butch, you're wrong with, "... negative gearing also subsidizes rents" and "...the new home buyer and investors will be competing for the same item......This in its self will push prices up".

Firstly, you use the term "subsidize", meaning someone is sharing the payment of rent with the tenant, putting money into the landlord's pocket. Who is it? NG is but one way losses can be written down. It helps to maintain sufficient supply to meet demand and keep rents down. Take it away and limit loss write-downs to company/trust structures only, and the balance tips.

The term you should perhaps use is that NG "sustains" rental levels. Don't fall in behind Labor's class-war rhetoric of subsidies, concessions and rorts.

Secondly, what investor wants a new house enough to outbid an owner occupier, with no idea of its value as a used asset? You've said this yourself but contradict it with the quote above.

Luc, once again you are splitting hairs.

Either way NG helps to make investing more attractive, which in turn means returns on investments can be lower simply because they are made up of income, capital growth (another area they intend to take an axe to) and tax advantages. All these factors form the mix that make rents affordable.

As for the new home war, yes, you may well be right, however, are you aware banks have started insisting on 30% deposits in certain areas that were traditionally 20%. This is due to uncertainty in values.

So, given this policy will most certainly fill the sector with uncertainty in values, where would your wannabe first home buyer be if they had to save 30% instead of 20%?

As an example, call todays value $400,000. 20% means an $80K dep.

Turn that $400,000 into say $350,000, @ 30% and the deposit becomes in excess of $100,000. How is this more affordable.

Now that's assuming a drop in val of around 10%, what if vals drop 3-4%, which some experts predict. Having to save 30% would be even harder.

Mining is screwed. Car industry gone as well. The housing market is not only one of our strongest performers, but its also a HUGE employer. Do you really want to effect this sector?

Now is not the time Luc.

Personally, I don't negative gear, I run trusts. I still get the claims, in fact with a trust you can claim much more than as a PAYG who does negatively gear. Perhaps Bill is targeting the wrong one here, hey!

Butch you keep changing the position of the goal posts. The market will find its own level without interference from investors or any other white ant.

Rents are already far to high for the level of income the tenants earn. Time has come for a different approach.
Around the world condo's are the proffered low cost housing.

A new house to me means a house built from the ground up, not an already lived in house. Investment in used houses is creating a false economy. Houses are market based and should not have other interference.

The only investment needed in housing is the supply of new dwellings , not creating competition for existing housing.

OK butch, have it your way. I expect that the abolition of NG would therefore put money back into the public purse to buy more goodies? That's what Shorten runs around saying.

It must also be that a company's ability to write down a loss against a profit is a taxpayer subsidy? Should that be next to go?

Terminology is very important in class-warfare, butch.

No Luc its not the same because very few go into business to loose money, whereas many do with property.

An investment must return well or its not worth having. It has a mix of income, capital gain and write offs

Take away CGT discounts and investors simply wont sell. But take away NG and people will stop investing.

A scenario.
You earn say $80K per year. If you had a NG property that gave you say $7000 back, and you can no longer do that, then you are more likely to pay down your own mortgage and while that may sound great, how does that stimulate the economy.

The other important issue no one will talk about is bank profits.

Banks charge interest and as such make profits and as such pay tax. So while NG may give some back, take it away and banks will not make profits on that loan, so therefore wont pay the tax either.

This is a dumb policy but it sounds like some will have to learn the hard way. Well good luck with that.

Just remember, if this policy did decimate the building industry, how will any government think they can reinstate trust again.

This is simply a grab by labor in an attempt to plug the hole the started.

Butch you are going on as if the only ones that want to buy older houses are investors. People that want to buy in are being pushed out by investors. People that want to buy in want to live there. Investors that buy in want to minimize tax.

Its all good and well to say what about the renters, without investors there would not be so many renters, they will be home owners.

It's all about looking after your own ass.

Go and invest in greenfield houses.