Libs lie about Neg gearing

[johnsmith]

Labor pounces on Scott Morrison's negative gearing 'lie' after release of secret briefing documents

Federal Labor's negative gearing overhaul would likely have a "small" impact on home values, official documents reveal, contradicting Government claims the policy would "smash" Australia's housing market.

The previously confidential advice to Treasurer Scott Morrison from his own department said the Opposition's plan might cause "some downward pressure" and could have "a relatively modest downward impact" on prices.

The ALP's plan to restrict the tax deduction, along with halving the capital gains tax (CGT) discount, was a major issue during the 2016 election campaign.

Coalition figures have variously claimed the plan would attack the housing market with a "chainsaw", "axe" or "sledgehammer", and would bring Australia's economy to a "shuddering halt".

But after winning a two-year legal fight, the ABC can reveal Treasury officials in early 2016 gave very different advice to Mr Morrison.

"The ALP policies could introduce some downward pressure on property prices in the short term, particularly if the commencement of the policy coincides with a weaker housing market," they wrote.

"In the long term, increases in taxation on rental property could have a relatively modest downward impact on property prices."

Many of Australia's two million property investors make a loss, and negative gearing allows them to use the losses to reduce their overall tax bill.

The capital gains tax discount generally sees half the profits from the sale of an investment property go untaxed.



http://www.abc.net.au/news/2018-01-08/govt-negative-gearing-claims-contradicted-by-official-advice-foi/9309736



Once again the libs show themselves to be dishonest lying arseholes.




ohh and Goose boy,

Wait a minute... wait a minute.
Do the treasury papers say or not that changes to Negative gearing will hardly affect the price of housing?
Doesn't that contradict the ALP's policy line?

no, it doesn't. Labor never said housing prices would crash. this is what they said

http://www.alp.org.au/negativegearing


both a retard like you isn't interested in the truth now are you goose.

[johnsmith]

If Aussie or Greg could ask Goose to show where labor ever said their proposed policy would cause housing prices to crash, it would be appreciated.

[Aussie]

Done.

[johnsmith]

thanks Aussie

[HBS Guy]

What a moron roach is and nasty and domineering with it!

[MilesAway]

.... real life trolls at the Christmas table: all sorts of different guises but all share the same trait!



*** go the legacy that is copper internet, yayyyy

[johnsmith]

i see goose is now running away from his comment

[johnsmith]

I see goose is at it again

We were told their policies would lower the cost of housing, making it affordable for Australians now shut out of the system

can someone ask goose to put up that quote he's alluding to, in full.

[Lefty]

This is an interesting one - as in, what will actually occur if it goes ahead?

We should never have allowed the cost of the basic human need for shelter from the elements to spiral out of control like we have. But we did because we were greedy and now it could possibly be a bit like unscrambling an egg.

They are wise to propose the grandfathering of existing arrangements. I had all this info on file once, now I'll have to just have to refer to memory - so some of this may be innacurate. It's true that there was no broad spike in rental costs after Keating quarantined NG all those years ago. But NG has exploded in popularity since then and a much larger portion of the rental stock is owned by NG'd investors vs positively geared. Spiralling prices would have pushed servicing your average landlords mortgage - even with rock bottom interest rates - well above what your typical rental tenant can comfortably afford to pay, if they can realistically afford it at all. So if existing arrangements were removed then landlords would seek to pass the cost onto their tenants, causing considerable hardship for those least able to afford it.

But the grandfathering proposal should safely prevent that.

Exactly how it is likely to affect the housing market seems like a difficult question to answer in advance though. A million-odd NG'd investors will be left holding property on terms that no new buyer will be able to receive if they were to purchase it. That coupled with the returning of the CGT to the levels of pre-Howard seems likely to reduce demand and (assuming all other things equal) place not-inisgnificant downward pressure on prices.

If it does and if so by how much we'll just have to wait until after the coming election to find out - since Labor will surely win.

[johnsmith]

Exactly how it is likely to affect the housing market seems like a difficult question to answer in advance though.

In general, I think some investors will buy in new houses, others will just find other investment sources. Increases in prices will stall, but apart from a minor adjustment (which happens periodically anyway), I don't see them falling very much.

My problem is with units specifically built for the holiday market. There are hundreds of thousands of units on the Gold Coast, Brisbane, and beyond which are build specifically for the purposes of rentals to holiday makers. Who's going to buy those when they come up for resale? they're not fit to live in permanently, some don't even have a kitchen, just a microwave or those that do have a one element cook top. WHat happens to all the people that bought the management rights to manage those buildings? their business becomes worthless.

I don't disagree with limiting NG if that's what the people want (although I don't think NG is as much to blame as some claim, I think it's more the capital gains tax deductions that are having a greater effect on property prices), but I think it should be limited to one property only. After that you're on your own.

[pinkeye]

This is an interesting one - as in, what will actually occur if it goes ahead?

We should never have allowed the cost of the basic human need for shelter from the elements to spiral out of control like we have. But we did because we were greedy and now it could possibly be a bit like unscrambling an egg.

They are wise to propose the grandfathering of existing arrangements. I had all this info on file once, now I'll have to just have to refer to memory - so some of this may be innacurate. It's true that there was no broad spike in rental costs after Keating quarantined NG all those years ago. But NG has exploded in popularity since then and a much larger portion of the rental stock is owned by NG'd investors vs positively geared. Spiralling prices would have pushed servicing your average landlords mortgage - even with rock bottom interest rates - well above what your typical rental tenant can comfortably afford to pay, if they can realistically afford it at all. So if existing arrangements were removed then landlords would seek to pass the cost onto their tenants, causing considerable hardship for those least able to afford it.

But the grandfathering proposal should safely prevent that.

Exactly how it is likely to affect the housing market seems like a difficult question to answer in advance though. A million-odd NG'd investors will be left holding property on terms that no new buyer will be able to receive if they were to purchase it. That coupled with the returning of the CGT to the levels of pre-Howard seems likely to reduce demand and (assuming all other things equal) place not-inisgnificant downward pressure on prices.

If it does and if so by how much we'll just have to wait until after the coming election to find out - since Labor will surely win.

Agreed.

[Lefty]

In general, I think some investors will buy in new houses, others will just find other investment sources. Increases in prices will stall, but apart from a minor adjustment (which happens periodically anyway), I don't see them falling very much.

This is the thing I'm wary of because we're not sure how people will react - in the eyes of investors, all property including existing NG'd property (and including houses as well as units) would be devalued because once it changes hands, the new owner will no longer be able to claim the tax deduction.

How many investors - and at close to half of the market, they are the driving force - would want to buy/build new housing when they will no longer be able to claim any losses made on it to reduce the tax they pay while waiting for it to accrue a big enough capital gain in order to on-sell it (remembering that capital gains will be reduced as well) - to someone else who will also not be able to make the claim and is therefore probably less interested in it. Given the cost of housing today, your average rental tenant would struggle to cover a landlords mortgage cost if it cannot be written off.

Don't get me wrong - I absolutely agree that what we have allowed (read:encouraged) to happen is a travesty and has quashed the notion of an egalitarian society. But can we so easily undo what has been done without serious side effects? That's the question.

[HBS Guy]

It has to be done and as you know I recommend a staged reduction in NG—no quick results but no calamity either.

Investors are building more and more units anyway so opportunities to invest in BUILDING residences are endless and attract NG. Maybe leave the 50% CGT discount? Once built the residences have to have a tenant in them to get the NG/CGT discount.