There are 9,000,000 houses in Australia.
There were 217,000 new houses built in Australia in 2017.
Every new house becomes an old house 1 day after someone moves in.
217,000/9,000,000 = 2.4 %.
So there are 97.6% of houses you will not be able to negative gear in Australia according to Shorten
Negative gearing is the tax loss of Rental income less
Total expenses $977
Net Cash loss ($10,977)
Less paper losses
Depreciation - plant 461
Depreciation - building 562
Total paper losses $1,003
Total Loss ($11,980)
Note the Paper Losses are claims made through depreciation companies like BMT. The depreciation companies will make a list of tax deductions for you to claim for the next 40 years.
These losses are only temporary, as capital claims of 2.5% per year need to be taken off the cost base when you sell. Similarly a depreciation adjustment is made upon sale as well.
If negative gearing is abolished, the first thing is that property owners will forego the paper losses, if they expect to sell the property.
Dividend income $7,621
Less interest on loan $8,534
Above is the ATO website explanation of negative gearing..
1) Correction - ATO says "with the assistance of borrowed funds."
You don't need to borrow to get a net rental loss.
2) Note that you may be able to vary (reduce) your tax taken out by your employer each week if you wish , by predicting the amount of loss that you make.
Go to the ATO Website to find out more.
Th above chart is an extract from the ATO, showing statistics for how many people own rental properties in Australia. It shows that 1,280,474 people currently negative gear their properties IN 2016
In addition it shows that 2,097,383 people own rental properties.
It also shows that 1,494,,508 own only one rental property.
So these are the numbers of people that will become Shorten losers.
ATO Website - See statistics for 2015-2016.
What can you offset against ?
Past Capital losses
Current capital gains
Can Shorten explain what and what cannot be offset against each other ???????
Not many people know this.
Some people take out margin loans on shares. After Shorten comes in, any losses of Dividends less interest less will not be claimable against your salary or any other income as a Negative Geared loss.
Interest on loan $12,000
Tax Loss on shares ($2,000)
This loss is not claimable in the future on your other income under Shorten.
How man Shorten losers will there be ? Who knows. We don't have any statistics.
- Where will people who earn a low income go to rent if there are
only new properties available on the market?
- Shorten says changes to negative gearing will aid with Australia’s
housing affordability crisis, however the solution isn’t that easy.
- In order to make housing more affordable , you either need prices
of houses to go down or rents to go down. Shorten needs to
advise us of which one it is, or both ?
- It is our belief that the values of houses will go down in the short-
- It is our belief that there will be an oversupply of established
properties on the market as investors are forced to sell.
- It is our belief the supply of affordable rental properties will fall
over the next few years, driving rental prices higher, hurting the
very people the changes are aimed at helping.
- There could be a recession if many factors come together.
How many working family Shorten losers will there be in this section ?
Loss of negative gearing for shares may be less of an effect than property.
But the 75% tax on shares will be a big problem for Financial Planners to sell.
Who would want to buy a share if you have to put 75% of your gain into your tax return ?
You also won't be able to claim net losses on shares less borrowings.