The Forum > General Discussion > If we don't act, we are going to go broke.
If we don't act, we are going to go broke.
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In fact, many investors buy brand new so they can claim maximum deorectiation.
As for NG, I even suggested that perhaps there needs to be a 'return to profit' test, that basically states that the property purchased must be posetively geared within say ten years.
What this would do is eliminate the property banking that goes on whereby investors use built up equity in one proerty to fund the next, continually, eventuating in multiple properties all with a debt ratio of 80% and all receiving negative gearing benefits. Low interest rates have assisted this.
Another option is to implement laws that state that in order to receive NG credits, the loan must be P&I. This again would be a game changer but assist those who genuinely want to invest, but remove the property barrons who in my view do abuse the system.
I'm sure that was never the intention of negative gearing.