There is no reason to treat property investment any different to any
other business.
Every business is entitled to offset its interest payments and other
operating expenses against its income.
To deny that to one form of business would just cause an exit from that business.

In Perth rents have risen enormously as demand has outstripped supply due to people moving there in large numbers to enjoy WA's stronger economy.

Given what others and I have written about illusory resources that can be put towards building public housing to replace private investment, it's pretty clear that the theory of rents not being affected by removing negative gearing has a big hole in it as demand would outstrip supply before long.

Bazz, is correct in his last post. Would the author suggest that negative gearing on ALL investment classes be removed? If that happened, would people risk investment as much? If not, this would have major economic consequences. Would the author care to think this through and perhaps join in this thread to counter points made against his thesis?

The author should

and i will shift my capital
ben gershon,
that is the kind of challenge I'd like to see people actually take up. It would sort the market alright. It's like the much used argument of the brain=drain. Let people take it on & see how their managing capabilities shine rather than simply exploiting loopholes.
By a lot of people having less many could have more. That would stimulate the economy a lot more & for longer than those money wasting idiotic packages.

Individual: "By a lot of people having less many could have more"

Abolition of NG will not ultimately provide money to the public coffer because interest paid can be written off against capital gain if it can't be written off against income. Furthermore, capital losses can be carried forward and written off against future capital gains.

If you want to legislate that income or capital losses cannot be written off for housing investment alone, either within a tax year or by carrying them forward, watch as new construction grinds down almost to owner-occupier dwellings only, population grows, and competition for rentals increases causing rents to rise. Rising rents may entice a few more investors back but not enough to stop Gov't being forced to provide more rental subsidies or provide more public housing.

Any legislation to be fair should only affect new investors, as was the quarantining of interest deduction from 1985-7. This legislation allowed undeductible interest losses in a tax year to be deducted from future taxable income, so a return to this would not ultimately see the public purse gaining from the exercise.

If you want to legislate that income or capital losses cannot be deducted on any class of investment, either within a tax year or by carrying them forward, fewer will invest as much as they do now as they will not borrow as much, for housing or any other investment. This will lead to a large reduction in new construction with consequent higher rents as housing demand outgrows supply.

Regardless of whether interest deductions can be carried forward or not, rents would rise and the billions claimed to be raised for Gov't investment in public housing would not eventuate.

as new construction grinds down almost to owner-occupier dwellings only,
Luciferase,
That doesn't actually sound too bad to me. It would be one way to curb the excessive excesses in our society which are of course the cause of much of the pollution & economic difficulties. In plain English it would mean living within your means without owing 20 times the total value of your country plus our descendants would have a life to look forward too also.
renting accommodation in my opinion should only be down to motel/hotel rooms. The present housing retail circus doesn't at all contribute to bettering the economy when everything is borrowed. We in fact have only a negative economy because hardly anyone owns anything. I'd hazard a guess that Australia owes more than it owns.

yes i will shift my capital .as i have the ability to look after myself and my family .so then i can help others that might need a hand.government can only do so much .

ben