Author and Property Market Commentator
One of the hottest topics currently doing the rounds is the future of certain tax exemptions when it comes to property investing. The motivation is to control the surging housing market in Sydney and Melbourne, but if negative gearing for example was to change thus causing investors to leave the market, it would create a problem the government absolutely does not want. Here are your positives to negative gearing and why the government needs property investors.
Many different countries around the world reward property investors by utilising some kind of tax relief or subsidy to ensure the supply of rental housing continues to support societies needs. In Australia two examples of this are negative gearing and the capital gains tax discount, both of which encourage investors to own rental properties and help them to make the experience a profitable one.
Why is it important that property investors provide and pay for housing? Basically so the government doesn’t have to. The percentage of rental housing provided by the government has dropped from 25% down to less than 12% over the last 30 years. In Australia investors are doing the heavy lifting for the government and providing the other 88% of housing.
But like it or not, it appears change is coming. Going forward, the proposed Labor party policy is to ONLY allow negative gearing relief on new properties. This would commence on July 1st this year, but also grandfather any existing properties using these benefits.
The investing landscape is always changing, but I believe there is never a need to panic. Staying calm is about knowing the right strategy for your lifestyle and your family to ensure a wealthier tomorrow without sacrificing today. To hear how hundreds of property investors have used my investing strategy to acquire positive cashflow property portfolios and how you can do the same please click the banner below to register for my next free 30 minute webinar now.
Some further food for thought came courtesy of an article written recently by the Financial Review, which claimed if negative gearing was abolished altogether there would be at least 1.15 million families affected by the change.
But what is even more eye opening is the other consequence which would be the federal budget gaining a $4 billion boost from the abolition of negative gearing.
Looking at these numbers it isn’t terribly difficult to see perhaps another upside to the government moving to alter these exceptions for property investors.
Many people ask me about new properties verses existing properties when it comes to property investing. New properties bring with them many benefits for investors other than just the negative gearing exemption for which they potentially will only be suitable for come July 1st 2017.
It’s these benefits that have caused me to be a big fan of new property for so long. Selecting the right property in the right market with, most importantly, the right strategy can create a very positive, passive and prosperous experience for property investors. To hear more about this very strategy click here to register for my upcoming free 30 minute webinar.