Also talk of taking away assett protection in trusts,well, I think the government has to be careful befor they fiddle too much, the system is well entrenched and changing one thing, can have huge ramifications elsewhere.
Rise in interest rates will probably do more than anything else to slow investing and neg gearing.I for one don’t think they should or will abolish negative gearing. IMHO any time the government fiddles with a market to change it’s dynamics they just make things worse….for everyone. The suggestion it could be better spent to benefit the community is laughable. I work in government and see money wasted every day that could better benefit the community. Since I am in a govt slamming mood [
], have read of this I think it is a great article.http://www.smh.com.au/articles/2003/08/19/1061261153599.html
I will still consider IP, even -ve gearing is abolished…
I think, it is always a possibility for the government to head this way… especially if they see the numbers ($$$) that will go their way. Just look at CGT, before 1985 (?I think?) there’s no CGT and now it’s there… The government might introduce it the way they introduce CGT. This will have less drastic impact in the economy (cross your finger).
Anyway, this will just mean that anyone who will buy IP will need to make sure that they will make money from day 1 (or at the very least break even). This will also mean, weeding out most (if not all) of those scams that your average mom and dad fall into by going for -ve gering…
Hmm … does anyone think it may be political suicide? A lot of “mum & dad” investors I know, who have become a bit disillusioned with other forms of investing have used the equity in their home to purchase one or more IP’s in the hope that it may help them in their retirement. All I know rely on negative gearing to make it worthwhile! Most have bought quality properties, and in my opinion nowdays it is very hard to buy quality properties and be +ve geared! I tend to think a lot of “ordinary” Australians would be hurt!
Apprentice, you have a point about CGT. It is likely the tax deductions claimed will be in excess of $1 billion for the 2003 financial year. That’s a lot of bickies.
As an alternative the Govt may allow losses to be quarantined & offset against the gain when the property is sold.
The government doesn’t give away IP tax deduction claims for nothing. It takes back so much money in stamp duty, GST … It also generates heaps of work for building industry to the point where there is an acute shortage of trademen.
I know +ve geared property investment is a safer way to invest but I can’t find any around. I’m considering to sell my 2 -ve geared IPs to buy few +ve geared IPs but found it’s hard to find any around. I know there are plenty in country towns faraway but I want to see before I buy & I can’t travel much.
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], have read of this I think it is a great article.
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