579, a very popular way for FHB to buy in is through the home buyers scheme, which by the way is now only available for newly built homes. In fact, I think you have to actually have a home built, so speckies as they are known are not even eligible.

So, if you take that $15K away, how much harder will that make buying a used home.

Besides, this thread is about the black hole in labors policy, whereby they predict they will save the tax payer $40 billion over 10 years. What they have not accounted for is the number of investors who will now buy in trusts, rather than negative gear the asset, but the deductions will still remain, only worse. because trusts are treated differently to PAYG earners.

In fact, if used houses do fall in value, investment through trusts will mean more competition, not less. So if values fall, and rents increase, investors may well have a field day.

What's the point!

Not all FHB can afford a new house with the 15,000 . Where as they can bye an older house with an affordable mortgage.
You are still trying to find ways of roarting the system. The idea is not to have investors in old housing stock, so no matter what you come up with will have been covered. The ATO has been looking into trusts since the Gina debacle.
You have old news the new black hole is 20 b not 40 or 60. So I would not take any notice of stuff you read in the Australian. They have very elastic numbers.
The point is houses are over inflated by great amounts. The difference between building price and resale price is crazy. They need pulling down to earth. 60,000 vacant high rise apartments in Melb. No one can pay the gigantic price tags.
Investors are not competing for a house they are competing for a tax dodge.

I think the point of the thread is that given the grandfathering clause, labor's housing tax will raise precisely nothing in the first few years, and at best only $2bn over the 4yrs of the forward estimates.

This gives labor absolutely bugger all to spend or reduce the budget deficit.

That's not quite the point of the thread SM, the point is that if NG is removed from used housing, one simply needs to form a trust to buy a used investment home and, unlike PAYG earners, the trust has far greater tax advantages.

You see labor thinks they will make housing more affordable, well they wont, they will just see investors changing the way they invest and, if they tax CG by 50% more, then why would one hold a negatively geared home, as they might as well buy in a trust. Far more flexibility, far more tax advantages, and much the same CGT implications.

See I, like many self employed draw a wage, and I make that wage pretty much what I wish to. At the moment I draw $86K and I will be watching to see if I receive a tax break, and if I don't, then I may reduce my wage and use the extra to invest, perhaps in property at a reduced price with additional rent.

So when its all said and done, I cant really loose, but the economy can, big time.

All the forecasters have done is taken the amount of subsidized taxes in NG, and assumed they will get all that back, whereas trusts will ensure they don't, and there in lies the black hole I refer to.

successful people in business usually predict the future, whereas annalists usually work on data from the past and this is why they get it so wrong. A point in case being the failure of the mining tax where big business outsmarted the government.