Poll: Would you be impacted if negative gearing on existing homes was scrapped?

Hi Cattleya,

“how does scrapped negative gearing present great opportunity? Is that because prices are expected to fall?”

Since it is a poll, it is up to you to choose if you think it might benefit you.

One possibility I can see is if it is to be scrapped by some date in the future (July 2017?) then there is going to be a scramble to buy so that your IP is “grandfathered” as a neg geared property. That will create a short-term opportunity for some – e.g. for those wanting to “cash out” of their portfolio as they retire. The loomng date will likely create a short-term boom, and a lift in selling price for second-hand properties.

At the end of that time, there will be much “Sitting on hands” from some investors as, once they sell, they will be buying anything secondhand as a “non-negative geared IP”. Hence less selling of existing property and more buying of new ????? Over time, of course, things will settle down and the “new normal” will be created.

But then, YOU might be a developer who is building new – and the talk is that “negative gearing WILL be allowed on new property” so you could be gearing up to commence selling your newly-developed properties to investors as well as the usual home buyers (i.e. your base to sell to has GROWN as investors who want to neg gear MUST now buy new). This hiatus allows you time to prepare to take maximum advantage of the impending shift by perhaps locking in more purchases for subdivision, perhaps looking for investing partners, etc.

Such a big change will impact tens of thousands – some will be winners from it I’m sure….. Is that you? ;)

Benny