33% Property Tax. Would it work here ?

[buggerlugs]

http://www.news.com.au/finance/super...-1227359029212
Only being used on houses that are not the owner's main residence. Interesting..................

[Spinner77]

Well there is already a 50 to 60 per cent tax on the incomes of young couples buying a home. It's called a mortgage.

Add that to their income tax, and you get something like an 80 per cent tax bite.

The only difference between the two is that the big one is levied by the banks. This is part of a far-sighted policy to assist their earnings. If housing prices were lower, the banks would not make as much money. We could never let that happen, I'm sure you will agree.

Someone from South America told me that there are places there where the army levies a tax of its own. I told him he should feel right at home in Oz, except here the banks had the privilege.

You can buy a three-bedroom apartment in the middle of central Berlin for 454,000 euros, about A$650,000. I hear that when the German real estate market looks like getting out of control, their government intervenes.

No wonder Germany is an economic basket case. It is .. isn't it? Has to be ...

[buggerlugs]

Well they reckon the Prime Minister in NZ has turned the economy around over there and they haven't had a mining boom or bust. Some of our NZ members would have more info on how things are going I'd reckon.........

[Franco Cozzo]

I believe both sides of Government (regardless of your chosen team) have shot themselves in both their feet IMO.

They have both played up along the lines of no extra taxes, who ever tries to increase taxes on anyone who votes will get turfed out.

[buggerlugs]

Might be trying to stop this..................
http://www.news.com.au/finance/real-...-1227358711357

[xtremerus]

Don't we already have CGT that apply to investment properties in Australia?
Seems a similar thing.

[MAGPIE]

If it slows up the foreign property speculators I'm all for it, they should have gone further in my opinion.

[GREGL]

Originally Posted by xtremerus

Don't we already have CGT that apply to investment properties in Australia?
Seems a similar thing.

Capital gains tax is based on selling within a 12 month period, or it used to be .Investors are land banking/developing so 12 months is nothing, 1 years rates and if moneys tight they rent it out in the meantime .
2 years isn't going to make much difference here.
As for the original article, ummmm it did stipulate second property, so me thinks the concern of good old uni professor is as usual a little out of touch with reality !

[Raptor]

Just getting rid of negative gearing would be a good start. You shouldn't be able to claim deductions against anything other than the investment itself IMHO.

Australian property prices are nuts.


.

[Yellow_Festiva]

Originally Posted by GREGL

Capital gains tax is based on selling within a 12 month period, or it used to be .Investors are land banking/developing so 12 months is nothing, 1 years rates and if moneys tight they rent it out in the meantime .
2 years isn't going to make much difference here.
As for the original article, ummmm it did stipulate second property, so me thinks the concern of good old uni professor is as usual a little out of touch with reality !

CGT is paid upon selling an investment property purchased after a certain date (86?). Selling after 12 months gets you a 50% discount.

However I'm not an accountant.

[ebxr8240]

Based on what you earn in that year .. So sell them when or after you retire ..
Or just keep the rent coming in
BTW the gov doesn't have enough low income homes now ...
Plus negative gearing doesn't go on forever ..
NZ doesn't have CGT ...

[GREGL]

It makes sense then, something put in place to keep housing affordable for the local population . You know the ones that actually contribute to the local economy . Good on them for putting it forward .

[nuthin' fancy]

The problem is the conflict between what governments get from property transfers (i.e. stamp duty, the more you spend the more money that goes to government) and the any act by government to dampen the market which will cost them future revenue.

Negative gearing has had its day and should be stopped.

The use of the various Housing Commissions from the 1950s to the 1980s that gave all participants an opportunity to buy is a model worth revisiting.

[GT0132]

Originally Posted by nuthin' fancy

The problem is the conflict between what governments get from property transfers (i.e. stamp duty, the more you spend the more money that goes to government) and the any act by government to dampen the market which will cost them future revenue.

Negative gearing has had its day and should be stopped.

The use of the various Housing Commissions from the 1950s to the 1980s that gave all participants an opportunity to buy is a model worth revisiting.

The thinking behind the policy John Key has introduced is not a bad one but I wonder about the impact it will have. It's a watered down capital gains tax, the liability of which is removed if you keep a property over 2 years. All it will encourage investors to do is keep a property for 2 years if they were otherwise thinking of selling earlier and save 33% in the process. Probably better to simply bring on a CGT system like we have here , unless Auckland's property spiral stems in most part from investors buying and selling quickly to make a quick buck - a problem which his policy would likely combat effectively.

RE: Negative gearing. In the current environment where you have (1) banks willing to lend only up to 80% of market value without LMI (2) record low interest rates, and (3) high rents, I hazzard a guess that most property investors would be positively geared at present so any attempt to abolish, or water down, negative gearing would have minimal effect on house prices, let alone curb investment, in my view.

[Yellow_Festiva]

Second bit is spot on IMO.

[Stefan]

Originally Posted by Raptor

Just getting rid of negative gearing would be a good start. You shouldn't be able to claim deductions against anything other than the investment itself IMHO.

Australian property prices are nuts.

.

Why disadvantage buyers further? Neg gearing is a good way to get in the market when young and living at home. When I bought my first house I could not afford to live in it but with negative gearing was able to afford it.

The answer is easy, ban property purchases by anyone other than a permanent resident or citizen.

Won't happen though easier to bend over our own people than to upset the cash cow that is china

[BIONIC MAN]

Nothing wrong with neg gearing.
IMO we can't have capital gains tax, without allowing you to claim interest costs thru neg gearing.
It would be unfair to tax you on gains, if you can't also claim the costs.. Much like any business really.

[2011G6E]

*Sigh*...
It almost brings me to tears of anger to see people getting sucked in by the government (any government, Labor or Liberal) propaganda that they're "only attacking those rich people".

Lately we have also seen a push to restrict and change the superannuation taxing and entitlements of "the rich", ignoring the fact that the number of wage earners making the millions is absolutely tiny.
They talk of imposing extra taxes and charges and restricting entitlements of these "rich superannuation account holders". People cheered...they fist pumped the air and said "Yay! Tax those rich ******!!!!".

One little point...
Governments of all persuasions have, for decades, wanted to get their greedy mitts on our super funds.

Once they get their foot in the door with changes for "the rich", then what's to stop them "broadening the scope" later on to include everyone...?

Negative gearing? I know several people who only own rental properties for the tax advantages. Take them away and they have said they'll just sell the houses/units and be done with it.
Then what do people renting those properties do...?

Be careful what you wish for...

[GREGL]

" Sigh"
From what I can gather the boom in housing prices has a LOT to do with investors . In the days of 18% interest rates there were as many rental properties available as there is now and a helluva lot more boarding houses and housing commission to choose from too .
Defaults surprisely were quite low . Any significant rise in rates is going to screw a significant number of people. How many local people actually own rental property in places like Blackwater where if you as a local don't work in the mining industry or some such high paid job . Must be a tough gig paying 600 a week because some out of town negative geared yuppie **** wants to profit on something in a town they wouldn't even have heard of .

[ebxr8240]

It's mainly in the cities where prices have gone up.. Even then they are still affordable on the fringes.. People pay to live in CBDs .. Even if they rent.. It's all about f
Lifestyle these days. MUST live in certain areas..
Btw last time negative gearing wasn't claimable..
Rents went up big time due to landlords selling ..

[b0son]

Originally Posted by BIONIC MAN

Nothing wrong with neg gearing.
IMO we can't have capital gains tax, without allowing you to claim interest costs thru neg gearing.
It would be unfair to tax you on gains, if you can't also claim the costs.. Much like any business really.

Nothing wrong with claiming costs. The issue is negative gearing allows you to claim them against your regular income, such that if they exceed your investment income, they reduce your tax on your regular income.

You cant do this with a capital loss, so why should you with the incidental costs? The loss for each year should carry forward, and you deduct it from your capital gain at the end.

[ebxr8240]

It's not all bad.. Let's face it these people will not claim any pensions ..
I am amassed the amount of people who don't have any super etc ..
Yet they have had good paying jobs ..
To anyone here saying prices are too high ..
Where are you wanting to buy yourselfe and how much deposit ?
In most cases first home buyers can afford 25 to 45 klrs from CBDs..
It has pretty much been that way for years..

[Stefan]

Originally Posted by b0son

Nothing wrong with claiming costs. The issue is negative gearing allows you to claim them against your regular income, such that if they exceed your investment income, they reduce your tax on your regular income.

You cant do this with a capital loss, so why should you with the incidental costs? The loss for each year should carry forward, and you deduct it from your capital gain at the end.

Ignore CGT, that completely different

Govco can't make me pay tax on rent as it is part of my income if I cant claim expenses I incur in order to generate the rent and income.

How will that work? I pay tax on the rent I get but the real estate agent fees i need to pay come out of my after tax income.

[b0son]

No, simply that when your NET income for your rental is a loss, you carry the LOSS forward until there's a gain, much as you do with capital gains.

[chevypower]

That would be one way of deflating property prices. There wouldn't be as many homes available for rent, but with the lower property prices, more people would be able to afford to buy one.

[Stefan]

Might help, but property being a solid long term investment I'm not certain the impact would be huge.

Government I'm sure are quite happy the get the stamp duty winfall that comes along with a property boom.

[ebxr8240]

Plus local gov (NSW) property tax.. Greedy barstards..

[2011G6E]

Originally Posted by GREGL

" Sigh"
From what I can gather the boom in housing prices has a LOT to do with investors . In the days of 18% interest rates there were as many rental properties available as there is now and a helluva lot more boarding houses and housing commission to choose from too .
Defaults surprisely were quite low . Any significant rise in rates is going to screw a significant number of people. How many local people actually own rental property in places like Blackwater where if you as a local don't work in the mining industry or some such high paid job . Must be a tough gig paying 600 a week because some out of town negative geared yuppie **** wants to profit on something in a town they wouldn't even have heard of .

It's collapsed in Blackwater and the entire surrounding area...houses that were selling only a year or two back for anything up to a just under a million bucks ("normal" price for a three bedder tired old place was over $400,000) are now unsalable for $250,000 or less. Rents that were between $600 and $2000 a week are now sitting empty and asking between $180 and $300 a week.
Think of the investors that would have jumped in an bought a house in, say, Moranbah for $800,000 and were getting rents of $2000+ a week, who are now only a couple of years later stuck with a house worth a quarter of that and with no one to rent it. What do they do? Walk away?

Too volatile...bugger tying up my money in the rental investment market...

[GREGL]

Originally Posted by ebxr8240

It's not all bad.. Let's face it these people will not claim any pensions ..
I am amassed the amount of people who don't have any super etc ..
Yet they have had good paying jobs ..
To anyone here saying prices are too high ..
Where are you wanting to buy yourselfe and how much deposit ?
In most cases first home buyers can afford 25 to 45 klrs from CBDs..
It has pretty much been that way for years..

Jeez maybe their moneys all tied up in house payments, it wasn't so long ago that Qld enjoyed a stable market until we had an influx of southerners ( early 2000's ) that created the first boom . Whilst you sydneysiders mostly had higher house values your wages were a tad higher to compensate .However you lot realised if you wanted to cheer on a winning football team you had to come north and hence artificially inflated our housing market .
GO THE MAROONS .

[ebxr8240]

Still can't beat the Kiwi's though from both states .. Lol