A few things about negative gearing,

The problem is property is state based legislation (rather than federal based like financial planning) so we have many cowboys ripping off buyers and lending when they can't afford it. Federal law and under the control of ASIC would help stop a lot of property spuking.

Secondly, neg gearing if only on new homes would cause an increase in costs for new home buyers. As established houses would lose value, the demand from investors would dry up, very few homes would be built, meaning thousands unemployed, huge increase in rents, (as demand exceeded supply), as competition wains, builders can and would charge more.

Housing affordability is controlled by the state governments, if more land was released and stamp duty reduced, more houses would be affordable. But no, the state governments are addicted to stamp duty as drugs to a dealer.

Thirdly, if neg gearing benefits are reduced, less people would buy an investment property, meaning a higher demand for public housing (which state govts cant afford now), so landlords would increase rent, hitting the lower income people even more.

Negative gearing is not just for the rich, anyone can do it (with as little as $2000 into a share or property trust) So , stop blaming people who want to improve their wealth, help housing, help the building industry (our biggest employer) and help the governments (stamp duty GST, payroll tax, income tax)

And finally of the 160 politicians in Canberra, 138 have investment properties (the greens have an average of 3 each), so are they going to vote for something that will make them pay more tax?

Lies, lies and damn statistics! Over and over we're told how many mums and dads have modest investments in negative geared residential investments. Simply put, these arrangements will be grandfathered, and therefore will experience no real change except perhaps the value of those holdings won't rise as quick? Hardly a problem when the only real capital outlay has been a cash deposit, with tenants and the taxpayer paying for everything else?

And allowing those who have only ever invested hundreds, to reap multiple hundreds of thousands as the takeaway profit.

As for most folks who own just the one home?

If prices do go down so will the replacement when it comes time to move, which almost always happens, when the family moves on and the house and environs just becomes too big! If house prices decline, so will future recurrent payment on mortgage bills, household insurance, rates and stamp duty, and indeed the ubiquitous cascading GST?

And if moving all future negative gearing to brand new never occupied housing then increases demand in that sector, the first intended consequence will increase overall economic activity, jobs, long overdue decentralization and growth?

How can any of that be portrayed as a negative? "Lies, lies and damn statistics"! Quote unquote.
Rhrosty.

If there is little or no incentive to invest into housing, prices will drop but rents will increase (lack of supply)

If I follow Bill Shorten's idea, I buy a brand new property for say $500k, I get neg gearing benefits for 5 years. When I go to sell, future investors would not be interested in buying my second hand home (as no neg gear benefits), so my only market is new home buyers or people wanting to upgrade. As I am now competing with thousands of other people who have neg gear properties trying to sell, its a buyers market, prices fall. So I have to sell at $400k.

Why would you in the first place invest into property knowing in 5-10 years time you will make a capital loss?

So, knowing prices will fall and I will make a loss, I'm going to invest elsewhere. So no new home is build, more unemployment and higher rents.

Thousands don't invest in property for the rental returns, they invest for capital gains. No capital gains, no investment.

If you buy a $500,000.00 investment house, the capital outlay will be the deposit $50,00.00 plus legals and stamp duty and GST where applicable.

Now the rent will around $500.00 a week or $25,000.00 a year gross? And given you have negatively geared, all your actual capital outlays back in the first five years?

And given rents increase over time.

In twenty years time the property will be paid for and likely worth somewhere north of a mill? That's not a bad capital gain on an outlay of less than 10% of that!

Now suppose you sell that one and buy 5 more brand new houses, with around half of the proceeds as your deposit, stamp duty, what have you, and negatively gear, the tenants will pay down the new debt. And the bank balance would have swelled by half a mill as well?

In another twenty years you will likely be able to sell all five for a grand total of around ten mill? Now that is what I call a capital gain!

And all on the back of your very modest once only initial capital outlay 40 years prior! And a very reasonable retirement nest egg!

Simply put, the sky won't fall in with these mooted changes the only difference, greater demand for new housing?

If you just want to buy an investment house and the NSW government are doing the usual and dragging their heels, come up to the sunshine state, where you won't have to wait anywhere near as long nor stump up as much as your deposit!

And where a debt free, local builder can build you a steel frame house ,with a fifty year structural guarantee! The old house you might have invested in down there may have dry rot, termites or asbestos and be in need of a major rebuild?
Rhrosty.

Egad, but those Landlords must be rolling in filthy lucre and taking cruises very often, Regent's Seven Seas Cruise would be barely adequate, one imagines.

Whereas most landlords I've met do not have anywhere near the free time and quality of life enjoyed by their tenants. They always seems to be dressed very moderately (if they ever get out of their after hours working gear) and drive older, common, vehicles too. Always getting those after hours calls for tradesmen, urgent, especially from cob Friday through the weekend.

It is different for politicians, whose renter is in fact the property owned by their partner, that they use along with other pollie mates (who pay rental) while getting paid travel allowances by the taxpayer.

Want to save some real money? Cut down on the overseas travel by pollies. What about pollies' super? Cut it! Too easy.

Want to take pressure off housing prices? Cut down on immigration. Too easy.

You can always trust a politician to be throwing up distractions to avoid taking any responsibility.

Labor's Shorten is the master of the political distraction, but then so are his Shadow Ministers who are too damned lazy and busy enjoying their parliamentary entitlements to propose alternative policies. No hard yards for them!

Previous Labor Leader Mark Latham could add 'negative gearing' to his list of Labor distractions,

http://tinyurl.com/Labors-distractions

<FORMER Labor leader Mark Latham has slammed his party’s “obsession” with gay marriage saying it should focus on the nation’s “Struggle Streets” instead.

He told 3AW radio Bill Shorten’s private members bill to push for changes to the marriage act to allow same-sex couples to tie the knot, to be introduced into parliament on Monday, was nothing more than a symbolic gesture.

He said the biggest social issue facing Australia was unemployment, drug use and homelessness in suburbs such as Mt Druitt which was the focus of the SBS documentary, Struggle Street.

“If you are interested in equality and social justice in Australia then what was the really big event in the month of May,” he said. “We had the Struggle Street documentary which revealed that in the nation’s public housing estate, most notably in Mt Druit people live in conditions that you wouldn’t wish upon your dogs. Absolute chaos, despair and hopelessness in their lives.

“And surely, you would have expected a serious national response from the party of social justice?

“We didn’t hear anything.

“They’re obsessed, instead, by gay marriage.”>

Gay marriage, republic, 'negative gearing', these are all distractions. Anything but shirt-front the CFMEU and other union bosses who are running the Labor Party and were criticised in the Royal Commission into unions.