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Good News: Treasury pushing remodel of Negative Gearing for only new homes!; Corrupt and vested real estate interest run for cover!
Topic Started: 14 Aug 2014, 09:26 PM (33,881 Views)
Trojan
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propertymogul
21 Aug 2014, 12:38 PM
The way it works is like this skamy (it seems you genuinely don't understand). As an example a developer builds 50 units at an average cost of $250,000 per unit + GST. They then sell the units for $265,000 + GST to the end purchaser. They make their margin of $15k per unit which is their profit. The GST they've paid during construction they claim back from the ATO, and the GST they collect on sale (which is paid by the purchaser!) they pass on to the ATO.

The GST is paid for by the purchaser. Do some more research, and try again.
While you are at it, you might as well claim property investors pay no tax at all because at the end of the day, the property investor gets the money to pay for the taxes from the rent it collects from the tenant.

Likewise, you could also claim that no businesses pays any tax either as all of the taxes somehow gets passed on to the customers eventually.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Massive
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Shadow
21 Aug 2014, 03:28 PM
Sure, one of them could be. So could one of their landlords, or any one of their homeowner neighbours.

But the renter running the multi-million dollar company isn't paying any housing tax. The homeowner running the multi-million company is.

Besides, the vast majority of multi-million company owners would also own their own home. It's far more likely that a millionaire CEO is going to be a homeowner and/or property investor rather than a renter!
sure, but its an option .. some people own multiple IP's but rent their PPRO...
I run businesses and pay taxes for those but currently rent my PPOR….

The renter doesn’t pay taxes and costs as its not their investment – why should they pay? The owner is the one using it for capital gains or rents – and the costs attributed to that are put in the rental price anyway.. The only source of revenue the landlord gets is rent, and surely if that wasn’t enough to cover operating costs the investor wouldn’t have bought it in the first place.
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Shadow
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Trojan
21 Aug 2014, 03:33 PM
While you are at it, you might as well claim property investors pay no tax at all because at the end of the day, the property investor gets the money to pay for the taxes from the rent it collects from the tenant.

Likewise, you could also claim that no businesses pays any tax either as all of the taxes somehow gets passed on to the customers eventually.
Following propertymogul's logic to its conclusion, we could say nobody earns any income or pays any tax because all the money comes from banks and goes back into banks.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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propertymogul
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Trojan
21 Aug 2014, 03:33 PM
While you are at it, you might as well claim property investors pay no tax at all because at the end of the day, the property investor gets the money to pay for the taxes from the rent it collects from the tenant.

Likewise, you could also claim that no businesses pays any tax either as all of the taxes somehow gets passed on to the customers eventually.
You're not making sense here Trojan. I've simply explained the mechanics of how the GST works, if you don't understand you should do some research.
Shadow
21 Aug 2014, 03:36 PM
Following propertymogul's logic to its conclusion, we could say nobody earns any income or pays any tax because all the money comes from banks and goes back into banks.
Another dummy spit. Do you always come to ridiculous conclusions when you lose arguments?
Edited by propertymogul, 21 Aug 2014, 03:39 PM.
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Shadow
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Massive
21 Aug 2014, 03:35 PM
The renter doesn’t pay taxes and costs as its not their investment – why should they pay?
Nobody said they should pay. As I said before, I don't have an issue with renters paying less tax and being subsidised by homeowners. Homeowners are wealthier, have more assets and are making more money, so they pay more tax and hence subsidise services for people who pay less tax. That's just how the tax system works, here and pretty much everywhere else.
propertymogul
21 Aug 2014, 03:38 PM
Do you always come to ridiculous conclusions when you lose arguments?
Insufficient data to tell. I'll let you know if it ever happens.
Edited by Shadow, 21 Aug 2014, 03:41 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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propertymogul
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Sydneyite
21 Aug 2014, 03:31 PM
All "taxes" pay for government provided services. Rates (council), stamp dutues, GST (state government), income tax, CGT etc (commonwealth). I don't understand why you are trying to differentiate local government from the other levels? Everything we pay any of them is a "tax". The only differences are the things that the different levels of government are responsible for.
I can see where you are coming from here Sydneyite however there is a difference.

Rates go to local councils and they are restricted on how they can spend it to that area that the rate is being paid, and the homeowner directly benefits from it. They get their rubbish collected, their local roads maintained, and their local parks maintained. It is essentially fee for service. In my view it is actually one of the fairest taxes, each property in the area contributes to that areas services on an equitable basis. If I have a larger block I may pay a little more than the house next to me in a smaller block, but not much difference and we both get our rubbish collected, our local roads maintained etc i.e. we both get a direct benefit and the money can't be spent on anything but our areas services. It is a user pays system.

State and federal taxes go into consolidated revenue that then gets distributed in a manner that the state and federal governments decide, and may bear no direct relationship. That is, you could pay $100,000 in federal taxes and $50,000 goes to welfare recipients, $5,000 goes to funding negative gearing losses for PIs etc. On your $100,000 you may get very little benefit, lets say $20,000 indirect benefit. On the flipside, a negatively geared investor who pays $10,000 in tax after their losses may also be receiving $20,000 in indirect benefits out of consolidated revenue, i.e. they are receiving more in benefits than they are contributing. It is not a user pays system.

The difference is in the restrictions - local council rates are paid by local properties on a user pays basis and that money can only be spent on services that benefit the council area. State and federal taxes go into consolidated revenue and can get spent on all sorts of different things which may or may not benefit you.
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Dave
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propertymogul
21 Aug 2014, 03:54 PM
Rates go to local councils and they are restricted on how they can spend it to that area that the rate is being paid, and the homeowner directly benefits from it. They get their rubbish collected, their local roads maintained, and their local parks maintained. It is essentially fee for service. In my view it is actually one of the fairest taxes
Homeowner doesnt directly benefit, the occupant does!!! Renters should pay council rates like its done in the UK, thats fair cos they use the services in their area, why should I pay for the council to empty my tenants filthy bins and repair the roads they hoon it up on in their 4WDs and the schoolls their snotty nose renter offspring attend, why should I subsidize that tell me???
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propertymogul
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Shadow
20 Aug 2014, 07:33 PM
No, I'm not saying that. What a ridiculous claim.


Where did you pluck that figure from?

Net rental loss in 2011/2012 was $7.8 billion.

It would be much lower than that today due to the drop in interest rates since the 2011/2012 tax year.

Posted Image

In any case, it doesn't actually cost anything - it's just a few billion dollars claimed today rather than claimed a few years later, which is all that would happen if losses had to be quarantined
You've shot yourself in the foot posting this data Shadow.

The land taxes and rates that property investors pay would be included in the "other rental deductions" line of the table that you've posted. So after the $4B negative gearing tax benefit to PIs, you could add stamp duty. Which I think you said would be around $5B for PI. And capital gains. Woah that is worse than even I thought. So PIs are only paying $1B in net taxes + capital gains tax. On assets worth trillions.

Taxpayers really are shouldering your losses.
Dave
21 Aug 2014, 04:03 PM
Homeowner doesnt directly benefit, the occupant does!!! Renters should pay council rates like its done in the UK, thats fair cos they use the services in their area, why should I pay for the council to empty my tenants filthy bins and repair the roads they hoon it up on in their 4WDs and the schoolls their snotty nose renter offspring attend, why should I subsidize that tell me???
You could do that however rents would adjust downwards to reflect the reduced disposable income of renters. It would work out about the same. It benefits the PI by being able to charge a rent that includes those services.
Edited by propertymogul, 21 Aug 2014, 04:07 PM.
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Shadow
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propertymogul
21 Aug 2014, 04:05 PM
Taxpayers really are shouldering your losses
What losses? The fact that we pay so much tax means we are not making losses.

2012 figures...

Land tax = $6 billion
Rates = $14 billion
Stamp duty = $13 billion

A third of the housing stock is owned by investors, so that's $4.7b in rates plus $4.3b in stamp duty. Land tax ($6b) is all paid by investors.

That's $15 billion so far. Plus 100% of capital gains tax and 100% of tax on rental income. Plus GST.

Then add another 10% due to the rise in house prices since 2012.

It would be at least $20 billion paid by property investors. We pay that. The government receives it. We don't get it back.

The $4 billion tax deferred by negative gearing does not somehow negate the $20 billion paid in taxes as you are trying to claim with your twisted logic.

Quote:
 
after the $4B negative gearing tax benefit to PIs
Don't forget, this is not actually a cost to the government or a net benefit to the investor - it's just the amount that gets claimed earlier rather than later.

And it would be much less than $4 billion today due to the big drop in interest rates.
Edited by Shadow, 21 Aug 2014, 04:23 PM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Elastic
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Dave
21 Aug 2014, 04:03 PM
Homeowner doesnt directly benefit, the occupant does!!! Renters should pay council rates like its done in the UK, thats fair cos they use the services in their area, why should I pay for the council to empty my tenants filthy bins and repair the roads they hoon it up on in their 4WDs and the schoolls their snotty nose renter offspring attend, why should I subsidize that tell me???
It's outrageous all this subsidising of renters that these landlords have to put up with.
They should join together and mass evict all those leeching renters just to teach them a lesson.
Only a rat can win a rat race.

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