Negative Gearing Policy

The cost of housing in our capital cities means that current and future generations of Australian’s will be priced out of the market and most certainly be restricted in location choice. The cost is attributed to local and overseas investors buying into the residential property market. Investment is fuelled by two factors- negative gearing and minimal control on overseas investment. BIS Shrapnel likened moves on the part of the Federal and Victorian governments to introduce application fees for foreign buyers and beef up regulation and penalties for breaches in the case of the former and impose extra charges on for land tax in the case of the latter to ‘throwing pennies in the path of a steamroller.’ The firm said foreign investment in Australian residential property would continue to increase irrespective of the measures.
https://sourceable.net/foreign-residential-property-investment-will-roll-on-bis/
The effect of negative gearing on house prices is again under scrutiny Greg Jericho states that negative gearing is a “legal tax rort for rich investors that reduces housing affordability -“ Only Australia, Japan and New Zealand allow unrestricted use of negative gearing losses to offset taxes due to income from other sources. Other countries such as USA, Germany, Sweden, France and Canada allow some offsetting with restrictions imposed. Applying tax deductions from negatively geared investment housing to other income is not permitted in the UK or the Netherlands. The Greens support abolishing negative gearing. Details of the proposed policy can be found at http://greens.org.au/node/11315 and
http://scott-ludlam.greensmps.org.au/sites/default/files/negative_gearing_initiative.pdf
The paper on our negative gearing initiative does not spell out how the policy will be implemented- for example:
Does the proposal-
…..Allow landlords to offset ‘costs’ such as rates, insurance, repairs, etc., against the income, but NOT the interest charged against any loan on the property-
…..Allow landlords to offset ‘costs’ such as rates, insurance, repairs, etc., against the income received from rent, but NOT the interest charged against any loan on the property , i.e., any monies are offset against rent income and not wages nor income from other sources
……Disallow landlords to offset ‘costs’ such as rates, insurance, repairs, the interest charged against any loan on the property, etc., against the income received from rent- i.e., no costs can be offset against rental or other income.
        Success for the proposal may depend on how  the  implementation is designed and managed.

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