What caused the Housing Crisis, and how do we fix it? | Ask an Economist
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- čas přidán 3. 06. 2024
- You've probably heard a lot about how negative gearing and the capital gains tax discount are contributing to the housing crisis, but what even are they? And what can the Government do to fix the rapidly worsening housing crisis?
Executive Director Richard Denniss and Senior Economist Matt Grudnoff are here to answer your questions, on the latest Ask an Economist!
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You guys are my favourite pairing on this channel, you bounce so well off each other, all this stuff is so much more palatable with a good dose of humour!
The only economists who have useful answers Richard and Matt, even entertaining, stand up econ, but sitting
This could quite easily have turned out to be a Clarke and Dawe interview. Classic.
I was just thinking that
@@_nebulousthoughts Same
When advocating for removal of the CGT discount keep in mind that the tax is paid on the entire gain in one financial year, even though the gain has been earned over many years, often decades. The income tax scales ensure that the total gain is mostly or even entirely taxed at the top tax bracket, even though in a normal year the taxpayer's marginal tax rate may be 2 brackets lower. Just went through that experience with an investment property and it hurt, albeit softened by the 50% CGT discount for long term assets.That's where shares beat housing, because you can sell just enough shares each year to not move up a tax bracket, or you can sell just enough to top up your concessional super contribution to the maximum $27.5k p.a., paying only 15% contribution tax.
Also, since the changes in 1999 CGT is paid on the notional gain, not the real gain (after inflation).
As a kid who grew up in Army married quarters houses, (with two sisters and parents), the DHA is a good idea to extend; as long as you don't mind quite modest houses. For a family they typically had three smallish bedrooms, a combined dining and lounge room, an outside laundry, and one toilet/bathroom. They were about half the area of a family home today, but they did the job. But if want a two storey McMansion..... why should the rest of us care about your 'wants' as well as your 'needs'.
They're not quite telling the whole story on negative gearing and capital gains tax discount. Let me explain:
(i) In the USA you can claim a tax deduction on your loan repayments for the home you live in. That encourages buying property as a residence. You can only negative gear against your rental income, not against any income you make. BTW their housing is cheaper than ours, so much so that the combined cost of equivalent housing and health insurance (not cheap in the USA) is usually less overall in the USA than in Australia.
(ii) Capital gains tax (CGT) discount was to make the maths easier. Imagine if you bought any asset (apart from the home you live in) 30 years ago for $200,000, and sold it now for $800,000. That's a capital gain of $600,000, so you owe CGT on it. But the value of money has changed in that time. $200,000 way back then might be worth $500,000 today, so in 'real value' the capital gain is only $300,000. There is no CGT on the sale of your own home - (and there are rules about 'what if you bought it and lived in it for a while, then moved interstate and rented it out as an investment property, etc.)
The capital gains discount says "let's cut the dollar difference between what you paid and what you got by half, and we'll say that makes up for the loss of value of your money". If you don't do that, you have to calculate the 'real value' of the money when you bought it. That's quite possible to do, but it gets complicated when you have to take things into account like investment property improvements you made along the way, each with their own different 'real dollar value'. It's a pain.
There was no capital gains tax before 1985, and the CGT discount was introduced in 1999; that is, back in an era when inflation was high, so the value of money was dropping fast, much faster than recently (like 17-18%). Get rid of the discount and you need to either drop CGT altogether (which favours those already with assets), change the discount rate (but what is fair), or calculate it exactly (favours your accountant's income).
Also need to be careful about fiddling with NG and CGT. Make it less attractive to own investment property and the number of available rental properties declines, because richer people invest more in businesses, shares or whatever instead, and renters can't find a place. Personally I like the way the USA does it with tax deductions against your own home loan interest (alleluia!!!), and being able to only negative gear against investment property rental income, not your total income.
There's other stuff going on as well. Like we need to build a lot more more houses; but tell our kids "you need to go to Uni to get good job" instead of "have you ever thought of becoming a tradie?"
Well done! Best explanation I have seen of reality in this space. But we need Labor to ignore reality so it can bite them in the butt at the next election.
Thanks John Howard.
Yes, and Peter Costello, that economic genius also abolished tax on Super for over 60's.
Don't forget Paul Keating. Between the two of them, they did more damage to Australia than two world wars.
@@davidbrayshaw3529 Please explain. I wouldn't have any Super if wasn't for our Paul. You have been listening to Trump's ' Destroyed everything' fantasy over reach David.
wrong @@davidbrayshaw3529
It was Keating dummy
Very few countries allow negative gearing tax breaks , the rest do just fine without it.
The CGT discounts are another matter.
This is another facet of the rancid legacy left by little johnny howard.
Speculators get tax breaks and work/production cops it in the neck.
You could not come up with a more socially and economically corrosive policy if your tried.
You would introduce CGT discounts if you wanted to chop your country off at the knees.
Money has walked out of work/production ever since honest john introduced it.
It turbocharged negative gearing and is the root cause of our insane real estate prices and housing crisis, these insane prices are reflected in commercial property
where they are a colossal brake on business.
Cut the CGT discounts and get investors with tax breaks right out of real estate.
They already have enough sand pits to play in.
Like most problems this country faces today, if you drill down you will find the root cause lays right at the feet of little johnny howard.
He ruined this country, did more damage to the social and economic fabric of it than any other PM.
Australia should be a paradise for ordinary people, instead we have 1% owniing 25% of rental properties. Its so depressing.
The banks are the biggest investors in houses and will make the government keep the price going up because at the end of the day they make the most money in housing
Investment properties are run as a business. Ongoing taxes payable are subject to normal expenses vs income results.
Negative gearing only allows for interest charges on any associated loans and that is set by the reserve bank. If the loan is at a higer interest rate, then no negative gearing applies to the difference.
If there is no loan, there is no negative gearing.
Capital gains is a tax on total overall profit at sale time. This tax is way more than company tax. So it is much better to invest in things that are not subject to capital gains tax and just pay the company taxes on profits.
Land taxes in Vic have just gone up 150%. On my investment property this represents 80% of the rent i recieve. By law i am not allowed to increase the rent to cover these new taxes.
I still have insurances, rates, maintenance etc to pay.
All in all, property investment is not a good return.
Then why do people invest in property?
The historically low rental availability indicates that negative gearing and reduced capital gains tax might not be the primary drivers of the housing crisis. Instead, the issue is likely exacerbated by rapid population growth due to migration and regulatory constraints that hinder new housing development.
No you are wrong
what makes you think there is not a rental crisis going on?@@------837
or perhaps it just shows that these policies need updating as they aren't achieving what they're supposedly designed to do (referring to the argument that it encourages property investment and is therefore good for supply and needed). Sure, it encourages investment in property, but right now we need that money to be invested into new dwellings, not existing ones. Grandfather the current policies and restrict NG to new developments, or at least limit the amount of existing properties you can negatively gear
in my opinion,
Grandfather current negative gearing, only allow new negative gearing schemes on new home builds,
developed the department of public housing which should build non for profit or minimum profit homes to market,
allow first home buyers to use superannuation as home deposits,
introduce some small capital gains tax on the sale of primary residents instead of full exception,
limit/cap foreign investments into housing/property/land by enforcing a 50 year sale/or return to Australian body, Australian citizen or permanent residence,
offer rent to buy schemes for people in the current public housing scheme
just some ideas that might help.
I mean just look at Singapore, Much higher GPD, Higher avg earnings, Higher costs of living, Higher population density, Much smaller land mass, Skills shortage and BAM! somehow affordable housing! How did they do it? schemes similar to what is written above.
What if all the Porter Davies and other collapsed builders customers where all negative geared ,millions of dollars lost
Tenants do not want to live in new estates
@@petermurphy2167 hence why i suggest Grandfather current negative gearing to ensure anyone currently reliant on the negative gearing system is not stressed by the change.
negative gearing would likely needed to be phased out over time instead of overnight
e.g. everyone before 2025 100% claimable , 2026 90%, 2027 80%, 2026 70%........ till 0%
while new house supply is encouraged by not adjusting negative gearing option.
tenants shouldn't be affected, if anything they should have more options and cheaper rents due to more supply of homes on the market
@@petermurphy2167 hence why i suggest grandfathering current schemes/current negative gearing. So that any systems/groups/people currently reliant on negative gearing will be sustained.
As it is atm though by allowing new unlimited negative gearing on existing homes only serves to pump up the housing price market via increase demand via increasing affordably and hedged risk to lenders and investors without increasing supply of homes or at least a lack of focus on new supply of homes.
by all means doesn't just make sense that if we are going to tax subsidize the housing market we should at least focus on subsidize supply, not the whole market including demand of existing homes.
tenants shouldn't be affected? I believe if anything they would have more options on the market as more homes enter the market.
Australian 🇦🇺 housing policy is a joke and this is the best summary of it. Well done guys!
Yes, Cui Bono. Who benefits. Ian Goodenough LNP W.A. is the Parliament winner with 10 investment properties. LNP 102 and Labor 60 investment properties from the Parliament register of interests. The Tax summit in 1985, changed Negative gearing from the family home to rental properties. Maybe restore that to the family home only, as it is in other countries that have negative gearing, like the U.S.A.
Ian Goodenough just lost preselecting for his incumbent seat. Hopefully this is an indication change is in the air.
Negative gearing on the family home 🤣
If government starts building houses they will take 10 years to build and be 400% over budget. 😂
And just remember that past federal oppositions (ALP) have proposed significant (but not perfect) reductions in the negative gearing and CGT discount only to be punished in the election for doing so.
The continuation of this problem is not entirely the fault of the federal government. We the voters are partly to blame.
Murdoch and lobbying largely so as well
@@bigdawg-yq5bd No voter was forced to vote against their financial best interests. Gullible voters fell for ithy meaningless campaign slogans.
Bad choices often have bad outcomes.
Now that ALP is in power, we still don't see them doing anything about negative gearing and CGT, just like they haven't done much about other issues like cost of living crisis. Instead, they spent hundreds of millions of dollar on meaningless divisive political campaign and open up the immigration floodgate.
I guess you are right, bad choices lead to bad outcomes.
One the biggest problems impacting housing affordability is the astronomical cost of construction - due to the insane power and corruption of the building unions. Love to see some analysis from the Australia Institute on that issue. Sadly that is beyond their level of integrity.
Also - government building housing is a fucking crazy idea. Government can barely deliver any service to the public efficiently. Remember such disasters like the school building waste, pink batts…only someone totally divorced from history would recommend that as a solution
There's a third factor as well which is tied intimately to Capital Gains and Negative Gearing, and that is Interest Only Loans, where investors never pay off the loan itself, only the interest that accrues.
Australia cannot continue to have a tax system where you win at the beginning with negative gearing and win at the end with Capital Gains Tax. This not to mention depreciation. Everyone must PAY their FAIR share.
This is almost as funny as what is land tax or what is risk when a pandemic hits or what is VCAT when renter destroys a property.
Would it be worth while having the old TAFE System of training apprentices. Who could work on government house building and get there trade qualifications. Because as a country we need houses and trades people
How about f the government and f government housing
@@benjamingriswold2564 you like that let's privatize everything idea clearly that'd work well at this point in time
@@michaelgleeson1198 It's the government that creates the laws that allow all of this to happen
@@michaelgleeson1198 Labor funded $921 million for fee free TAFE in the Oct 2022 budget.
@@markmorfesse8080 that's awesome so we just need the government housing part now
Aside from what you have said, it needs to be linked to a drastic reduction in immigration levels. A suite of changes needs to be implemented in order to stop this rampant greed. It's gone on for too long and the suffering in our communities and on the environment needs to be stopped now!
Address the source cause and not the symptoms/political expediency. Drop both impediments simultaneously. Thanks Australia Institute 👏👏👏👏👏👏. ⭐️⭐️⭐️⭐️⭐️. 11:24
Great, straight-forward explanation
Singapore is already doing it! HDB!!!!
Good content. Keep up the dialogue. Help us!!!
Landlords work hard to purchase investment properties. No one knocks on the door and says would you like an investment property and you say "Yes" and its all done. It is available to everyone, but it's hard work. Let's encourage people to get into the market, rather than focusing on the people who already have.
Great breakdown
Negative gearing does effectively provide a govt subsidise rent for tenants. It also encourages investors to be Landlords. Otherwise why do it?
Removing negative gearing now will create a massive black hole in rental stock. Turning the current rental crisis to a disaster.
The housing crisis is a supply vs demand issue. We need to get supply increased, but at the moment it's near a decade low. Because it's dearer to build than buy existing. So existing house stock will need increase before building can commence in any sort of rapid rate.
Govt building houses is one way to assist this. Fixing up the constipated systems we have to deliver land & housing might help too. Authorities find reasons to say no. Rather than yes.
Just my 2 cents
Politicians own lots of investment properties and there is plenty of nationwide house supply.
It's a double edge sword. Renters can't afford to buy due extra demand created by investors who are prepared to pay more so they also have to pay extra rent due to this demand. Additionally they have to pay the extra tax the investors are avoiding.
It only benefits investors who are well into the highest tax bracket (polies themselves) and own multiple properties and get negotiated deals from banks, real estate agents, insurance and maintenance. It doesn't benefit owner occupiers since although the house value has increased they now have to pay extra rates, insurance and real-estate fees and if they were looking to upgrade the gap between the house values has also inflated.
It's also not that difficult to make it appear on paper that your profit was less by making it look like u paid more to begin with and sold it for less by paying or being paid portions in cash.
Labor did try to abolish it in 1985 but since it was only for investors who bought after this date it was ineffective, really just for show as people who bought previous to this date obviously never sold in order to keep the perk. It needs to be abolished completely with no exceptions. As they say the devils' in the detail.
Liberals introduced the scam, labor supports it (obviously since on average polies own 3 properties).
Now renters are onto the scam they will have to abolish it.
The solution is and has always been, common ownership of the means of production.
Define 'common ownership', and who exactly will be the 'common owners'?
And what does 'means of production' have to do with housing - do you use housing to 'produce' anything?
The only way to fix this big mess polititians created is to stop these polititians intervening in the property market. Slow down Albonese endless mass immigration, stop Albonese assist to buy incentives that only push prices higher, stop all intervention and you are going to see market happily fix itself and prices going back to long term average.
I love matt. A comedic economist🤣
Most multiple property portfolios are positively geared for cashflow. By canning negative gearing, your only pushing out mum and dad investors and securing more property for the big players. They made way with negative gearing before and look what happend... yes new owner operators entered the market, but it was overshadowed with lack of rental properties available for people with lower incomes. The bank still wont lend you money if you dont earn enough or have multiple dependants.
Perhaps the focus of the argument should have been the governments poor management with the housing trust scheme...
G'day boys, I've been a subscriber for a while now and I've just signed up to your newsletter.
I have a question, does the ever-increasing cost of housing make our GDP figures look better and thus, gives little incentive for governments to do anything about the problem, aside from the coin that they are making on the side. GDP going up at all costs is a good thing,,,,,, right?🤨 I understand that they are not the only ones. A couple I know, had, at one point seven N/G'd properties. The whole concept makes my blood boil.
Why don’t they implement an additional buyers stamp duty tax. Follow the Singapore system to cool the market?
There’s no housing crisis in Tamworth !!! Heaps of flats for around 300 k and heaps of houses on big blocks . There’s no buyers here do y spend a million dollars there when you get get a beautiful flat for investment or a stunning house . We have everything here heaps of work , shops , schools , clubs , great weather and food and only 490 ks to Sydney . What u waiting for park your bags snd come up .
It’s not how can they fix it. It’s will they fix it.
negative gearing doesn't increase housing costs, infact it reduces rents on said properties, - people invest in housing to get a certain return, if you increase the returns they get they are willing to enter at a lower price point which keeps prices lower. if you ditch negative gearing they will want either higher rent of higher capital gains. higher capital gains is market driven so rent will be affected. furthermore negative gearing is simply offsetting an expense, like any business or deductible, these people forget that they are paying interest and getting a fraction of the net amount back, so they are still cash flow negative on interest payments. negative gearing simply keeps rents lower than they would be on properties that have low yields, if you ditch negative gearing, yields (for low yielding property that incurs negative gearing), will go up. this is something the green-left doesn't understand.
the government is the problem , after the government the way we are taxed is the problem .
a 1% trans action tax with no tax deductions or tax advantage , would fix every problem , full stop .
to get a 1% transaction tax , we need to get rid of government , as they never made anything better for normal people
The best
How do we make Labor implement a DHA on steroids?
you do realise investors can buy DHA homes using NG?
Reduce concessions to new buildings and increase spending on Defence Housing for the millions of friends and families of Defence personnel 😅
Yeah, but the flaw in this "logic" is that negative gearing was in place decades before the housing crisis, so can't be the cause of it, and prior to 1983 there was no capital gain tax at all (i.e. a 100% discount), and again, no housing crisis.
Very true. Also, negative gearing and CGT discount are also applicable to other types of assets (e.g. shares), so the idea that these tax benefits are only available to real estate investment and hence lead people to pour money into it is unfounded. These so-called economists just fail to realise or acknowledge that there are other factors at play, like population growth (partly due to immigration) and an unhealthy obsession in real estate.
That is correct. But facts are is taken notice of or something that improves the foolishness of these so called economists like Grudnoff and Denniss.
They can't work out that to have more housing one must have more investment in housing no matter where it comes from and that more housing means more opportunities for those who rent and lower rents if the investors can reduce their costs by negative gearing.
They would rather have less investment in housing that will inevitably result in fewer houses to rent or live in.
Removing them won't fix the problem.
Banks money creation, or QE created a housing crisis
You wouldnt be saying that If you actually dealt with DHA!! Absolute nightmare!
Satire?
Please add to you analysis that investment companies, large investment funds and superannuation investment funds don't need negative gear because they are tax on profit not income so any loss incurred on an investment would automatically offset other income.
Is the plan to push "mum and dad" investors with 1-3 investment properties out of the market in favour of large corporations and investment funds?
Who are the investment companies and funds? If they only make profits from renting then would they increase rents? Same for private landlords?
Lol. What a dolt, calling negative gearing a "tax minimisation scheme". Rule #1 from my accountant: "never do ANYTHING *just* to reduce the tax you are paying." For those who don't get it yet, negative gearing reduces your taxable income, it doesn't give you free money. For example, if in a financial year your income from the property is $27k, but the expenses (interest, fees, insurance, repairs etc) add up to $30k, you are down $3k. If you put those numbers on your tax return, your taxable income will be reduced by $3k. If you are in the 32.5% tax bracket and have no other income or deductions, you will receive a $975 refund, meaning your investment is down $2025 for the year. Losing money is not a good investment. Do it for enough years and you'll see the folly of doing something just to reduce your taxable income. Negative gearing might be an acceptable strategy to kick off the first year or two of the investment, but it's really not sustainable.
Well said. It seems that many people are incapable of understanding that losing $4.00 to save $1.00 is a bad idea.
@@gerryloveday3142 So many people don't understand "tax deduction" let alone negative gearing.
The biggest issue though is the near complete lack of High and Medium Density Housing construction in the last 30 years.
Entire new suburbs are built every year filled entirely with single family homes.
Both were introduced by the Coalition. Labor lost 2 elections in a row promising to repeal negative gearing. Last election they said they would keep negative gearing so they didn't give fuel to the smear campaigns of the coalition and the mainstream media. If Labor wins a second term I think there would at least be changes to negative gearing, but they might not abolish it. Not straight away anyhow.
The existing negative gearing policy was introduced back in 1985 by Keating / Hawke (Labor). And what did Kevin Rudd / Julia Gillard do about it when they were in power? Nothing. Zilch. Nada.
If the current Labor government genuinely think negative gearing and CGT discount is a problem, they wouldn't need to wait to win a second term to repeal it. And let's not pretend that Kevin Rudd and his mob all are not property hoarders too who are more likely than not benefit from the current policy.
Seven and a half thousand properties to rent in Sydney at present good luck thats scary Straya lots of tension out there
Richard Denniss and Senior Economist Matt Grudnoff are to short sighted and financially challenged to understand several basic facts about negative gearing.
Firstly the government does not lose anything from negative gearing because without that higher level of investment fewer resources would be put into housing and fewer houses built or renovated so there would ultimately be fewer houses sold which results in less capital gains tax for government to collect.
Additionally their idea of reducing or abolishing negative gearing will mean investors will have to be putting up rents to cover their cost of providing a rental service.
Also less money into building or maintaining housing means fewer house over all. That in turn means a relatively smaller supply for the same level of demand which is only satisfied by higher prices.
It seems their short sighted views make them miss considering those facts entirely.
Could the housing crisis be more about bringing in 700 000 migrants. Every year.
Fred Harrison should be discussed
No mention that the federal govt guaranteed bank loans during the 2008 gfc those guarantees are still in place the USA rolled those back but our banks still have that safety mechanism in place . All those bad loans are no risk to the banks here in Australia want a 2 million dollar loan no probs!
So money directed to housing leaves investments in important areas of the economy is weak!
Yeh great lets build more houses we have a material shortage a builder shortage, materials are very expensive and labour costs have have gone through the roof. So how do we build more houses when we are at our limts already? Before you go on about building more houses have a look at how many houses have been built in a year and how many more we would need to build to solve the problem. Australia simply does not have the capacity to build more houses we need to stop immigration until the housing market catches up with demand for housing. If we keep accepting the current levels of immigration the housing market will never catch up. Where are we going to house all these new Australians? On negative gearing you didn't explain that well. Negative gearing means that a landlord pays for someone to live in their house. Yes there is a tax break but for every $1 that a landlord pays the tax concessions is .30cents (approx) so .70cents has to come from the landlords pocket not a good business plan. Rentes are able to rent a house for much less than if they were buying it. This is a problem as then there is an unrealistic expectation on what property a renter can afford when and if they decide to enter the housing market. The solution to the problem is far more complex than you make it out to be. Yes I am a landlord and no I have never had a negatively geared property that is bad business. My property portfolio is my superfund and my retirement income so I am not a burden on the welfare system in my retirement.
Cheers Darren
Homes VIC?
You wont get a 50% discount in the short term it only applies if you have owned the property for a considerable length of time and then sell
12 months.. a lifetime.
Hold it a considerable length of time and inflation eats away any gain (CGT is on the notional gain, not the real gain)
You dont want to allow DHA to do it they are worse than DVA
So what's great about winning gov on a lie?
Time to scrap subsidies for everything. Electric cars, solar panels, childcare, rents, corporate tax breaks, special industries. Why should I pay for you to buy an electric car. Why should I pay for a house for a teacher or a cop. Stop all the bullshit waste and allow us to spend the money we earn.
Surely the humble banks must make a dollar out of this, maybe the stock market as well from cashed up equity.
If I had $100 for every housing affordability article/ video over the last 20 years I would be able to buy a house in Sydney out right. Here we go again....
It’s simple maths: we had 5 houses and then the government let in 12 immigrants
Medical specialists and politicians paying their fair share of tax? Don't be rediculous.
Have these guys never taken advantage of either situation???
Stop foreign ownership ffs
Eat the rich.
This is such misrepresentation of reality. Housing will crash if negative gearing incentives are removed and the implications on unemployment will be disastrous
Negative gearing - funded by young tax payers
Rent assistance - funded by young tax payers
Capital Gains discount - funded by young tax payers
Pensions - funded by young tax payers
They conclude the government should supply more social housing. This will go along way to keep the poor from climbing the wealth ladder
Governemnt building housing? 😂 I work in the construction industry and when a government job comes up the businesses rub their hands together and inflate prices, probably rightly so to protect against all the red, blue and now green tape
You guys really hate rich people and people trying to get ahead..........redistributing any of your own wealth fellas?......somehow I doubt it
howard weakening the nation. Also higher wages needed to pay off the house, makes things dearer to get made here, so fewer jobs.
Boomer made 500000 in couple of years by flipping a house. I have to pick a lot of beans to get 500000
Just thank your government whom allowed $401.6 billion foreign investment in Real Estate market for 2020 2021 2022 while the citizens was locked up in their homes and couldn’t cross state borders even so very few local citizens bought new homes . This amount of money was enough to overheat the market
I didn't expect one-sided argument from The Australia Institute. Its a sure act of conventional media.
Negative Gearing and discount in Capital gain tax attracted more people to invests in Housing Sector in return more housed are built due for this. Don't forget Housing market also has to compete with other markets.
On Other hand, if Government is collecting TAX on positive gearing, people has right to have negative gearing tax offset.
Is it Government's job to built houses of masses (10% of Population) or focus on good governance and creating fair and completive market?
3:50, you didn't actually listen did you? Just had to rush in and sh*t out your talking point.
Negative gearing suits high salary earners for it to be effective!
To be totally correct, it suits those on the highest tax rates - and the changes to Stage 3 have just left them there, making tax strategies like negative gearing still very attractive.
What biased rubbish. If they actually sat down and went through full real world costing of an investment property they would see EFTs are a better investment. I’ve built 4 investment properties over the years and without these incentives I wouldn’t have done it so there would be 4 less houses. Investment properties are about how lucky you are with the timing of the buying and selling.
Stop talking the truth!
Opinion and truth are not the same thing.
You are so keen for people to pay tax, what about the goverment continue to tax people more and more and then spend more. How about a 50% tax on all resource companies on their gross income
They make it sound so simple, but its not. If the government built houses and rented them out, how does that fix anything? If the houses are sold to anyone, they will just be purchased by investors. If rent or house price is set very low for low income people, then OK, but that is just a public housing program. Housing for poor people at tax payers expense. This requires the government to establish a bureaucracy to determine who is poor and who isn't and control the sale of houses to certain recipients. It will stop private investment in new housing. It doesn't bring down the price of houses.
The only way to get more housing is to put more resources into it. That means more financial resources goning into housing no matter where those financial resources come from.
If you stop or reduce private investing in new houses it will push up the cost of new housing because there is less investment in housing because it means there are fewer resources put into housing.
These style videos are great. The other long format stuff is great too and informative but these shorter format videos are way more palatable for more people. Keep it up.
Hope you got permission to spy on Defence Force practices when legally operating as a legitimate Australian Institution, could get you in serious trouble.
Sorry, I didn't catch everything you said. I had to vomit after you said "The Project".
Affording individuals to claim tax losses on investment is common sense. Housing crisis is a culmination of GST and state government tax policy strangling supply of new housing and discouragement of foreigners to invest in student new housing. Government has trousered every new first home buyers 10% deposit via GST for 20 years. ESPOUSING -Class warfare and xenophobia is unhelpful.
Clickbait
why?
@@TheFfabinhoo parroting the same crap instead of facts
@@petermurphy2167Why is it crap?
@@TheFfabinhoo The greens followers are being played by the corporate s and banks.Divide and conquer by appealing to there jealousy, greed ,entitlement and stupidity. An economist who does not understand supply and demand?
The idea that housing issue s are caused by some Boomer conspiracy is ridiculous. When just gambled on the goverment fucking up and they have done it spectaculy.
What is taxpayer cost of social housing compared to some negative gearing later cancelled out by positive gearing after 10 years
Without investors we would have an even worse housing crisis. Investors provide housing.
So if we remove Negative Gearing and CGT, then nobody would have investment properties. So the flow on effect is that everybody lives with their parents until they can afford to buy or build a house, because there would be no rental properties. Not even companies like Blackrock would buy an investment property. And if you did have an investment property, you would charge astronomical rents because you need it to pay off the property and never sell it because the capital gains would be fully taxed.
Yep as we all know, nobody had an investment property and nobody rented before the 90s. Home ownership is taking a dive, so sort the problem out now or democracy will like a hammer.
Did you even watch the video?
@@NathanCroucher What we need is an incentive to build more homes. Instead of a First Home Buyers Grant, why not have something like the NT has with a Home Builders Grant ($25,000). So you can live in a rental or buy a starter home, then save up enough to build a house. This will help increase the supply.
25k Grant, ok cool im up my investment property rent or the sale of my house by 25k to take that from peasants. Because thats the point of those grants. To bump up asset value. Its buying votes.@@Hunty49
lol if you can’t make profit without tax payer assistance then you’re doing the wrong thing. What drivel.
There’s so many socialists here.
exactly, things are quite simple:
Negative gearing - funded by young tax payers
Rent assistance - funded by young tax payers
Capital Gains discount - funded by young tax payers
Pensions - funded by young tax payers
In my view, the problem has been primarily caused by banks lending out too much money, too cheaply, for too long. The banks and Government are treating you as fools.
This is not genuine analysis, and indeed highly misleading, if you fail to mention that there is a problem with SUPPLY (ie local governments, not enough builders, stamp duty etc etc), and DEMAND (high immigration, boomers living longer etc).
I'm glad you at least didn't give a pass mark to the government owning 40% of people's homes - this would only act to ensure that government games the system further.
Interesting comment re Defence Housing Australia, but I still don't trust government.
The core problem is that Persons C and D are agreeing to use Person A's money to build a house for Person B. It's not their money so they don't care how much they spend, and they won't live in the house, so they don't care whether the house is a nice place to live, or where it is located. If you've ever seen where DHA properties are located, you know what I mean.
A strong and independent home-owning middle class is crucial for the proper function of democracy. If the government owns your home (public housing) and pays your bills (welfare) they have too much power over you and democracy fails.
You're tilting at windmills with your attack on negative gearing / CGT.
Negative gearing is not the cause of the housing crisis. Negative gearing does result in more people having to rent instead of buy their own home, but that's a different issue. By "housing crisis" we mean there is a shortage of housing - which pushes up house prices and rents. Negative gearing does not change the number of houses or the number of people that want to live in them, so can't possibly cause a housing shortage. What IS causing a shortage in housing is obviously immigration, but you didn't even mention it. Why is that? Too scared all your woke friends will think you're a racist? Maybe you should leave economics to the adults.
a problem is that all we seem to build is single story homes in sub developments with no access to transport, shops, no walkability, no connection to anything, devoid of nature or any character connected to the highway that connects to the city, built about 50km from a city centre. so every morning people get into their cars and line up behind one another on their trips to drop their kids at school or buy some milk or drive to work. And whats to stop all these cashed up investors just simply buying these houses and doing the same thing. If the government was serious about creating a housing supply for everyone it would limit the amount of houses 1 person could own. Someone wants to buy house A and pay 500 a month in mortgage payments but house gets bought by investor and now gets charged out at 600 a month in rent.
Our tax system is perverse. If I have $50K capital and a great idea for a new product or service and want to develop a business part-time to get started I can't write the losses of this business off against my wage income. Fair enough, we can't have taxpayers funding endless dodgy start-ups just so someone can reduce their taxable income.
However if I put that $50K into a loss-making rental property and use those losses to reduce my taxable income (negatively gear) the ATO gives you a blank check to do this ad infinitum.
It's no wonder Australia's productivity is down the toilet if this is where the tax system encourages investment capital to go.