[I'm Batman]

Since the other thread is closed down and there is an article on smh I thought I should ask...

http://smh.domain.com.au/blogs/talking-pro...0417-1x50i.html

Dr Chris Martin, a senior policy officer at the Tenants' Union of NSW, says bluntly: "There's a bunch of things that could be done to negative gearing that would go some way to changing what it currently does to our housing system, which is screw up house prices and distort the rental market to the disadvantage of low-income renters.

This post has been edited by BabyJaguar: 19/04/2012, 04:48 PM

[JAPN2]

Over the years I have been a landlord and tenant. I have not seen any significant reduction in the price of property - either to buy or rent in fact its mostly headed north.

Yes, I think negative gearing advantages significantly those that can afford property and disadvantages those that can't without providing a lot more property to the market.

[follies]

Yes, more so they have to make it more difficult for overseas investors to buy and maintain Australian Property.

Rent is meant to be calculated as a week is equal to .1% of the value of the property, negative gearing instead of ending the shortage has just inflated value of the homes.

[JECJEC]

Depends what you mean by negative gearing and what you actually intend to repeal.

Are you specifically refering to making losses on property - and is that just residential or commercial.

Negative gearing doesn't just apply to property you can negatively gear a share portfolio. You can also make losses on a business - would they be impacted by the legislation? If you are in the business of buying and selling residential property or property development would it be OK to make a loss?

What mechanism would be used - losses are lost forever or quarenteed until profits are made?

But in a word no.

[BetteBoop]

What "bunch of things" does Chris propose?

I would be intrigued to know what expertise he has on the subject and how he knows how to fix the housing affordability problem when successive governments have tried and failed (including by removing negative gearing tax concessions) .

[JRA]

I have to agree, I would love to see what is repealed.

Any person who is running a business can offset losses against income. That is normal.

Are you suggesting the cost of running an investment portfolio or a business should not be offset against the income from that?

I believe there are just as many experts who say the opposite.

I think there are also a hell of a lot of experts that feel the number of people who think they are going to make money out of making a loss are going to be sorely disappointed.

[red_squirrel]

Yes I think so.

To paraphrase what I said in the other thread just before it got closed (nothing to do with other OPs topic).

I am a first home buyer - to be.
I can't buy a house because even though I have a sizeable deposit because a bank will only lend me so much. On nearly every property I have tried to buy in the last 6 years an investor has always come in with the last bid - just slightly higher than mine.

The price I was and am prepared to pay is always above market value (because I am desperate) but an investor always has more. They are able to borrow more because they use all their other interest only investments as backing. If the investors weren't there - I could buy a house.

When the paperwork goes through and the houses come up for rent they charge market rent - but this is almost nearly double what my mortgage repayments would have been! It's a lie that investors are providing cheap places for people to rent. If the investors would butt out, the 'poor people' could buy the house for themselves.

Investors only drive up the prices of the lower rungs of property. Most of the houses in my suburb are rentals. Most of which have been acquired in the past 10 years. I am very bitter at the government doing forcing my family to live as I do.

I'll end my ranty mcrant now.

Negative gearing should only apply to new properties, not established houses.

[BetteBoop]

red squirrel, I see your point but that's only looking at the effect on you.

What happens to people who don't have a deposit, can't afford to buy even if prices are more affordable or simply don't want a mortgage?

If investors leave the market in droves, if the price of houses drop then the laws of supply and demand suggest rents should skyrocket. The law of physics says for every action, there is an equal opposite reaction.

Doesn't that mean renters are subsidising your ability to buy? What do they get from the scenario?

[Canberra chick]

When I arrived here and heard about negative gearing for home loans i was astonished. It is plain that it drives up prices and makes it harder for owner occupiers to get on the first rung of the ladder of opportunity.*

*anyone see what I did there? Reference to the last person who suggested scrapping negative gearing for property owners...

[JRA]

I think "let's cut negative gearing" is also overly simplistic.

What about the 50% reduction for cgt.

Generally if they cut negative gearing, one would think selling your own home would gain CGT. Would that be fairer? And without the 50% reduction.