All the costs of making a property available to the renter ( including paying for their waste collection etc ) is built into the rent as part of the market price ...
If you cant even figure out that every accrued cost in running your venture is a not a “subsidy” but part of what they are paying rent for then you need to pull your head out of the sand…. Its not the renter’s problem if you feel you have too many costs – you offered the service with the accepted market conditions ( assumingly understanding the costs ) and they accepted it ... that’s simply business..
to act like PI's are providing a charity reducing renter's tax burden or whatever is - absurd ......
edit: landlord's claiming tax concession for not being able to cover their costs IS a subsidy. Not an unreasonable one IMO, though i do agree it should be directed to more productive investment in property ( like construction of new residences rather than supporting the values of existing ones ) ...
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.
Nope Those taxes were paid in full. The 30% or so that the investors got back due to the deductions is already counted on the other side as a deduction. The various levels of govt did not magically not receive the tax just because the tax is also an allowable expense any more than the tradies who did repairs failed to receive their full payment just because it was a deduction on the rental income.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
All the costs of making a property available to the renter ( including paying for their waste collection etc ) is built into the rent as part of the market price ...
If you cant even figure that out and instead think that every accrued cost in running your venture is a not a “subsidy” but part of what they are paying rent for then you need to pull your head out of the sand…. Its not the renter’s problem if you feel you have too many costs – you offered the service with the accepted market conditions ( assumingly understanding the costs ) and they accepted it ... that’s simply business..
to act like PI's are providing a charity reducing renter's tax burden or whatever is - absurd ......
Hooray!
Let's just repeat that for emphasis:
Quote:
All the costs of making a property available to the renter ( including paying for their waste collection etc ) is built into the rent as part of the market price
Not only does this mean that LLs are not in any way providing some kind of charity. it also means that if own-to-rent gets made more expensive to do, rents will necessarily rise as the market incorporates the new information.
The LLs take risks and put time, effort and capital into the rental properties. The tenants pay them for that service. Because there are so many LLs and so many tenants, overall it is a pretty fair trade. If you change something somewhere else then the price will change so that it remains a pretty fair trade.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Nope Those taxes were paid in full. The 30% or so that the investors got back due to the deductions is already counted on the other side as a deduction. The various levels of govt did not magically not receive the tax just because the tax is also an allowable expense any more than the tradies who did repairs failed to receive their full payment just because it was a deduction on the rental income.
The taxes were paid in full, but reduced the amount of tax they pay on other income i.e. they are a tax deduction. The government only receive the tax on their income after these deductions, I don't think you would deny this. I've assumed an average tax rate of 30% for these PIs, reasonable no?
to act like PI's are providing a charity reducing renter's tax burden or whatever is - absurd ......
It's not really a charity. We don't do it out of the kindness of our hearts. We pay more tax than renters because we are required to by law.
If we could get away with paying an equal amount of tax as you (while maintaining our profits) then I think most of us would gladly stop subsidising you.
But we have to obey the law like everyone else, and that law requires us to subsidise you.
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. Another dummy spit. Do you always come to ridiculous conclusions when you lose arguments?
From the day GST was introduced there was no place to fund it from other than the developer profit. It was impossible to hike the price of new builds by 10% so that purchasers covered the price.
Whereas Plumbers etc ALL had to add GST to their normal rates this meant that the purchaser/user paid. However this was just not the way it worked with NEW builds.
IMO, GST on new builds has been a significant drag on supply of new houses within existing suburbs.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
It's not really a charity. We don't do it out of the kindness of our hearts. We pay more tax than renters because we are required to by law.
If we could get away with paying an equal amount of tax as you (while maintaining our profits) then I think most of us would gladly stop subsidising you.
But we have to obey the law like everyone else, and that law requires us to subsidise you.
its not a subsidy you twit... its a cost of doing business...
the renter PAYS for this cost in the rent they pay you... like a customer pays macdonalds for the delievery of the beef to that restaurant... you also help macdonalds pay for its taxes in each burger you purchase...
its not fucking rocket science...
If your rental income from renters ( your source of income ) couldn't cover these costs - then the business model fails and you need to ask for more rent ... OR you have facility to ask for concessions / subsidies from the taxpayer through NG..
Ok I see your point of view as well, however I still don't agree. Local government spending seems "closer" to you because it's *local*. That's all. And as others have pointed out a PI pays rates for houses they don't even live in, and may live in a completely different council area - that makes those rates they pay a "tax" I think even from your point of view? What's more, if it was just a payment for services, then it should be optional, not compulsory, plus you should have a choice of "service providers" - not the case with council rates and what they choose to spend the money on. instead it's compulsory (ie a "tax") and we elect the representatives on the council as our way of having a say on local government spending and priorities.
State governments and the Commonwealth are restricted as well both in terms of how they raise revenue and how they can spend it based on the constitution. All levels of government have restrictions. But bottom line, any "compulsory" payment that must be made to a government of any level is IMO a tax. That's the broadest (and most correct) definition in my books.
It is a tax, I never disputed that, but one that the property receives a direct service for. They are paying their portion of the rubbish collection etc. That is, there is no net benefit to other taxpayers and of course directly effects the amount of rent they can charge. What I am saying is if you want to say how much tax PIs contribute from their investments, we need to look at the amount that is not going directly back into their property as both a service and as a contributor to their rent, i.e. how much tax are they contributing outside of what goes directly back into their property.
It is not just because it is *local*, it is because the property receives a direct benefit from the tax, i.e. it is essentially a direct running cost of the property, that if it wasn't done by the council, would need to somehow be paid by the property owner if they want rubbish collected and neighbourhood maintained. It is the direct connection between the property and the benefit the property receives that differentiates it when considering how much tax PIs contribute to the broader economy.
skamy
21 Aug 2014, 06:05 PM
From the day GST was introduced there was no place to fund it from other than the developer profit. It was impossible to hike the price of new builds by 10% so that purchasers covered the price.
Whereas Plumbers etc ALL had to add GST to their normal rates this meant that the purchaser/user paid. However this was just not the way it worked with NEW builds.
IMO, GST on new builds has been a significant drag on supply of new houses within existing suburbs.
skamy notice that not even the bulls are backing you on your incorrect view of the GST. Re-read the threads, do some research, learn. The purchaser of the property pays the GST.
Elastic
21 Aug 2014, 05:24 PM
Would we class rent assistance as a subsidy paid by the government to the property investor? You know, because the government don't want to pay for public housing.
A cracker of a point! The $5B net contribution to tax by PIs is dropping lower still.
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