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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 (33,875 Views)
Shadow
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propertymogul
21 Aug 2014, 06:37 PM
So approximately $5B...
No, at least $20 billion with $4 billion deferred.

Quote:
 
I've already shown above why the $4B is not a deferral. The fact that it is happening every year means that on average when PIs sell there is a loss that has been partially funded by the taxpayer that will never be recovered. It also means that on average PIs never become positively geared prior to selling.
If there was no negative gearing, then the tax burden on the investor would be reduced later instead of being reduced now. Negative gearing simply defers the government's receipt of a small portion of the investor's total tax payment until later. When the tax does get received by the government later, it is accounted for under the income tax row in the table below (row 1).

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Row 1 is also where Capital Gains Tax and tax on rental income is accounted for.

This is all received by the government in addition to the $36 billion in property taxes accounted for in row 3.

That few billion can continue to be deferred every year, while the government also continues to receive that same few billion that was deferred from previous years, and it will be accounted for under income tax in row 1.
Edited by Shadow, 21 Aug 2014, 07:46 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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miw
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propertymogul
21 Aug 2014, 07:06 PM
Understand the difference? I think you do.

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.
There is no real difference. Your rates are calculated on the value of the land and are used by the council to perform the services the council is responsible for as well as for the cost of running council administration itself The amount of rates you pay is not directly connected to the cost of providing the services you specifically need.

Similarly, stamp duties are paid to the state govt based on the size of the overall transaction and are used to provide services for which the state government is responsible, as well as for the cost of administering stae govt apparatus. Once again without reference to the cost of providing the services which you individually receive.
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, 07:06 PM
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.
I can completely understand your argument about the rubbish removal charge being directly benefiting to the property investor.
However, lumping roads, parks, libraries, etc and claiming it directly benefits the property investor is too far.

Because it is no different to State spending the money on improving the state (state roads, education, hospitals, police, etc) and then claiming it directly benefits the property investor. Yes it does benefit all property owners in the state (who wants to live in a state with no police, schools or hospitals, right?) but claiming its a payment for direct services is taking it too far. Likewise with maintaining local roads, parks and libraries is providing for the wider community. The property investor just happens to be part of the community and thus indirectly benefits.

Do you understand the difference?

propertymogul
21 Aug 2014, 07:06 PM

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.


Likewise stamp duty doesn't go into federal and local council consolidated revenue. They are spent on services like stamping title transfers and maintenance of state roads and national parks. The only difference is I don't pretend if its at a local government level its a direct benefit to the property investor but at a state level, its not a direct benefit.
p.s. No one ever claimed council rates go to federal and state consolidated. You can debate it and disprove it all you want but that is the very definition of strawman argument.
Edited by Trojan, 21 Aug 2014, 07:43 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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skamy
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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 )
Pride and falls come to mind.

You do miss some subtleties in the debate and it makes you assume people are fools.

I may be an old bat but I am nobody's fool. Don't underestimate an old battleaxe with her crochet needles.

There are those on here like you who say look at these negative gearers, 74% of who are paupers earning under $80k a year, they are all bogan thickies (OK your term was dumb money). The old class systems never die for some people hey? Did you even realise that this is what you are saying?

Veritas misses this point completely. He has sold his left leaning principles to people who tell him that if we take away from Mum and Dad investors, young people will get a cheaper house. It is all rubbish of course, if anyone gets cheaper house it will be rich investors. The chances of anyone getting a cheaper house is next to zero in this recovery stage of the housing market, which is driven by sentiment more than anything. Apart from anything else he will probably soon be a Dad and he will have lost himself the opportunity to build wealth as he is not rich enough to cover losses for a few years. But he argues it is better that low income "dumb money" like his and that of other "bogan" Mums and Dads gets out of the market.

Roughly 30% of property has been owned by investors for decades, the only thing that has changed, with more widespread use of negative gearing, is the wealth of the individuals doing the investment.

If negative gearing is removed I doubt very much that we will see home ownership rates rise, they are already high by international standards and they are more likely to reduce than rise as the big cities like Sydney follow the pathways that big cities have followed for 100s of years.

All that will happen is that you will now have so called "intelligent" rich people with multiple IPs instead of your current so called "dumb money" Mum and Dad investors with an IP each.

It amazes me how supposedly left leaning people get drawn into spruiking for advantages for rich people, I see it over and over on here.

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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Massive
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must stop looking at all this nonsense....

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Veritas
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Trojan
21 Aug 2014, 07:16 PM
I can completely understand your argument about the rubbish removal charge being directly benefiting to the property investor.
However, lumping roads, parks, libraries, etc and claiming it directly benefits the property investor is too far.

Because it is no different to State spending the money on improving the state (state roads, education, hospitals, police, etc) and then claiming it directly benefits the property investor. Yes it does benefit all property owners in the state (who wants to live in a state with no police, schools or hospitals, right?) but claiming its a payment for direct services is taking it too far. Likewise with maintaining local roads, parks and libraries is providing for the wider community. The property investor just happens to be part of the community and thus indirectly benefits.

Do you understand the difference?
Huh?

The standard of council supplied amenities has a bearing on the marketability of the property.

Everyone living in a neighbourhood benefits from the presence of public facilities maintained through rates: parks, swimming pools, playgrounds.

That is very much a direct benefit to the landlord.

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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skamy
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propertymogul
21 Aug 2014, 06:57 PM
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.
Not good on subtleties are we propertymogul?

Show me how in my example given the purchaser had any extra cost at all on the home whether it was GST liable or not. Only the developer has to cover the cost of the GST liability.

Do the right thing for once and admit that my point is correct and represents the reality of the way the GST operates on new builds.

If all homes were GST liable then the purchaser would pay but they are not. Only new homes sold by developers have to pay GST. The purchaser pays the same regardless of the GST liability the developer does not.

If you are still incapable of understanding this, I don't recommend you try developing for a living, you will be laughed outta town if you try to charge your buyer 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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Oops hit reply instead of edit.
Edited by Trojan, 21 Aug 2014, 07:43 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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zaph
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propertymogul
21 Aug 2014, 07:06 PM
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.
they may as well in bne.
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Trojan
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zaph
21 Aug 2014, 07:45 PM
they may as well in bne.
Come to think of it, a disingenuous person could also argue federally collected GST ends up in 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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