Poirot,

The BIS modelling is the only 'modelling' that is not a complete joke, no matter how badly labor tries to rubbish it and get caught out lying about it.

There was no ANU modelling, There was the back of the ciggy box modelling done by one man.

The BIS report was done by one of the most respected modelling agencies in Aus, not for any political purposes, but for a major property developer to understand potential changes, and businesses who use to make decisions don't generally fudge the data.

".... and the CGT discount enables you to minimize the tax on your profit – because you get to choose when you sell your property."

So, Poirot, you time the sale of your property to achieve the lowest price possible and, thereby, minimize your tax? Brilliant!

See the CGT thread I started to see how Gov't makes money even when the investor loses money.

Labor's populist, ill-considered policy is to differentiate itself from the LNP and sell, sell ,sell that difference. There are ways of sensibly dealing with the NG and CGT questions which are so different from class warfare Labor has chosen under the cloak of affordable housing for the first home buyer.

If Labor wants police, nurse, and teachers types to stay onside it should not be treating them as class enemies. It should leave that to the Greens, who hate everyone.

Porit, the biggest boost to house prices since the 80's has been the ridiculous first home owners grant. I say ridiculous because it should never have been a free gift, rather, it should have been an interest free loan, repayable after say ten years, or when the equity in the home is realised.

As for negative gearing, this has actually kept rents down as the investor was able to get relief from the NG. As an investor myself for the past 25+ years, I have received rent, capital growth, at least in the last 15 of those and tax relief, all of which add up to a worthwhile investment.

If you remove negative gearing, reduce CGT relief and place uncertainty in values, the end result is obvious.

In fact, we could see the top end grabbing bargains via owners having the sell due to bank orders, then rents skyrocketing due to a downturn in new buildings.

Of cause there is also the question of where is the new land going to come from, but no one wants to go there.

Actually rechtub the biggest boost to house prices was the government
decision to force lending bodies, banks etc to lend on two incomes.

What happens to any market when twice as much money is made available ?

The sisterhood gained a bigger mortgage to pay back and lost the option
to stay home with the kids.
Now they whinge about the cost of child minding.

Economy 101; Borrow on two incomes, pay back on two incomes.
Simple isn't it !

Yes Bazz, I agree.

Another was when the non banking sector came into the mortgage market offering loans with lower deposits, as before this the banks would not talk to you unless you had at least a 30% deposit.

People have this miss conception that negative gearing makes buying a house more affordable, which is simply not true.

To benefit from NG one first has to fund the short fall, then claim the losses back on tax and as with any form of business, without the cash flow you fail.

Of cause the underachievers would have you think it's just a scam for the rich, however, the rich don't receive one cent in welfare, usually pay a small fortune to educate their kids, then pay another small fortune to have them looked after and, MOST IMPORTANTLY, provide housing for the underachievers to live in.

Now the underachievers are wanting the rich to stop investing in houses but fail to realize there will soon be a huge group of underachievers competing for less houses to live in. Talk about shoot ones self in the foot!

As a long term investor myself, and having used negative gearing as well, one thing I have always found comfort in was the fact that there would always be a buyer for one of my properties should I want/need to sell. I think this is the crucial unknown in all of this as nobody knows whether one, the buyers will be there for the used homes, and two, how much they will be willing to pay and this will ONLY EVER be determined by how much rent can be generated because the losses could no longer be claimed.

It is such a black and white issue because unlike now, rental income will pretty much be the deciding factor in a properties value.

This is why this brain fart policy is flawed. It will back fire and hurt those who can least afford it the most, the renters. Not to mention the building industry at large. All when we are about to loose our car industries.

rehctub,

"This is why this brain fart policy is flawed. It will back fire and hurt those who can least afford it the most, the renters. Not to mention the building industry at large. All when we are about to loose our car industries."

The building industry will still be able to build new homes - and people will still be able to negatively gear those homes.

People who currenty have negatively geared investments on already existing homes will still be able to NG those homes because they are grandfathered.

You can still invest in an already existing home if you wish - except you won't be able to claim a tax rort for doing so...nor will the highest 10% be able to continue using NG to claim around 50% of the NG dividends.

Who hurried along the demise of the car industry in order to curry favour for the FTA..and which PM labelled sacked car workers as being "liberated"? (one guess)