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01/10/15
21:29
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Originally posted by cafa
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'It is also a driver of the economy. The building industry is huge.' - wrong reason to give tax breaks!
Most negative gearing goes into houses that have already been built.
'I think you may have missed one of my points. I believe that the overall tax collected on investment properties is greater than paid out' - do you have any stats that back this up?
Just think for one minute - I, or you, can buy an investment property and structure my loan so that I never have a profit in the first 10 years. In fact when other costs are included I run at a negative $50k PA for ten years. I'm on the highest rate of tax so I save around $25k PA = over 10 years that is $250k saved. My house goes up in value say by $500k over the 10 years - not unreasonable. I now sell it and only book $250k as a gain, allowing for the 50% discount for holding an asset. The $250k is taxed at marginal rate = around $125k.
So at the end I'm $125k in front thanks to the taxpayers of Aus. If the house only goes up in value by $250k then I break even, if it goes up more than $500k then I'm well in front.
'If you want more tax revenue, get rid of the capital gains tax discount of 50%.' That would start to even up the deal. Negative gearing and capital gains discount, together is a total rort. And you know what will happen if they tax super, folks who are retired will start to negative gear as they now have a taxable income. To use one of the examples, if super income above $150k is taxed at marginal rates, what do you think the dude with $500k a year income from their super will do to reduce their tax - negative gear other investments.
There needs to be a complete overhaul of taxation, IMO. If we tax super, then stop negative gearing, abolish the capital gains discount, ensure multi nationals pay a fair share of tax, kill salary sacrifice (who really needs a new phone or laptop every year?).
And as for charities allowing staff to salary sacrifice their mortgage payments - well......do you know how many registered charities there are in Aus?
And then we could start to seriously reduce income tax for everyone, and there would be less incentive to avoid taxes.
And we should increase GST to at least 15% - it is very hard to avoid GST.
Just for clarity I take advantage of every tax break out there, including all of the above, but does that make it right?
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"And we should increase GST to at least 15% - it is very hard to avoid GST."
Nope. 12.5% if anything.....it is divisible into 100, if you see what I mean. 15% would have accountants and software manufacturers suiciding,
From day 1 of GST, it was stated a future rise would HAVE to be to 12.5%...
GZ