Dear Hasbeen,

I understand very well that bad habits are difficult and painful to change. However, this habit of borrowing money is relatively young, 20th century stuff.

In the good old days, families accumulated the money to pull projects together, which worked well. This isn't of course the only way - nothing prevents even people who are not blood-related from coming together with their savings to create bigger projects.

I have no clue how you came to such idea as if I want to ban private business.

While adjusting to healthier ways may produce a jolt, I am not saying that borrowing will suddenly stop altogether, only that the interest-payments should not be recognized as a tax-deduction: consider that alongside the introduction of a simpler flat tax margin (say 30%), removing the higher tax margins, and you will find that it isn't such a bad deal for businesses after all.

Abolish negative gearing and there won't be any investment in housing.The real problem is that Govt is using housing as a cash cow.They are restricting supply of land thus keeping prices high and have taken any motivation for developers to build more accommodation via fees,charges and taxes.

At every level from Council,State and Federal,Govt is milking the system to fund waste and bloated bureaucracies.

Just a random observation.

"Property is run at a net loss when interest payments and property-related expenses like repairs and maintenance exceed rental income"

Very true.

But bear in mind, that those expenses, as well as the interest payments, are real money.

Without an incentive to the landlord to incur that loss, rents would have to rise, and/or the property would lack repairs and be under-maintained.

So the taxpayer is in effect feeding money directly into the tenants' bank accounts, as well as supporting the quality of their living environment.

How considerate of us.

Yuyutsu in those same good old days the average family could not aspire to home ownership. This was despite the fact that houses were much cheaper. 5 years of average net income, [not gross] was enough to buy a home.

They were not mansions as today, but they were adequate. I'm not sure if my kids would be prepared to live in my first home. Just one bedroom, & 80 years old, it was bought for cash, & cost just 2 years of my net income, & that was in Sydney.

I do recall even 50 years ago, the average building tradie had little chance of owning a home, even if the prices were lower. Their low wages contributed to low house prices.

Today it is only borrowing that gets a kid some equity. Two of mine, got into home ownership as soon as possible. Now still under 30, they have equity above $300,000. The middle one, shunted around the country by his employment did not want to rent something out, so did not buy. He is a couple of hundred thousand dollars poorer than the others because of that.

So, although I personally have not borrowed money in 30 years, I believe, done intelligently it probably necessary to get any where for ordinary folk.

All that nonsense could be done away with by introducing flat tax. But, unfortunately, many people don't want fairness, they just want to make more at everyone else's expense.

So the author and his supporters of his quest need to ask themselves one very, very important question.

WHERE WILL PEOPLE LIVE!

If you take away the reason why so many invest in property, they will simply stop investing.

BTW, the majority of property investors hold their assets in either trusts or companies, so there is little to right off against ones personal income tax.

Now on the other hand, if you own property ( rentals) in your personal name you are taking a huge risk with landlord exposure issues.

Of cause you can try to tell me why investors will continue to provide affordable housing, without tax deductions, as rents would need to be at least 8to 10% income to value, as they were.

This would mean most rents would increase by at least 120%, but of cause that won't happen, so the alternative would be not to invest in rentals.

But as I always say when this topic gets a run, be careful what you wish for, as you may just increase the rate of homelessness.

I doubt anyone would want this outcome.