rents go up depends on the elasticity of the demand that is there and we have seen when it actually happened it's fairly inelastic.
The only way to reduce housing cost is to remove government fees and stamp duty, decrease cost of energy, stop selling to overseas/out of state buyers, remove capital gains tax on housing, stop giving cash incentives to people buying/building.
it will lead to less building. jacking the prices up. as an investor I support your strategy. My property will just skyrocket. You can only lower prices with more builds and less regulation and looser planing laws. But I dont want that as I'm an investor.
@@sal78sal they literally tried to over build during/after covid. Cost of materials skyrocketed for multiple reasons and houses climbed 80%. Removing CGT and government fees keeps the wealth in the pockets of the owners. Prices are way over inflated at the moment. I have 3 properties and i understand as an investor that I'm playing in a market and the market is currently rigged.
Policy realistic pathway that incentives a supply outcome, not a financialisation: NG and CGT restricted to new builds, removed on future existing builds, existing held builds can continue NG but is deducted against capital gains tax discount.
The real solution that would fix rents by actually increasing housing supply (and thus taper home prices) is to only allow negative gearing on new builds. This combined with a progressive reduction on the tax benefit on existing properties is the most sophisticated solution. Let's be real, if you are buying a 40 year old home as an investment, it is not for the greater good of society. The government is simply subsiding a bad decision. The government should only subside those that are contributing positively to society.
This would allow builders to increase their profit margins (sucks) but should reduce bankruptcies as a new build is effectively more valuable than an existing build. And in the video, saying that we are already building the second most in the OCED is a mute point as our immigration per capita is also so high. Not to mention the proportion of houses vs apartments in Australia vs other OCED countries.
providing rental accomodation is providing something. The guy renting wont suddenly be able to get. a loan to buy. There is a reason he is renting. You cant make the poor suddenly rich with a tax policy.
@@sal78sal well yes , obviously. But there are two cases that can happen when NG is abolished as above, one, the 40% of landlords with NG properties rush to sell which would increase housing supply by 10 or not 50 fold and crash the market (unlikely but probable as a long term outcome). Or NG landlords just have to deal with it (likely). They can't just jack rents as if you could they already would have maxed them out. Anymore and their property would be vacant.
The elephant in the room is the PPOR CGT and pension/dole exemptions, particularly combined with stamp duty that discourages downsizing. Pensioners in Bondi with health care cards…
install PPOR capital gains tax and you just see less selling. More properties will go into names of perpetual trusts or companies that will see the property never sold, and capital gains never realised. the poor Weill never be able to buy in Bondi, no matter what you do.
so increase taxes when you want more of something. A tax on cigarettes will cause more smokers, a tax on property will create more properties? does that sound right?
No. The introduction of Negative Gearing was not about increasing supply in the market. If you want to increase supply - it;s not for the people who benefit from Negative Gearing ie. the super rich. Social Housing should be invested in so we can have affordable places to live/buy. Removing Negative Gearing will no increase the value of rent. The opportunity cost will reduce - and people will invest in other markets.. Rental prices can only go up a certain amount, like inflation, where the cost of buying a property - which supply will allow - means it cheaper to buy than rent.. Come on guys, kids with economic 101 tafe degrees have better rationality
you will destimulate investment in housing and you will get less housing, jacking up prices. As an investor I dont care what govemrnet does. The only way you will lower the price of my investment is looser zoning policy. Loose zoning is the only thing I fear as an investor.
Increase tenant’s rights, crackdown on slum lords, minimum standards of property types. Owners will sell rather than make the properties they rent livable
In Short YES , Look at all countries around the world that does not have a Housing Tax Policy Like Negative Gearing and you will see prices rise with inflation over time, Houses are not Stocks or a Speculative Asset it is a Place for people to live in at the moment its being treated like a Speculative Asset many properties sitting empty waiting for Capital Growth instead of being rented out.
You can scrap negative gearing and the investors will just set up an ABN and and a partnership with their spouse and claim the loss of the investment property against their wage. The tax laws inable the same results using a different tool all the time.
@@sal78salyeah, I know . What I meant say is additional land tax on investment property on top of the tax. The purpose is to add holding cost and discourage speculation
Australia gives permanent residence visas out and they are eligible for first home buyers grant straight away. We are literally bringing people in and giving them money to buy real estate. ABC did tell me supply and demand doesnt have any effect on prices though........ 😂
You won't have to scrap neg gearing as it will implode. Watch taxation go, and not far away. There is so much land here, that will be released too. Hate to bust ur bubble.... greed is on its way out. Lots of sleepy folk.
LOL you poll a subset of your viewers, those that watch a property podcast and are trying to say they are representative of the entirety of the country...
How about we discourage residential housing from speculative investment? And encourage investment in things that actually produce something, and something beneficial and progressive for the future of Australian citizens. Housing is a social requirement and expectation in Aus (most Australians expect to be able to put a roof over our heads), and should be treated a bit like Health, Police, Ambos. But we would never speculate to profit on the Ambulance service, for example. Why not encourage away from this never naturally profitable impossible bubble(housing ponzi as you state yourselves), and encourage investment in new tech, start ups, small business, AI, or if you are so sucked into the real estate market invest in new building technologies, or builders transforming the way houses are built. Does anyone who invests in real estate see this as a betterment to Australian Society?
Stop thinking like commies. Housing prices are affected by demand and by inflation. When you are importing more people than there are available houses, when people who do not operate in the same playing field overseas are allowed to compete with Australians for homes, and when government spending is out of control, housing is not only unaffordable but so is everything else, not to mention the strain it puts on all services. The core problems here is unchecked mass immigration, foreign land ownership, and government spending. The problem is not letting people keep more of their hard-earned money through tax right-offs, something every big corporation buddy of labor takes full advantage of.
Rental crisis started immediately after covid in early 2021, there was not many pr returning, strict border and definitely no mass immigration. In fact all of what you mentioned has only worsen the issue. The issue mainly caused by corrupted scomo government and his cronies giving handouts to big corp, RBA lending billions to commercial banks at 0.1 3 years fixed rate loan then paying back at 2 - 4%. These two factors hugely inflated purchasing power of certain people. Well of course, those are debts borrowed from the future of all Australian taxpayers which can only be fixed by having more people for government to collect tax. Well, as no laws is going to hold both rba and gov officials accountable so yeah no point discussing anyway 😂
-restrict NG to only new builds -CGT discount scrap and only exempt on PPOR and if you only own it for longer than 2 years you have to pay CGT to try and curb flippers. -tax our minerals and resources and get royalties from these thieves and then we can build more public housing.
Ahahaha 😂 you can’t run a poll to your audience of properly investors or would be investors and expect majority to can nego gearo. I’m 45 and now really worried about my kid’s future. If the average home 16 times your yearly income now what will it be in 10 years ? A few years ago it meant moving out from the cbd . But now thanks to us investors every coastal town has been blown out . Leaving the locals homeless for the upper middle and wealthy to have airbnbs .
Removing negative gearing will instantly increase rents. if its going to be positively geared, half the 'profits' will be taxed so rental income from properties will be raised to account for it. When the government and media is wholeheartedly pushing something... its almost guaranteed to harm citizens
it will harm people. thats for sure. It will increase rents and porperty prices as less properties will get built. Zoning will reduce prices. red tape and building standards will reduce prices. but who wants reduced prices? who wants their biggest asset to reduce in price?
You didn't include the MOST effective option to ramp up SUPPLY!!!! ATO tax incentives for NEW HOME Investors ONLY $$$ Only game in town....watch how quickly investors of all persuasions PIVOT and NEW HOMES sprout out of the SOIL 🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘
Saying "No keep it as it is" was the most popular option (with 34%) is a bit deceptive because it was the only "no" option. 3 of the 4 options in the poll are "yes" meaning 66% of the voters in the poll actually do want changes to the policy, they're just split on what changes to implement.
Exactly, 66% said reform negative gearing in some way
Well...this is what happens when you treat housing as a speculative asset/investment rather than a human right. What makes things worse is people seeing their house price going through the roof and thinking that (a) it's normal; and (b) it's good. As long as the populace at large think this way, the problem will remain for decades to come and prices will never come down. It will get to the point where people won't be able to buy a house unless they're born rich or their parents already have assets (well...happening already, right?)
Yes
The key point as you mention is not negative gearing alone but in combination with the CGT exemption. If we remove at least one of these two, whichever of the two, it will have the desired effect of reducing investor-driven demand, bringing down house prices and bringing down rents. There are also many other leavers that the government needs to pull in addition to negative gearing and CGT discounts, like increasing social housing and balancing migration with housing construction.
This is absolutely correct. The other change that should happen independently of the above is that depreciation of the property shouldn't be deductible off your income, but should instead add to the cost-base of the property upon sale.
when you ahem less demand from investors you will get less building.
isn't the whole purpose of negative gearing to encourage investors to create more housing? i would have thought the best reform to negative gearing would be to restrict it to new housing. can someone tell me why this is wrong?
It isn't wrong
Nah. It incentivise bad business practice. You invest in property to make a lost so you can pay less tax on you personal income. If you wanna encourage more property building gôn in to property development.
100% agree, then any negative gearing accrued to be accrued against any future capital gains tax discounts
There is a problem with the lie always told around the removal of negative gearing. That rents would rise to meet the shortfall. The reality is that landlords already have their rent as high as the market will bear. In fact right now the rental increases have overshot the market and renters are pulling out in the sense that they are actively seeking any alternative for housing than the rental market. The only factor allowing the current rental prices to be accepted is mass immigration driving demand beyond what the market can supplt with housing growth (new builds). Rents can only go up to the limit to which people are willing and able to pay them and currently we've already passed that point. We're at the point of market failure.
For every renter who can't or wont pay increased rent there are 10 immigrants to take their place. The inflows of people far exceeds the number of dwellings being built.
Nobody will make it. If our skilled workers can't afford to rent. Good luck to people that can't speak English well. We also import oversea shoddy business practices when we import people with so little standards.
As a property investor with negatively geared property, the argument about how investors would simply jack up the rent if negative gearing is taken away is bs. It’s not like we can just jack up rent at our will. If we can we'd do it now regardless of negative gearing policy. If negative gearing is taken away, logical thing to do is to sell the property. Depend on how much $$ you are losing obviously & weighing that against the price growth rate.
true, but whatever they do rents and properties will go up.
@@sal78salproperties would go down and rents up as investors leave and first home buyers get in
2:25 Do you think there is a chance they might sell it? And put it into alternative assets?
no way.
Great chat guys.
I feel I have a much better understanding of the associated issues. Thanks
The tax benefits from negative gearing used to largely zero out when full CGT was paid on sale of the property. It’s the 50% CGT discount that needs to go.
Yep NG is fine if it's a deferment mechanism, it's when you double dip on tax incentives combined with the inherent leverage of property that makes outsides gains vs capital
Same old rents go up argument. We saw this didn't happen when NG was repealed in the 80s there are two economic actors in a rental agreement and it needs the renter to be able to afford the amount of rent and so that's why rents aren't twice what they are now because there is an economic equilibrium point where the renter can afford to pay what the landlord wants them to pay. We don't have philanthropic landlords now, we have a rent level that the market can take. Whether or not rents go up depends on the elasticity of the demand that is there and we have seen when it actually happened it's fairly inelastic.
Get rid of negative gearing and at same time lower income TAX
The only way to reduce housing cost is to remove government fees and stamp duty, decrease cost of energy, stop selling to overseas/out of state buyers, remove capital gains tax on housing, stop giving cash incentives to people buying/building.
it will lead to less building. jacking the prices up. as an investor I support your strategy. My property will just skyrocket. You can only lower prices with more builds and less regulation and looser planing laws. But I dont want that as I'm an investor.
@@sal78sal they literally tried to over build during/after covid. Cost of materials skyrocketed for multiple reasons and houses climbed 80%. Removing CGT and government fees keeps the wealth in the pockets of the owners. Prices are way over inflated at the moment. I have 3 properties and i understand as an investor that I'm playing in a market and the market is currently rigged.
Policy realistic pathway that incentives a supply outcome, not a financialisation: NG and CGT restricted to new builds, removed on future existing builds, existing held builds can continue NG but is deducted against capital gains tax discount.
The real solution that would fix rents by actually increasing housing supply (and thus taper home prices) is to only allow negative gearing on new builds. This combined with a progressive reduction on the tax benefit on existing properties is the most sophisticated solution. Let's be real, if you are buying a 40 year old home as an investment, it is not for the greater good of society. The government is simply subsiding a bad decision. The government should only subside those that are contributing positively to society.
This would allow builders to increase their profit margins (sucks) but should reduce bankruptcies as a new build is effectively more valuable than an existing build. And in the video, saying that we are already building the second most in the OCED is a mute point as our immigration per capita is also so high. Not to mention the proportion of houses vs apartments in Australia vs other OCED countries.
providing rental accomodation is providing something. The guy renting wont suddenly be able to get. a loan to buy. There is a reason he is renting. You cant make the poor suddenly rich with a tax policy.
@@sal78sal well yes , obviously. But there are two cases that can happen when NG is abolished as above, one, the 40% of landlords with NG properties rush to sell which would increase housing supply by 10 or not 50 fold and crash the market (unlikely but probable as a long term outcome). Or NG landlords just have to deal with it (likely). They can't just jack rents as if you could they already would have maxed them out. Anymore and their property would be vacant.
The elephant in the room is the PPOR CGT and pension/dole exemptions, particularly combined with stamp duty that discourages downsizing. Pensioners in Bondi with health care cards…
install PPOR capital gains tax and you just see less selling. More properties will go into names of perpetual trusts or companies that will see the property never sold, and capital gains never realised. the poor Weill never be able to buy in Bondi, no matter what you do.
so increase taxes when you want more of something. A tax on cigarettes will cause more smokers, a tax on property will create more properties? does that sound right?
No.
The introduction of Negative Gearing was not about increasing supply in the market. If you want to increase supply - it;s not for the people who benefit from Negative Gearing ie. the super rich. Social Housing should be invested in so we can have affordable places to live/buy.
Removing Negative Gearing will no increase the value of rent. The opportunity cost will reduce - and people will invest in other markets.. Rental prices can only go up a certain amount, like inflation, where the cost of buying a property - which supply will allow - means it cheaper to buy than rent..
Come on guys, kids with economic 101 tafe degrees have better rationality
you will destimulate investment in housing and you will get less housing, jacking up prices. As an investor I dont care what govemrnet does. The only way you will lower the price of my investment is looser zoning policy. Loose zoning is the only thing I fear as an investor.
survey results arent valid, fun to discuss, but you need unbiased sampling
Australia is fucked!!!!
It's not. Big changes around the corner .
australa îs fine. the poeple are fucked.
Increase tenant’s rights, crackdown on slum lords, minimum standards of property types. Owners will sell rather than make the properties they rent livable
In Short YES , Look at all countries around the world that does not have a Housing Tax Policy Like Negative Gearing and you will see prices rise with inflation over time, Houses are not Stocks or a Speculative Asset it is a Place for people to live in at the moment its being treated like a Speculative Asset many properties sitting empty waiting for Capital Growth instead of being rented out.
Are you able to make this a little louder. Love your content but its quite quiet
You can scrap negative gearing and the investors will just set up an ABN and and a partnership with their spouse and claim the loss of the investment property against their wage.
The tax laws inable the same results using a different tool all the time.
Land tax for investment property is better. And different rate based on the number of investment property
we have this now
@@sal78salyeah, I know . What I meant say is additional land tax on investment property on top of the tax. The purpose is to add holding cost and discourage speculation
@@ryanhuang3875 it will just lead to less building.
Are you guys crazy, you think the solution is more tax? How about government spending and the governments over reliance on property
Australia gives permanent residence visas out and they are eligible for first home buyers grant straight away. We are literally bringing people in and giving them money to buy real estate. ABC did tell me supply and demand doesnt have any effect on prices though........ 😂
Defo scrap it!
You won't have to scrap neg gearing as it will implode.
Watch taxation go, and not far away.
There is so much land here, that will be released too.
Hate to bust ur bubble.... greed is on its way out. Lots of sleepy folk.
LOL you poll a subset of your viewers, those that watch a property podcast and are trying to say they are representative of the entirety of the country...
How about we discourage residential housing from speculative investment? And encourage investment in things that actually produce something, and something beneficial and progressive for the future of Australian citizens. Housing is a social requirement and expectation in Aus (most Australians expect to be able to put a roof over our heads), and should be treated a bit like Health, Police, Ambos. But we would never speculate to profit on the Ambulance service, for example.
Why not encourage away from this never naturally profitable impossible bubble(housing ponzi as you state yourselves), and encourage investment in new tech, start ups, small business, AI, or if you are so sucked into the real estate market invest in new building technologies, or builders transforming the way houses are built.
Does anyone who invests in real estate see this as a betterment to Australian Society?
property provides a service.
@@sal78sal I disagree, a service is an action performed by an individual or group of individuals. It would be like saying a table is a service.
Stop thinking like commies. Housing prices are affected by demand and by inflation. When you are importing more people than there are available houses, when people who do not operate in the same playing field overseas are allowed to compete with Australians for homes, and when government spending is out of control, housing is not only unaffordable but so is everything else, not to mention the strain it puts on all services. The core problems here is unchecked mass immigration, foreign land ownership, and government spending. The problem is not letting people keep more of their hard-earned money through tax right-offs, something every big corporation buddy of labor takes full advantage of.
Rental crisis started immediately after covid in early 2021, there was not many pr returning, strict border and definitely no mass immigration. In fact all of what you mentioned has only worsen the issue. The issue mainly caused by corrupted scomo government and his cronies giving handouts to big corp, RBA lending billions to commercial banks at 0.1 3 years fixed rate loan then paying back at 2 - 4%. These two factors hugely inflated purchasing power of certain people. Well of course, those are debts borrowed from the future of all Australian taxpayers which can only be fixed by having more people for government to collect tax. Well, as no laws is going to hold both rba and gov officials accountable so yeah no point discussing anyway 😂
You guys really need to monitor your audio levels. Why is this so quiet?
If people can not negative gear property. They will negative gear another business.
No, we will positively gear our properties and take the tax on profits into account and lift rents accordingly
Good, more people should be building businesses rather than specufesting
@@robbies789 property is a business.
I don't even use negative gearing. I have positively geared property.
-restrict NG to only new builds
-CGT discount scrap and only exempt on PPOR and if you only own it for longer than 2 years you have to pay CGT to try and curb flippers.
-tax our minerals and resources and get royalties from these thieves and then we can build more public housing.
Ahahaha 😂 you can’t run a poll to your audience of properly investors or would be investors and expect majority to can nego gearo.
I’m 45 and now really worried about my kid’s future. If the average home 16 times your yearly income now what will it be in 10 years ?
A few years ago it meant moving out from the cbd .
But now thanks to us investors every coastal town has been blown out .
Leaving the locals homeless for the upper middle and wealthy to have airbnbs .
Scrap government
Removing negative gearing will instantly increase rents. if its going to be positively geared, half the 'profits' will be taxed so rental income from properties will be raised to account for it.
When the government and media is wholeheartedly pushing something... its almost guaranteed to harm citizens
just stop rampant immigration levels
it will harm people. thats for sure. It will increase rents and porperty prices as less properties will get built. Zoning will reduce prices. red tape and building standards will reduce prices. but who wants reduced prices? who wants their biggest asset to reduce in price?
This is not your fear mate, be honest… you fear asset devaluation. Come on 😂
@@ASXStockPicking everyone who owns any property fears this. And no one will vote to be poor
@@sal78sal i wish this was true
You didn't include the MOST effective option to ramp up SUPPLY!!!! ATO tax incentives for NEW HOME Investors ONLY $$$ Only game in town....watch how quickly investors of all persuasions PIVOT and NEW HOMES sprout out of the SOIL 🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘🏘