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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 (33,876 Views)
Trojan
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propertymogul
21 Aug 2014, 06:10 PM
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.


Let me guess - stamp duty for property title transfers also directly benefit the property investor - they get their property title transfer stamped ... so that should also not be counted as a tax PI pay? Oh and any excess is used by the state government to improve the state ... thus further directly benefiting the property investor by improve value of housing in the state. Otherwise tenants in that state would need to pay for their own education and hospitals right?
:re:

And please don't go off on a tangent how stamp duty doesn't go into local and federal consolidated revenue.
Edited by Trojan, 21 Aug 2014, 06:49 PM.
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, 06:36 PM
Yeah, those idiot property owners making all that profit. It's not fair is it? They should be poor like the clever renters.
I thought the argument is they aren't making profit because of all them darn taxes you are subsidizing for renters, hence the need for NG?

Regardless being smart was never a prerequisite to making money. Though I know you really just wanted to gloat/patronize as distraction from your limp discussion points.
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propertymogul
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Trojan
21 Aug 2014, 06:43 PM


Let me guess - stamp duty for property title transfers also directly benefit the property investor .. so that should also not be counted as a tax PI pay?
No. Stamp duty paid by PIs should be counted towards their net contribution to the broader economy outside their property. The property does not receive any direct service for stamp duty that would otherwise have to be paid for by the homeowner.

Trying to stretch the strawman argument to the limit just makes you look silly.
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skamy
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propertymogul
21 Aug 2014, 06:10 PM

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.

A cracker of a point! The $5B net contribution to tax by PIs is dropping lower still.
Wrong anyone who has done a development knows how the GST worked on ew builds. There is a subtlety here that you are just not getting, probably because you have never built and sold a new house.

If you guys are right show me the adverts that show house prices at market value and an added GST. They don't exist do they? No-one would buy a new build if the GST component was added to the market price.

Almost all other GST liabilities were covered by the purchaser eg The price of goods rose by the value of the added GST minus any removed taxes.

This is not what happened with new builds. New houses are valued on a par with their non GST paying neighbours.
The buyer of a new house does not have to fork out the cost of a GST liability. They would pay for same for the house whether or not it was taxed. so the buyer does not pay the tax.

If a builder builds two identical homes, one is completed a month before the other and is sold for say $600k. Let us say that one month later the house comes back on the market. Now you have two identical houses for sale both at $600k ie the buyer pays the same price for the same house whether or not it is liable for GST. It is the developer and only the developer who is affected by the liability for GST.

I have just gone through this whole process I do not need anyone quoting from a tax book about who pays what, I know exactly who paid the GST it was me. The GST was not factored into the price in any way, the price was based on recent sales in the area of similar houses most of which were not liable for GST.
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.
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Trojan
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propertymogul
21 Aug 2014, 06:47 PM
No. Stamp duty paid by PIs should be counted towards their net contribution to the broader economy outside their property. The property does not receive any direct service for stamp duty that would otherwise have to be paid for by the homeowner.
Of course the PI has a direct service from paying the stamp duty ... you try getting the title transferred without paying the stamp duty ....
And if the title is not transferred to the property investor's name, they won't be able to rent it out ...

And council rates also benefit the local economy outside their property ... it not just for waste removal you know.
Edited by Trojan, 21 Aug 2014, 06:55 PM.
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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Veritas
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Trojan
21 Aug 2014, 06:51 PM

.
Quote:
 
And council rates also benefit the local economy outside their property ... it not just for waste removal you know.


So you're saying that my tax dollars benefit people other than me?

That's an outrage!
:re:
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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propertymogul
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skamy
21 Aug 2014, 06:48 PM
Wrong anyone who has done a development knows how the GST worked on ew builds. There is a subtlety here that you are just not getting, probably because you have never built and sold a new house.

If you guys are right show me the adverts that show house prices at market value and an added GST. They don't exist do they? No-one would buy a new build if the GST component was added to the market price.

Almost all other GST liabilities were covered by the purchaser eg The price of goods rose by the value of the added GST minus any removed taxes.

This is not what happened with new builds. New houses are valued on a par with their non GST paying neighbours.
The buyer of a new house does not have to fork out the cost of a GST liability. They would pay for same for the house whether or not it was taxed. so the buyer does not pay the tax.

If a builder builds two identical homes, one is completed a month before the other and is sold for say $600k. Let us say that one month later the house comes back on the market. Now you have two identical houses for sale both at $600k ie the buyer pays the same price for the same house whether or not it is liable for GST. It is the developer and only the developer who is affected by the liability for GST.

I have just gone through this whole process I do not need anyone quoting from a tax book about who pays what, I know exactly who paid the GST it was me. The GST was not factored into the price in any way, the price was based on recent sales in the area of similar houses most of which were not liable for GST.
Still wrong. Developers pay GST on their costs, which they claim back from the ATO, and they collect GST on their sales, which they pass on to the ATO. The GST on sale is paid by the purchaser of the property.
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miw
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Massive
21 Aug 2014, 06:32 PM
honestly - all this thread is showing me is how much dumb money is in Aussie property ( at least in the subset represented on this forum )
Probably most of them are smart enough to know if they are making or losing money, and know what to do in order to fix it if they are losing money and that's good enough for them. I wouldn't listen to most of them when it comes to housing policy though. A fish doesn't need to know how to solve the Navier-Stokes equation for viscous fluids in order to be able to swim.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Trojan
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propertymogul
21 Aug 2014, 06:47 PM
Trying to stretch the strawman argument to the limit just makes you look silly.
You mean like attacking the strawman that council rates go into federal and state consolidated revenue?
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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propertymogul
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Trojan
21 Aug 2014, 06:51 PM
Of course the PI has a direct service from paying the stamp duty ... you try getting the title transferred without paying the stamp duty ....
And if the title is not transferred to the property investor's name, they won't be able to rent it out ...

And council rates also benefit the local economy outside their property ... it not just for waste removal you know.
The $1,700 a year I pay in rates gets my rubbish collected, local roads maintained, local parks maintained. The cost of this is approximately what I pay, in fact most councils operate at a loss and they can't spend it on anything which doesn't benefit my property.

$20k on stamp duty receives a title transfer which may cost the state government $200 in labour (surely this would be mostly automated now), so the rest goes into state consolidated revenue which doesn't directly benefit my property.

Understand the difference? I think you do.
Trojan
21 Aug 2014, 06:58 PM
You mean like attacking the strawman that council rates go into federal and state consolidated revenue?
Council rates don't go into federal and state consolidated revenue. They are spent on services that directly benefit the property like rubbish collection and maintenance of local roads and parks.
Edited by propertymogul, 21 Aug 2014, 07:07 PM.
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