This is nonsense, GST is paid for by the developer out of the developer profit.
A house sells for the market rate whether it is new or not. Developers could not just increase the price by 10% because of the GST that is just not how the market works.
Rubbish. GST is paid by the entity that purchases the property being constructed. In the case of individuals (the majority of new builds) they can't claim the GST and are the ultimate payer of this cost.
Developers pay GST on materials they use during the construction and sometimes on labour hire but claim it back when they lodge their BAS.
Your statement that "GST is paid for by the developer out of the developer profit" is so wrong it shows you have a massive lack of understanding of how this all works.
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
There will always be people convinced house prices are going to crash and willing to rent indefinitely while waiting for the crash that never comes.
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
Who the fuck are you to tell anyone how to live their lives?
Also, you might want to acquaint yourself with the "paradox of thrift"
Who are you to tell the rest of us "investors" how to live our lives.
If you want to live life as you may get cancer tomorrow, fine do that it is you're choice.
However dont turn around and say you then expect to buy a house at a price YOU think is affordable and not what the market price is.
All the people who did not spend money like no tomorrow and invested it in various forms, not only property. Why should they be restricted as to what price they can sell that investment to people who enjoyed themselves while others saved and invested the money.
If you do not want to participate in the market (property, shares, gold, whatever) dont complain when you cannot buy into that market at a price you want.
For example, if I want to invest all of my money in property and build houses to sell to people wanting to enter the market, why should I not be able to make as much money as possible when I bear the risk of that investment until it sells, if it sells. I take the risk, so I get the reward for success or the bill for failure.
Yes, and that's the point that Bullion Barron, Peter Fraser and myself and many others have made numerous times. It is constantly ignored by NG-haters who imagine some magic windfall flowing into the government's coffers should NG rules be changed. Actually, NG has become a proxy for the debate around housing affordability. It's the scapegoat favoured by those who want more affordable housing but refuse to discuss immigration and population growth.
That is true Doc but the fact that the tax break is claimable immediately means that it is easier for the investor to carry the property through the loss making stage potentially increasing their debt carrying capacity. Additionally, this arrangement favours the investors who have no intention of selling the property and have decided they will retire early and live off the rental proceeds til death. This is a fairly common approach amongst the "serious" investors. Presumably the government will eventually get their hands on the capital gains upon death.By the way, I enjoyed watching the bulls scrabbling and squirming throughout this thread.
Who are you to tell the rest of us "investors" how to live our lives.
I didn't.
Quote:
However dont turn around and say you then expect to buy a house at a price YOU think is affordable and not what the market price is.
Okay, seeing as I never have, I doubt I will say that.
Quote:
All the people who did not spend money like no tomorrow and invested it in various forms, not only property. Why should they be restricted as to what price they can sell that investment to people who enjoyed themselves while others saved and invested the money.
What restrictions exactly do you think I am proposing?
Quote:
If you do not want to participate in the market (property, shares, gold, whatever) dont complain when you cannot buy into that market at a price you want.
I'm not complaining. And never have.
Quote:
For example, if I want to invest all of my money in property and build houses to sell to people wanting to enter the market, why should I not be able to make as much money as possible when I bear the risk of that investment until it sells, if it sells. I take the risk, so I get the reward for success or the bill for failure.
Agreed, providing you pay a fair share of tax based on a progressive system of taxation.
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
That is true Doc but the fact that the tax break is claimable immediately means that it is easier for the investor to carry the property through the loss making stage potentially increasing their debt carrying capacity. Additionally, this arrangement favours the investors who have no intention of selling the property and have decided they will retire early and live off the rental proceeds til death. This is a fairly common approach amongst the "serious" investors. Presumably the government will eventually get their hands on the capital gains upon death.
Yes this plus two other points:
1. Probably between 10-30% of investment properties are sold at a loss so the negative gearing benefit to the PI is never recovered. 2. The difference in cashflow for the government will either save them interest on debt or earn interest on surplus funds.
These are two savings that would be passed on to taxpayers shouldering the burden of carrying property investors losses if negative gearing were not allowed.
Presumably the government will eventually get their hands on the capital gains upon death
Capital gain is a separate topic. It is not necessary to sell in order that the negative gearing benefit be recovered.
The government gets its hand on tax revenue from the rental income as soon as the property becomes cashflow positive, which would be after 5-10 years for most property (less with current low interest rates). That property might be held for many decades to follow... maybe six or seven decades of rental income tax revenue for the government, in return for allowing investors to negative gear for a few years at the beginning (which ultimately costs the government nothing anyway). Win-win.
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I enjoyed watching the bulls scrabbling and squirming throughout this thread
By 'scrabbling and squirming' I assume you mean 'posting official data to debunk the bears' nonsense'.
By 'scrabbling and squirming' I assume you mean 'posting official data to debunk the bears' nonsense'.
You are the one that got your arse handed to you.
Take it like a man for once.
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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