Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 7
The British are ditching negative gearing; Some old news that I'd just missed maybe?
Topic Started: 23 Aug 2015, 05:21 PM (5,568 Views)
The Whole Truth
Member Avatar


:lol :lol Classic, thanks golly

"I am thinking of going back to Charters Towers," he said.

"I can't take this much more, it's not worth it."

For other residents of the Depot Hill area like Eric Dare this is the ninth time he has experienced a flood.

Mr Dare said he had lived in the area for 34 years now.

"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


The Whole Truth
25 Aug 2015, 12:23 AM
:lol :lol Classic, thanks golly

"I am thinking of going back to Charters Towers," he said.

"I can't take this much more, it's not worth it."

For other residents of the Depot Hill area like Eric Dare this is the ninth time he has experienced a flood.

Mr Dare said he had lived in the area for 34 years now.

Is that a photo of Franks new springboard Mr Cox is looking at?
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


Ex BP Golly
24 Aug 2015, 10:56 PM
"Subsidy
DEFINITION OF 'SUBSIDY'
A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public.

Politics play an important part in subsidization. In general, the left is more in favor of having subsidized industries, while the right feels that industry should stand on its own without public funds."

http://www.investopedia.com/terms/s/subsidy.asp#ixzz3jjUNYED2


I know it is hard for you to reverse the old left/right political belief system, but you sir, are a welfare beneficiary.
Great way to cherry pick.

Back to licking windows for you!
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

Profile "REPLY WITH QUOTE" Go to top
 
Ex BP Golly
Member Avatar


stinkbug
25 Aug 2015, 07:46 AM
Great way to cherry pick.

Back to licking windows for you!
Why do you think a Welfare cheeting scumbag can upset me?
Edited by Ex BP Golly, 25 Aug 2015, 08:53 AM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
Profile "REPLY WITH QUOTE" Go to top
 
stinkbug
Member Avatar


Ex BP Golly
25 Aug 2015, 08:53 AM
Why do you think a Welfare cheeting scumbag can upset me?
I've upset you on more than one occasion before, so I figure you have form.

Besides, I get actual welfare, so I don't need to call my tax breaks welfare to not feel left out.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


Count du Monet
23 Aug 2015, 08:47 PM
This is nothing to do with negative gearing, in fact this is worse than negative gearing. Even if negative gearing was removed in Aus, interest payments are still deductible against rental income.

But this move is brilliant, allowing people to claim interest payments as a tax deduction is wrong altogether under any circumstances.
Correct. This has nothing to do with negative gearing.

I can see the system working with and without interest payments being tax deductible. If interest is not tax deductible, then naturally yields will increase through rent rises and price falls until "buy to let" becomes viable as a cash investment. 10% gross yields are probably where it would settle out.

What I don't like about the change is how quickly it is being introduced. It will unfairly punish a lot of people who have done nothing wrong and provide an absolute windfall to the cashed up. The inevitable price drops will also leave some OOs underwater.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
The Whole Truth
Member Avatar


Rents are fixed by supply/ demand fundamentals and capped by incomes. 10% ? Not likely here with current prices but if house prices were to drop by 60% that figure would be attainable.
Edited by The Whole Truth, 26 Aug 2015, 04:00 PM.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


Count du Monet
24 Aug 2015, 05:37 PM
I don't know about that, but the ability to reduce ones tax bill by borrowing money is. If a person or company borrows heavily why does that entitle them to a tax break?
Actually, if the aim of borrowing money is to reduce your overall tax bill, then the interest is by definition not deductible. Borrowing money increases the tax paid over time but shifts the tax until later. In the meantime the govt collects tax on the interest from the lender, so it wins coming and going.
The Whole Truth
26 Aug 2015, 04:00 PM
Rents are fixed by supply/ demand fundamentals and capped by incomes. 10% ? Not likely here with current prices but if house prices were to drop by 60% that figure would be attainable.
10% gross yield is the norm in the country where capital gains are low to non-existent and very common indeed in the US where only professional landlords can deduct interest costs from their income. In fact, 10% was quite common in Australian cities before the banking reforms in the 1980s that allowed people to borrow money to buy investment properties.

I'd say 10% gross yield would become pretty standard if mortgage interest were not deductible. The price of rental stock would drop and rents would go up. I'd say prices at the low end might drop 30% while rents went up 30% in pretty short order. Of course this would mean building activity at the low end would cease immediately.

If you stopped calling interest a deductible cost across the board, essentially you would be almost doubling the cost of debt while not increasing the cost of equity. Asset prices would collapse, but so would the money supply and only people who already had assets would have a chance of ever owning them because all their income would be spent paying for the use of other people's assets. Welcome back to feudalism.

Edited by miw, 26 Aug 2015, 05:04 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
Loki
Member Avatar


miw
26 Aug 2015, 04:41 PM
10% gross yield is the norm in the country where capital gains are low to non-existent and very common indeed in the US where only professional landlords can deduct interest costs from their income. In fact, 10% was quite common in Australian cities before the banking reforms in the 1980s that allowed people to borrow money to buy investment properties.

I'd say 10% gross yield would become pretty standard if mortgage interest were not deductible. The price of rental stock would drop and rents would go up.


10% gross yield is common wherever houses are affordable. Only the very worst subprime creditors and people who were only somewhere on a temporary basis would need to rent in the US before the housing boom. Everybody else just purchased, because houses were cheap relative to incomes and you could lock in a fixed interest rate for 30 years.

Quote:
 
I'd say prices at the low end might drop 30% while rents went up 30% in pretty short order. Of course this would mean building activity at the low end would cease immediately.
That's an easy problem to solve, you change the way that the cost of land development is paid for. Instead of paying for all land improvements up front, you finance it over 20 years. Then land prices decline and developers can make money again, even at 30% lower prices.
Quote:
 
If you stopped calling interest a deductible cost across the board, essentially you would be almost doubling the cost of debt while not increasing the cost of equity. Asset prices would collapse, but so would the money supply and only people who already had assets would have a chance of ever owning them because all their income would be spent paying for the use of other people's assets. Welcome back to feudalism.
In the modern world when that happens, people emigrate or stop having children. Within a single generation demand collapses and with it rents.


“Talk sense to a fool and he calls you foolish.” - Euripides
Profile "REPLY WITH QUOTE" Go to top
 
miw
Member Avatar


Loki
26 Aug 2015, 07:12 PM
10% gross yield is common wherever houses are affordable. Only the very worst subprime creditors and people who were only somewhere on a temporary basis would need to rent in the US before the housing boom. Everybody else just purchased, because houses were cheap relative to incomes and you could lock in a fixed interest rate for 30 years.
Cool story bro, but totally without basis in the hard numbers. From what you's expect, you'd expect the US to have a higher home ownership rate than places where interest on mortgages is deductible. In fact there is no discernable relationship. The UK, Australia and New Zealand have higher (albeit similar home ownership rates to the US, yet interest on rentals is deductible. Germany has a much lower rate, and interest is deductible there as well.

Homes in the US affordable? depends where you want to buy. Nobody would call San Francisco, Boston, LA or even most of North Carolina affordable. Detroit city on the other hand is as cheap as chips. It's all over the place.

The one thing that is pretty constant across the US is that rents are a much bigger proportion of property values than they are in Australia because the landlord needs to extract a bigger percentage from the tenant in order to have a viable business.

Quote:
 

That's an easy problem to solve, you change the way that the cost of land development is paid for. Instead of paying for all land improvements up front, you finance it over 20 years. Then land prices decline and developers can make money again, even at 30% lower prices.


Financed over 20 years with non-deductible interest no doubt. I don't see how this changes the equation at all. Happy for you to show us a worked example, though.

Quote:
 

In the modern world when that happens, people emigrate or stop having children. Within a single generation demand collapses and with it rents.


On the contrary it forces an underclass to go live in trailer parks where they breed like flies.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Fully Featured & Customizable Free Forums
Learn More · Sign-up for Free
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 7



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.

For more information go to Limitations on Exclusive Rights: Fair Use

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