And the link in your sig basically admits as much.
Debunked here:
No, I was absolutely correct. They get approx $9b from rates, $6b from stamp duty, $6b from GST, $15b from development fees, $6b from land tax. Plus GST.
It currently adds up to about $40 billion NET per annum...
This is from 2011, so obviously the numbers are up a bit since then...
'The housing sector is one of the most heavily taxed sectors of the Australian economy, both in absolute and relative terms. The housing sector contributes between $36 billion and $40 billion in taxation revenue each year to federal, state and local governments in Australia. This equates to 11 to 12 per cent of the total revenue collected by all tiers of government. Only one sector, wholesale and retail trade, contributes more and its contribution is only marginally larger.'
Your links don't debunk anything.
Veritas
20 Aug 2014, 02:00 PM
I just did. Follow the links.
Your links don't contain any information at all about the net government tax intake from the housing sector. You seem to have gone off on a tangent about 40% of the value of a home being comprised of tax. Different topic. Perhaps you posted the wrong links?
Yes it is an exception, the rules are stated quite clearly. Covered above, the ATO considers things like bushfires and oil spills to be unusual circumstances. The ATO says the following about start ups possible being granted an exception.
Rubbish. The rule is that deductions are not allowed for activities that are hobbies, non-commercial, or not likely to generate profit. That page on the ATO gives guidelines for default interpretation f the rule. It clearly states that you can meet the guidelines and still be denied immediate deduction if they still think it is really a hobby, and you can not meet the guidelines and still be granted a waiver if you can show that it is a commercial business.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
That may be your own personal opinion, but it's not my view, nor is it the view of the government / ATO, nor the majority of voters. Buying and maintaining property to rent is just as legitimate an endeavour as buying shares or mowing lawns or any other endeavour that an individual might conduct with the aim of bringing in some extra income.
The housing sector is the second highest taxed sector of the economy, contributing over $40 billion NET revenue for the government every year via stamp duty, land tax, tax on rental income, GST on new dwellings, rates, development fees etc. The truth is highly taxed property owners are subsidising essential services for low taxed renters.
The tax deferred (not forgone but just deferred) via negative gearing is a drop in the ocean, and if those losses were not claimed against personal income today then they would simply be claimed against future IP income tomorrow. The net result is zero - the government doesn't lose any money over the long term by allowing expenses to be claimed immediately rather than carrying them forward.
So the 'taxpayers' (by which you really mean 'renters') are not subsidising anything. The 'taxpayers' are actually subsidised by the $40 billion net government revenue contributed by the housing sector every year. So remember that next time you drive on a road or use a hospital or take your kids to school. Taxes taken from homeowners enable you to do all that. We're sudsidising you. But you don't hear us whinging about the unfairness of it all.
That may be your own personal opinion, but it's not my view, nor is it the view of the government / ATO, nor the majority of voters. Buying and maintaining property to rent is just as legitimate an endeavour as buying shares or mowing lawns or any other endeavour that an individual might conduct with the aim of bringing in some extra income.
I didn't realise you could read the minds of the government/ATO, as well as all voters in Australia, amazing. I don't pretend to know what the majority of voters and the government and ATO are thinking, but I do know that lots of people agree with this view. And people with a vested interest in negative gearing property should not be counted, as they can't be independent. The difference in cashflow could break them.
The housing sector is the second highest taxed sector of the economy, contributing over $40 billion NET revenue for the government every year via stamp duty, land tax, tax on rental income, GST on new dwellings, rates, development fees etc. The truth is highly taxed property owners are subsidising essential services for low taxed renters.
Australian property is worth around $5 trillion. Construction of new dwellings is too highly taxed I agree, but that is not what we are discussing. So $40 billion net revenue (assuming your figures are accurate) is only 0.8% of the value of property assets in Australia, a pitiful amount of net tax for such a huge asset base. And that includes tax on new builds, which is probably the bulk of that figure. Looks like property investors contribute bugger all to the tax base then, as most of the 0.8% property asset value going into tax revenue comes from construction of new builds. Instead they are leaching off taxpayers.
The tax deferred (not forgone but just deferred) via negative gearing is a drop in the ocean, and if those losses were not claimed against personal income today then they would simply be claimed against future IP income tomorrow. The net result is zero - the government doesn't lose any money over the long term by allowing expenses to be claimed immediately rather than carrying them forward.
Refer above - billions of dollars is not a drop in the ocean to taxpayers carrying the burden of supporting property investors. However you are right though that compared to the value of property, the tax contributed by that sector is pitiful. Regarding the timing, we all know that it is better to have a dollar this year rather than next. Particularly important when dealing with taxpayer funds which incur interest when the government is in debt.
So the 'taxpayers' (by which you really mean 'renters') are not subsidising anything. The 'taxpayers' are actually subsidised by the $40 billion net government revenue contributed by the housing sector every year. So remember that next time you drive on a road or use a hospital or take your kids to school. Taxes taken from homeowners enable you to do all that. We're sudsidising you. But you don't hear us whinging about the unfairness of it all.
No by 'taxpayers' I mean 'taxpayers'. The 0.8% of property value that makes it into tax revenue each year is mostly made up of taxes on construction of new builds and rates. Rates go to local councils that collect rubbish and maintain roads (i.e. it doesn't go into state or federal coffers), so the homeowner (including property investors) receive direct bang for their buck for these dollars. Property investors on existing builds (their preferred investment) are contributing bugger all particularly when you put it in percentage terms, meaning that (non property investor) homeowners, construction companies and builders are paying the bulk of those taxes. After deductions property investors are contributing bugger all to tax revenue off a huge asset base that is a basic human need.
No, I was absolutely correct. They get approx $9b from rates, $6b from stamp duty, $6b from GST, $15b from development fees, $6b from land tax. Plus GST.
It currently adds up to over $40 billion NET per annum...
This is from 2011, so obviously the numbers are up a bit since then...
'The housing sector is one of the most heavily taxed sectors of the Australian economy, both in absolute and relative terms. The housing sector contributes between $36 billion and $40 billion in taxation revenue each year to federal, state and local governments in Australia. This equates to 11 to 12 per cent of the total revenue collected by all tiers of government. Only one sector, wholesale and retail trade, contributes more and its contribution is only marginally larger.'
Your links don't debunk anything. Your links don't contain any information at all about the net government tax intake from the housing sector. You seem to have gone off on a tangent about 40% of the value of a home being comprised of tax. Separate issue. Perhaps you posted the wrong links?
Give me strength.
The Minister for Housing in WA laughed that report out of the room ( Proper Order). Its a puff piece from a vested interest.
Quote:
Housing Minister Bill Marmion questioned the reliability of the data but said taxes and fees were being discussed at the ministerial roundtable on affordable housing.
He said because the HIA had not supplied a full breakdown of government charges, it was hard to judge their veracity.
"We would be very interested to see the full breakdowns so that the roundtable can discuss them in detail," Mr Marmion said.
This is what you claimed in the NG thread
Approx 40% of the cost of a new home is pure tax. If the tax component was removed, house prices would be 40% lower.
Look at the chart. It doesn't come near 40%. Can you prove your claim or are you playing fast and loose once again.
And what is the housing sector? If I own a bike am I in the bike sector? If I own a car, am I in the car sector?
Laughable spin and nonsense
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
And btw Mike the onus is not on me to prove him wrong anyway.
I didn't make the bullshit assertion in the first place.
I'm just calling it out for the bullshit it is.
From Federal/State/Local taxes the Government collects over $35 billion in taxes on property.
This does not include income tax on rental income. I could go to the trouble of find the data for you, but out of the total of $241 billion collected in 2013 for income taxes im sure a few % is from income tax on rental income. If only 5% of income taxes come from rental income which that adds another $12 billion in taxes.
Australia has some 3 million rental properties roughly, of that 1.2 million are negative geared and that was in 2010 when interest rates were much higher. The number would be less now as rents have increased substantially in the last 4 years while interest rates have fallen. Even so only 35-40% of all rental properties are negatively geared. Meaning 60% of rental properties generate an income for the Government from rental income taxes.
Negative gearing refunds cost the Government around $13 billion, which is more then paid for by income taxes on rental properties which are positively geared.
Provide links to show all government taxes collect less money then they pay out on negative gearing as the ABS and ATO disagree with YOU.
Veritas
20 Aug 2014, 02:15 PM
Give me strength.
The Minister for Housing in WA laughed that report out of the room ( Proper Order). Its a puff piece from a vested interest.
Does the Minister laugh at official documents from the ATO and ABS which state Government revenue, income and expenses.
Its all there in the figures for you to read from official sources, you just don't want to admit it.
Rubbish. The rule is that deductions are not allowed for activities that are hobbies, non-commercial, or not likely to generate profit. That page on the ATO gives guidelines for default interpretation f the rule. It clearly states that you can meet the guidelines and still be denied immediate deduction if they still think it is really a hobby, and you can not meet the guidelines and still be granted a waiver if you can show that it is a commercial business.
My goodness, from the ATO website below:
These are requirements that must be met. Exceptions to the requirements are only allowed at the discretion of the ATO. They are not guidelines. Read it again. Exceptions allowed include artists and primary producers (listed on ATO website). Any exceptions not listed can only be approved at the discretion of the ATO. Examples of exceptions to the rules which the ATO say they will consider are bushfires and oil spills.
"Income requirement and business tests
To be able to offset a business loss against other income, you and your business need to meet a number of requirements.
Income requirement
Your income for non-commercial loss purposes must be less than $250,000. It includes your: taxable income (ignoring any business losses) total reportable fringe benefits amount reportable superannuation contributions total net investment loss.
If you pass the income requirement, you must also meet one of the business activity tests, unless you are covered by an exception to the rules or we exercise our discretion to allow you to offset your loss against other income.
Further Information The income requirement was introduced in the 2009-10 year. For more information, refer to Non-commercial losses - income requirement. End of further information Business tests
If you meet the income requirement, you can offset a loss from a business against your income from other sources if the business passes one of these tests: The assessable income test - the business has assessable income of at least $20,000. The profits test - the business had a profit for tax purposes in three out of the past five years (including the current year). The real property test - the value of real property, or of an interest in real property, that you used in the business on a continuing basis was at least $500,000. The other assets test - the value of assets (excluding real property, cars, motor cycles and similar vehicles) you used on a continuing basis in carrying on the business was at least $100,000."
Approx 40% of the cost of a new home is pure tax. If the tax component was removed, house prices would be 40% lower.
I'm not sure what context that was originally made in, but I'm pretty sure the original study made it clear that the 40% was 40% of the costs other than land purchase. If you think about it, it doesn't make any sense to include the cost of the land in the equation because it varies so widely with location.
40% is also not far off the mark if you only consider greenfield sites using englobo land. Obviously it would be way off the mark if you included the price of a block in an established suburb of a capital city.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
$36 billion net tax revenue from the property sector in 2012-2013, and it would be higher today given the rise in prices and corresponding rise in stamp duty...
$36 billion net tax revenue from the property sector in 2012-2013, and it would be higher today given the rise in prices and corresponding rise in stamp duty...
Right.
So I am in the housing sector if I own a house yeah?
I own a car. I pay taxes on that car. Am I in the car sector?
Am I the same as someone who sells or rents cars as a business?
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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