NOTE: Video sponsored by the ACTU
Key points
- It would make house prices increase by more than the maximum amount people could withdraw
- It would cost the government $1 trillion in the long run
- It would leave people with $200k less in retirement savings
- It would significantly affect the returns on all superannuation as funds would need to keep more cash reserves uninvested so it is available for withdrawal
People will just go back to what they did before negative gearing: Make businesses and move their properties into that. “Oh, your business made a loss paying more interest than it brought in as rent, I guess you can write that off as a loss and not pay tax on your income”.
The result is the same, but it’s more work for the ATO.
My old boss still had his holiday home under the business, because it’s how he did it before Negative Gearing was a thing.
Make it so that interest on money borrowed against residential real estate can’t be declared as a business loss then. That’ll also make speculating housing investment funds a bad idea
If that were the case we wouldn’t have aeen a sharp uptick in investment at the same time NG was introduced.
You’re always gonna have people finding ways around things, the point is to make it hard enough your average schmoe bails on the attempt
Same thing would probably happen with property limits then