Australia and New Zealand are the ONLY countries in the world where this tax PERK gives landlords deductions on their ENTIRE incomes, and not just rental income. It's a RACKET, used by the wealthy as well as the so called mums and dads.

thinkabit,
"This statement is based on a very flawed assumption, specifically it assumes that most people who rent want to buy homes and are capable of buying homes."

No it isn't It is based on the very safe assumptions that SOME people who rent want to buy homes, and that more of them will be capable of buying homes if the price is lower.

It does not assume them to be the majority, because it does not assume the majority of rental opportunities would no longer be available.

SR,

It doesn't take a brain surgeon to realise that it will cause the existing house prices to drop when the 25% of the market is excluded, and that even new houses will be a poor investment as when they are as their resale value will crash.

All this grandfathering does is slow the impact.

In 1985 the ALP under Bob Hawke and as a result of pressure from the left, decided to disallow negative gearing by disallowing property losses to be offset against other income.

Rents went up. Big surprise, heh?

In 1987, the treasurer Paul Keating reversed the earlier changes and again allowed all property losses to be offset against other income - the current system.

Those who fail to learn from history .....

When Hawke abolished NG rents did not go up in response. Read posts other than your own.

it will cause the existing house prices to drop when the 25% of the market is excluded, and that even new houses will be a poor investment as when they are as their resale value will crash.
Shadow Minister,
So ? Houses will become more affordable-stuff the investors ! What good have investors ever been especially those who take the profits out of the country. Think about next year for a change instead of always just today.
Who do you think is the root cause of the presnt economy ? Foreign investors that's who !
Give the not so greedy locals a break & they will make things work. It'll never be a fair-level playing field if it's not a flat tax.
Obviously the system has failed miserably over the past two decades so why insist on hanging onto it !