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This says it all; Nothing is more sacred than property
Topic Started: 25 Oct 2016, 04:01 PM (3,509 Views)
Chris
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We would do this to save 1.2 Bil l:

http://mobile.abc.net.au/news/2016-10-24/paid-parental-leave-nick-xenophon-team-to-decide-fate-of-scheme/7960444?pfmredir=sm

But we will do nothing to touch the tax draining rort of NG??

From an outsider looking in it is sheer madness.
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Rufus
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Chris
25 Oct 2016, 04:01 PM
We would do this to save 1.2 Bil l:

http://mobile.abc.net.au/news/2016-10-24/paid-parental-leave-nick-xenophon-team-to-decide-fate-of-scheme/7960444?pfmredir=sm

But we will do nothing to touch the tax draining rort of NG??

From an outsider looking in it is sheer madness.
Chris this has nothing to do with property?

BTW NG isn't a tax deduction. It is a description of a scenario where losses exceed income.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Chris
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Rufus
25 Oct 2016, 07:57 PM
Chris this has nothing to do with property?

BTW NG isn't a tax deduction. It is a description of a scenario where losses exceed income.
It is a tax deduction that benefits those on the highest income.

We have been through this time and time again, don't belittle your own intelligence by reeling off misleading propaganda and rubbish like 'most investors earn $80k or less'.

We have discussed the 'taxable income' scenario these figures are based on numerous times, it would be embarrassing to watch you try and perpetuate that lie any further.
Edited by Chris, 25 Oct 2016, 08:34 PM.
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Rufus
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Chris
25 Oct 2016, 08:33 PM
It is a tax deduction that benefits those on the highest income.

We have been through this time and time again, don't belittle your own intelligence by reeling off misleading propaganda and rubbish like 'most investors earn $80k or less'.

We have discussed the 'taxable income' scenario these figures are based on numerous times, it would be embarrassing to watch you try and perpetuate that lie any further.
I'll try to explain it.

If I you had a property that earns $25K per annum, but interest, costs, plus depreciation total $26K pa then that property is negatively geared by $1000 pa.

So you lodge your tax return declaring wages of $80K which is then reduced to $79K pa with the $1000 tax loss.

IF we get rid of NG.

You still lodge your tax return for $80K but it doesn't get reduced by $1000. Instead that $1000 tax reduction gets carried forward until rents increase.

Say in 7 years the rents have now increased to $29K pa and the costs are still $26K pa then that $3000 profit is written off against the losses carried forward.

Effectively getting rid of NG just changes the timing of the tax deduction benefit. It would favour the wealthy who don't have cash flow issues, but not much else would change. A higher % of IP's would be held by wealthy investors rather than mum and dad investors, but otherwise no changes.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Terry
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Rufus
25 Oct 2016, 08:46 PM
I'll try to explain it.

If I you had a property that earns $25K per annum, but interest, costs, plus depreciation total $26K pa then that property is negatively geared by $1000 pa.

So you lodge your tax return declaring wages of $80K which is then reduced to $79K pa with the $1000 tax loss.

IF we get rid of NG.

You still lodge your tax return for $80K but it doesn't get reduced by $1000. Instead that $1000 tax reduction gets carried forward until rents increase.

Say in 7 years the rents have now increased to $29K pa and the costs are still $26K pa then that $3000 profit is written off against the losses carried forward.

Effectively getting rid of NG just changes the timing of the tax deduction benefit. It would favour the wealthy who don't have cash flow issues, but not much else would change. A higher % of IP's would be held by wealthy investors rather than mum and dad investors, but otherwise no changes.
Oh, that's cool. Imagine if you could claim future costs and not pay any income tax at all in the current period.
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Chris
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Rufus
25 Oct 2016, 08:46 PM
I'll try to explain it.

If I you had a property that earns $25K per annum, but interest, costs, plus depreciation total $26K pa then that property is negatively geared by $1000 pa.

So you lodge your tax return declaring wages of $80K which is then reduced to $79K pa with the $1000 tax loss.

IF we get rid of NG.

You still lodge your tax return for $80K but it doesn't get reduced by $1000. Instead that $1000 tax reduction gets carried forward until rents increase.

Say in 7 years the rents have now increased to $29K pa and the costs are still $26K pa then that $3000 profit is written off against the losses carried forward.

Effectively getting rid of NG just changes the timing of the tax deduction benefit. It would favour the wealthy who don't have cash flow issues, but not much else would change. A higher % of IP's would be held by wealthy investors rather than mum and dad investors, but otherwise no changes.
Very very fluffy Peter.

Are you suggesting the average investors only writes of $1,000pa in rent Vs interest costs?

Are you suggesting that investors can wear the shortfall in expenses until they can be written off on future profits?

Let's not live in the fanciful Pete, NG numbers would not rising in such significant numbers if it wasn't essential for investors in this country to function. How many more NG have entered the market last FY?

You are doing your best to perpetuate a myth Pete, I admire your gumption but I personally don't think it does anything for your rep.
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Terry
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Chris
25 Oct 2016, 09:13 PM
Very very fluffy Peter.

Are you suggesting the average investors only writes of $1,000pa in rent Vs interest costs?

Are you suggesting that investors can wear the shortfall in expenses until they can be written off on future profits?

Let's not live in the fanciful Pete, NG numbers would not rising in such significant numbers if it wasn't essential for investors in this country to function. How many more NG have entered the market last FY?

You are doing your best to perpetuate a myth Pete, I admire your gumption but I personally don't think it does anything for your rep.
NG is an excellent example of the application of nudge theory. In a bygone error, it had a practical application in promoting housing supply and encouraging investment. These days, it's more appropriate as a carrot dipped in molasses.
Edited by Terry, 25 Oct 2016, 09:22 PM.
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Rufus
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Chris
25 Oct 2016, 09:13 PM
Very very fluffy Peter.

Are you suggesting the average investors only writes of $1,000pa in rent Vs interest costs?

Are you suggesting that investors can wear the shortfall in expenses until they can be written off on future profits?

Let's not live in the fanciful Pete, NG numbers would not rising in such significant numbers if it wasn't essential for investors in this country to function. How many more NG have entered the market last FY?

You are doing your best to perpetuate a myth Pete, I admire your gumption but I personally don't think it does anything for your rep.
I was just explaining how it works Chris.

Clearly you didn't understand the explanation.
Take risks - if you win you will become wealthy, if you lose you will become wise
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herbie
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Chris
25 Oct 2016, 09:13 PM
Are you suggesting that investors can wear the shortfall in expenses until they can be written off on future profits?
Whether you realise it or not Chris(?), that question of yours indicates to me that at a pretty fundamental level you concur with Rufus' statement that "A higher % of IP's would be held by wealthy investors rather than mum and dad investors" - With 'wealthy' investors being able to wear the initial losses whilst 'mum and dad' investors are way less likely to be able to.

Hmmm - "IP's"? - Damn, Rufus put an (or should it be "a" ... :) ) apostrophe in a (or should it be "an" ... :) ) wrong place ... Nah, nah - Rufus is a screw up; Rufus is a screw up - Nah, nah! ... LOL
Edited by herbie, 25 Oct 2016, 09:43 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Jon Snow
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Rufus
25 Oct 2016, 08:46 PM
I'll try to explain it.

If I you had a property that earns $25K per annum, but interest, costs, plus depreciation total $26K pa then that property is negatively geared by $1000 pa.

So you lodge your tax return declaring wages of $80K which is then reduced to $79K pa with the $1000 tax loss.

IF we get rid of NG.

You still lodge your tax return for $80K but it doesn't get reduced by $1000. Instead that $1000 tax reduction gets carried forward until rents increase.

Say in 7 years the rents have now increased to $29K pa and the costs are still $26K pa then that $3000 profit is written off against the losses carried forward.

Effectively getting rid of NG just changes the timing of the tax deduction benefit. It would favour the wealthy who don't have cash flow issues, but not much else would change. A higher % of IP's would be held by wealthy investors rather than mum and dad investors, but otherwise no changes.

Except that ... a corporation cannot run one business at a loss to offset revenue from a second business, but an individual can.

A business has to be run as a going concern, but personal income apparently does not.

The point of NG, therefore, is to defray the holding cost of investment property while you wait for a capital gain.

In other words, it drives price speculation.
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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