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think positive 
Side By Side
Joined: 30 Jun 2005
Location: somewhere
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| Pies4shaw wrote: | ^^^ No need to feel "judged", tp and I apologise if I contributed to that. I just hoped to provide a reasoned explanation of how, historically, negative gearing in its present form came to be permitted, the problem I believe it has created and why it, in my opinion, the system requires reform.
It's perfectly legal and many people take advantage of it. I deliberately avoided using the word "rort" - that is, a fraudulent or dishonest practice - to describe it because I do not consider that people who are just doing what they are allowed (and, frankly, encouraged) to do should be criticised. I judge the system and the politicians, not the ordinary people who live their lives in accordance with the system. Indeed, one might go further than that and say that, as with superannuation investment, people are doing precisely what the tax concession was intended to encourage them to do.
Finally, I only mentioned my personal position at all because over the years people have been too ready to say "Oh, you're just jealous because you can't". My reference to negative gearing on holiday houses being "unethical" is because that area does seem to me to be closer to being actually dishonest (because it is often predicated upon using a property in a "seasonal" area during the peak, advertising it for "holiday letting" for the rest of the year when no-one will want it and then claiming that the holiday house was a failed rental venture for 48 weeks of the year, for which eleven twelfths of the expenses are deductible). |
cool, twas not you that brought on the feeling anyway!
Your last paragraph is interesting, we have friends who jump at every loophole, some disgust me. (Using a trust to get a concession card etc) They have a holiday house, I wonder if they do that! (Not me we just have a humble jayco!) that truly is just wrong. I'm morally comfortable with the financial decisions we have made, and that's important to me.
I also judge the system. The whole super thing shits me and I don't trust it. They change the rules too much, which is why I prefer bricks and mortar.
Cheers
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You cant fix stupid, turns out you cant quarantine it either! |
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stui magpie 
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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| Pies4shaw wrote: | ^^^ No need to feel "judged", tp and I apologise if I contributed to that. I just hoped to provide a reasoned explanation of how, historically, negative gearing in its present form came to be permitted, the problem I believe it has created and why it, in my opinion, the system requires reform.
It's perfectly legal and many people take advantage of it. I deliberately avoided using the word "rort" - that is, a fraudulent or dishonest practice - to describe it because I do not consider that people who are just doing what they are allowed (and, frankly, encouraged) to do should be criticised. I judge the system and the politicians, not the ordinary people who live their lives in accordance with the system. Indeed, one might go further than that and say that, as with superannuation investment, people are doing precisely what the tax concession was intended to encourage them to do.
Finally, I only mentioned my personal position at all because over the years people have been too ready to say "Oh, you're just jealous because you can't". My reference to negative gearing on holiday houses being "unethical" is because that area does seem to me to be closer to being actually dishonest (because it is often predicated upon using a property in a "seasonal" area during the peak, advertising it for "holiday letting" for the rest of the year when no-one will want it and then claiming that the holiday house was a failed rental venture for 48 weeks of the year, for which eleven twelfths of the expenses are deductible). |
Thank you sir for indeed a reasoned explanation of history. I think it's important to understand why things came to be and exactly how they work before attempting to change them, otherwise the law of unintended consequences strikes yet again.
Disclaimer: I don't own a second property, I don't even technically own the one I live in. My approach to these things is similar to TP, if it's legal and encouraged and you have the opportunity to do it to your advantage, then do it, but I do draw the line at practices that are obviously wrong such as the claiming a holiday house as a failed rental 48/52.
From my perspective, effective tax reform has to be done across the board with the holistic view as well as the detail so that all the different impacts can be understood and managed. Simply tweaking some things and leaving the core alone is just repainting one of the rooms in that weatherboard I referred to earlier.
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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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ronrat
Joined: 22 May 2006
Location: Thailand
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Why not simply allow negative gearing on one property per person. Those with 4 or more properties should be taxed as landlords much like the owner of a block of flats. And you only get one shot at it.
A friend of mine was talked into buying a new house by his wife who was a real estate agent. 1 year later she shot through with a local copper and took the new house as settlement and he had to remortgage his old home and now can't afford to retire.
Similarly my sister had paid off her house. her dickhead husband bought a new place and got the sack but didn't say anything. He lost all the money on the new home plus my sisters house and she finds herself divorced at age 53, working as a cleaner and living in a rental property.
The banks are happy to have your business whether it is viable or not as long as a house is attached.
Perhaps we should have a tax on failed propositions taken out of the obscene profits made by those bastards.
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Annoying opposition supporters since 1967. |
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