107
Greens decry property tax breaks costing 78 times what Labor proposes to spend on social housing
(www.theguardian.com)
this post was submitted on 03 Aug 2023
107 points (99.1% liked)
Australia
3582 readers
66 users here now
A place to discuss Australia and important Australian issues.
Before you post:
If you're posting anything related to:
- The Environment, post it to Aussie Environment
- Politics, post it to Australian Politics
- World News/Events, post it to World News
- A question to Australians (from outside) post it to Ask an Australian
If you're posting Australian News (not opinion or discussion pieces) post it to Australian News
Rules
This community is run under the rules of aussie.zone. In addition to those rules:
- When posting news articles use the source headline and place your commentary in a separate comment
Banner Photo
Congratulations to @[email protected] who had the most upvoted submission to our banner photo competition
Recommended and Related Communities
Be sure to check out and subscribe to our related communities on aussie.zone:
- Australian News
- World News (from an Australian Perspective)
- Australian Politics
- Aussie Environment
- Ask an Australian
- AusFinance
- Pictures
- AusLegal
- Aussie Frugal Living
- Cars (Australia)
- Coffee
- Chat
- Aussie Zone Meta
- bapcsalesaustralia
- Food Australia
- Aussie Memes
Plus other communities for sport and major cities.
https://aussie.zone/communities
Moderation
Since Kbin doesn't show Lemmy Moderators, I'll list them here. Also note that Kbin does not distinguish moderator comments.
Additionally, we have our instance admins: @[email protected] and @[email protected]
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
How would you get rid of negative gearing? You couldn't do it instantly, all at once. People have made financial decisions based on it. You could say "no negative gearing on properties purchased after 2023", but then you would still have a huge problem of existing negative gearing. You could phase it out. Limits on how much you can negative gear that reduces every year, going to zero in 20 years.
Give until the end of the financial year. Negative gearing is a speculative investment, if you’re negative gearing your only residence then more fool you.
It's a funny beast, but I don't know that getting rid of it is the right call. I don't think it'd chage anything much:
Ms Jones has a house that she leases out to tenants. The interest on the mortgage and costs on the hosue amount to more than she collects in rent. That difference is tax deductible under the status Quo (Negative Gearing). The law changes, and you can no longer negatively gear property.
Ms Jones starts a new company (TotesLegitLandlord inc) and sells her property to this company that she happens to own. This company leases out a house to tenants. The Interest on the business loan and the costs on the house amount to more than the company collects in revenue. The company makes no profits and pays no tax.
Negative Gearing just makes this whole process easier for everyone. Tax returns are easier and the ATO isn't reviewing several thousand small businesses that are leasing out properties at a loss. It's a bogeyman talking point getting us arguing with each other while Billion-dollar companies transfer all their profits off-shore and pay no tax. That's the scandal that we should be marching in the streets over.
That’s why you also need to reform the corporations act to ban corporate ownership of residential real estate.
I think if the company makes no profit and pays no tax that's fine. The problem people have with negative gearing is that it offsets non investment income. So Ms Jones now pays less income tax on her salary.
It offsets personal income by the difference between what the property costs and what it brings in for rent. We need an accountant to chime in here. If Ms. Jones invests money into her business to keep it going (since costs are outweighing income), is that money still income? Or would it be deductible as well?
Either way, that amount isn't a going to be more than the rental income. And under either model the rent income isn't taxed until the property is generating more rent than its outgoings. Once that happens, it's time to buy the next property and go back into the red. It feels like s ponzi scheme, doesn't it?
I see the problems. I just don't know how to fix them.
You don’t seem to see the problem at all, the goal of removing negative gearing is to force people to sell, what that means to their personal finances is immaterial
I don't see how to remove negative gearing. Any political party who even mentions it is immediately unable to form government. Mr Shorten pledged to overhaul Negative gearing during the 2019 election and was quickly trounced, despite the Liberal party being in a shambles at the time.
I also don't see how it is going to make that much difference to the people we want. I don't know how many properties my own landlord owns, but I know it's more than three. Those are the people we want to urge to sell. Negative Gearing just isn't that large a factor in his finances. In his world, the rent collected is his income. Take Negative Gearing away and he just does the 'Landlord inc' company route. Rent collected is company revenue, ponzi scheme continues as his 'company' buys properties and makes no profit.
Companies are not allowed to trade insolvent. That’s supposed to,prevent that kind of behaviour, too.
However, I agree, people should have the same access to offset genuine losses as companies do.
Similarly, companies should be paying gst. We could make the gst refundable on their primary product. Eg if you make steel, for instance, the raw ingredients should be claimable, but why is the computers you buy, the chairs you sit on, the door, the factory structure, the plumber who rises the toilet etc etc all claimable for a business but not a person?