I don't see anything strange with tax minimisation. I see the issue with NG on existing property. It introduces extra money into the equation that shouldn't be there and causes a distortion.
If there was no distortion from NG, it could be painlessly removed tomorrow. This isn't the case.
Thats right. But you could put that to Shadow and some of the other bulls a 1000 times without getting them to agree to the blatantly obvious.
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
I'll take a bet that more than half of investors are still NGd when the next figures come out. It's likely to be alot more than that but I prefer a sure bet.
I'd say it's lower than that, and the average loss is much lower than $200 per week.
vdmruss
21 Aug 2014, 10:53 PM
If there was no distortion from NG, it could be painlessly removed tomorrow. This isn't the case.
I'd be happy for it to be removed. I'm not negatively geared.
John Frum
21 Aug 2014, 10:53 PM
It's precarious because the amount you can depreciate tapers off substantially over the years. From the ATO:
If you're struggling to stay CF+ now, it's not looking that rosy, especially considering that rents are beginning to slide.
Who is struggling to be CF+?
I don't see the relevance.
Whether I was CF+ or CF- I would still not choose to pay more tax than necessary.
Veritas
21 Aug 2014, 10:58 PM
Thats right. But you could put that to Shadow and some of the other bulls a 1000 times without getting them to agree to the blatantly obvious.
It wouldn't bother me if they said losses had to be quarantined.
In fact I'd be glad if they did it, as it might finally end the incessant bleating by you bears.
I'd say it's much lower than that, and the average loss is much lower than $200 per week. I'd be happy for it to be removed. I'm not negatively geared. Who is struggling to be CF+?
I don't see the relevance.
Whether I was CF+ or CF- I would still not choose to pay more tax than necessary.
The average loss may be lower. With all this investor mayhem going on in Sydney (and Melbourne to a lesser degree) we don't really see much of a change in the % of homes owned by investors. They just sell apartments to one another these days, so the investors you would expect to be positively geared are cashing in and selling to some other chump at crappy yields. Who knows, the next in line might eventually get some capital gains in the next leg up before selling in relief to another chump with stars in his eyes.
I'd say it's much lower than that, and the average loss is much lower than $200 per week. I'd be happy for it to be removed. I'm not negatively geared. Who is struggling to be CF+?
I don't see the relevance.
Whether I was CF+ or CF- I would still not choose to pay more tax than necessary.
You're the one who's trying to twist the argument into one about the morality of paying less tax, because you haven't got anything else useful to say. Like I said, I couldn't care less how much decide to claim, so long as the tax laws decree it kosher.
You're just trying to deflect the argument again because we're laughing at these tax minimisation strategies as though they'll somehow dull the pain of a crashing rental market or higher IRs. There's an order of magnitude difference in most cases.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
No - With that particular person it was simply throwing random words around. This wasn't an experienced investor, this was a person who was about to default on their family home and still wanted to buy an investment property - with no prior experience in property investment.
I don't see anything strange with tax minimisation. I see the issue with NG on existing property. It introduces extra money into the equation that shouldn't be there and causes a distortion.
If there was no distortion from NG, it could be painlessly removed tomorrow. This isn't the case.
+1
That's spot on, it's a distortion, the only way you an describe it really.
Without it investing would still exist but prices would not be so disproportionate to wages and investors would have to revert to more traditional means e.g. adding significant deposits to ensure the property they buy neutral or positively geared.
This will certainly see a reduction in investors but these will be replaced by renters becoming owners as there are a hell of a lot of renters like me waiting in the wings to become OO.
Bulls will argue that this would send prices sky high as renters fight it out to become OO and we'll end up in the same position but this is inherently wrong. Without this distortion market norms would return and prices will be dictated by income alone.
Morality is irrelevant. I haven't said anything about morality.
You must have a short memory. Let me remind you:
Shadow
21 Aug 2014, 10:59 PM
What's desperate about minimising tax? I only pay the tax I am required by law to pay.
Why do you deliberately choose to pay more tax than you are required to pay? Are you a charity or something?
I'll let you into a secret... the ATO doesn't think any more highly of you just because you choose to pay unnecessary tax.
I reckon you're a sucker for paying more tax than required!
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy