Beach, find me a property, in a suburban area, that has not seen a significant rise in value over the past twenty years.

I have bought and sold many properties, my first being my 1st home in 82.
82, cost $39K, sold in 90 for $82K, current val CV $390K
90, cost $110, sold in 98 $225, CV $900K
94, cost 186, sold in 99 $227, CV $1.2 mil
95, cost $72, sold 99 for $76, CV $295
2001, cost $280,vc $600K+

About 18 all up, including some still held, so I do know a bit about property.

Ng usually works like this.

You buy the home, rent it, and claim the short fall NG.

Once the equity builds, you use this to purchase the next, both are NG because the equity in 1 has not been realised. This continues.

The problem is, nobody knows whether the new home will increase in val as the NG is not transferable as it is today.

As for first home buyers getting a bargain on used homes, they only get their grant on new.

Poirot, I am not being disrespectful towards you, I am simply asking you where the new land is going to come from.

It stands to reason if an investor can not claim shortfalls during the Da process, how can they produce land at the same cost as now?

If land goes up, and you limit investment to new homes, how does this help 1st home buyers?

Observation. If NG brings the earner into a lower tax rate, then the NG rate is lower as well. Say $81K, to $75K, diff being 7 cents/$. That's a saving to the gov, not a cost.

Luciferase,

In that case, don't address me then...it's fairly simple really.

.....

http://www.abc.net.au/news/2016-05-02/negative-gearing-driving-house-prices-up-liberal-mp-says/7374478

"The Liberal MP who led a parliamentary inquiry into housing affordability has conceded negative gearing has contributed to the current spike in house prices."

"Liberal MP John Alexander led an inquiry into affordability, and told Four Corners negative gearing has led to a housing market "dominated by speculative investors".

"Too often we see the young couple getting beaten out at the auction, and then renting out the very place that they were trying to buy," he said.

What happened to the Great Australian Dream?

First home buyers are competing with experienced investors equipped with tax breaks and negative gearing.
Last year, more than half of new home loans went to investors, rather than to people wanting to buy a place to actually live in.

"We're travelling towards a market that is dominated by speculative investors. First homebuyers have really been unable to compete," Mr Alexander said.

Parliament's inquiry into housing affordability is due to report this year.

While his Liberal colleagues are singing the praises of negative gearing, Mr Alexander said it had helped to create the current price boom.

"Negative gearing has worked very well when it has provided affordable rental properties," Mr Alexander said.

"The moment that it intrudes on the marketplace and stops young families from buying the house, that's not ideal. And that's what's happened in this moment when interest rates have gotten so low."

"Millennials shut out of market

In 2016, the generational divide in Australia splits along suburban streets.

It used to be that houses cost, on average, three or four times average earnings.

Now, it is more like 10 times average earnings in Melbourne. In Sydney, it is over 12 while in the middle and inner suburbs, it can be much, much higher, forcing first homebuyers into eye-wateringly large mortgages, or out to the fringes of the cities"

The whole "point" of using NG is leverage. In itself it is not a path to riches as, if the market goes against you, or does not keep pace with inflation, you lose.

If you buy a more expensive property because NG allows you to afford the larger mortgage required, you gain or loss is greater.

That's it. Now if you think that's too potent a cocktail, cap NG at some figure that allows M&D's to invest without having to incorporate and curtails the big boys, on all investment classes including used homes. Any rental loss over the cap is carried forward to write off in years of gain.

CGT should only apply to real gain, not nominal gain, IMO. LNP's 50% concession in lieu of removing indexation of the cost base still taxes those making a real loss. Labor's 25% concession exacerbates this problem.

There is a fair solution, but Labor's isn't it.

...and, if, at times Gov't wants to stimulate new building, it could extend full (uncapped) NG to investors.

LOL Poirot, you are on continuous loop repeating the same old stuff that has already been challenged and dispelled.

No attempt to consider and weight the facts that are being put to you and ignoring questions that are always inconvenient for you.

You just don't get it that Shorten and Labor are being obliged to hunt for new taxes - 'revenue' to cover their vote-buying promises.

'Negative gearing' is a misleading term made pejorative by Labor's political spinmasters to pelt the LNP with Class War manure. Equally, 'positive gearing' could similarly be construed as something truly nasty, landlords making money out of shelter, and in fact that is the more usual spin of the socialists.

Both 'negative' and 'positive' gearing are OK though (for Saul too!) where shares and other asset classes are concerned. How does that figure?

What your compartmentalised thinking doesn't get is that it is all part of a system. Imagine a balloon - you can't push in on one side without distortion elsewhere, and in this case higher rents is an example.

The government could put a brake on demand and prices tomorrow by tightening immigration numbers, which have been excessive for decades. Many Labor State Premiers have criticised their federal counterparts for overenthusiastic migrant numbers that set new records annually. Here is one example of many,

<Bob Carr calls for Australian immigration to be cut by one-half
February 17, 2016

Former NSW Premier and Australian Foreign Minister Bob Carr has called for Australia to consider reducing its immigration intake by up to one-half before growing population density on the eastern coast changes the Australian style of living.

"I think the Australian people, if asked, would want immigration slowed," Mr Carr said at a press conference in Sydney on Tuesday. "We've got a third-world style population growth rate.

"If you bring 100,000 people into the Sydney basin every year, the price of housing goes up [...] people wonder why their youngsters can't get houses in the big cities... the answer is we are going for breakneck population growth."
[SMH,February 17, 2016]

Doog, let's sell off all the rental houses, then burn them down, and throw all renters on the street, because this is the only way you will see just how badly our country relies investors.

Make no mistake, very few investors, myself included, have St Vincent De Paul on our letterheads, as we are in the market for one reason, to make a profit.

Another fact is that increasing the number renters,(immigration as one example) and decreasing properties for rent, (turning investors away) simply increases rents.

Poirot, is your perception of first time home ownership a $600,000 home. Because if it is, then there in lies your problem.

BTW, that $800K home they missed out on, and are now renting, how much rent do you think they would be paying ?

I will bet its less than the loan repayments would have been and the ONLY REASON FOR THAT is due to two influencing factors. Negative gearing and CGT concessions. And you want to remove these. Go figure!