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Yes and no. Yes, your proposal can solve the problem for sure. No, you just can hardly implement it anytime soon. I'm in Australia and Labor lost last election
by mrjin 5y ago
Yes and no. Yes, your proposal can solve the problem for sure. No, you just can hardly implement it anytime soon.
I'm in Australia and Labor lost last election just because they were swearing to remove so called NG(Negative-Gearing, which allows the property investors to offset their income with losses from investment property) before the ballot day, despite NG itself is actually a bizarre idea: why would tax payers cover the asses of the property investors and what's more, in fair amount of NG claims, the so claimed losses were not actually rendered but rather losses in accounting term. If you opt to a different accounting method, they were actually making a profit.
So your proposal will for sure hurt those vested interests, and I would expect it be very hard to pass the parliament. It's great to see Dutch cities actually made that far, I'll keep my eyes wide open to see what's next for them.
- chii 5y agoYou made negative gearing sound so bizarre, but it's really just business investment deductions, which applies to every type of investment, not just real estate. If your business made a loss, you get to deduct that loss from your revenue, before getting taxed. This is the exact same concept, but applied to investment properties. As for the "dodgy" accounting methods - it's not really dodgy, but merely depreciation of the property at play. Depreciation is real. After all, a house doesn't last forever, so why shouldn't depreciation be allowed for investment properties when it is allowed for all other business capital expenditure? People like to argue that by taking away negative gearing for property (i.e., treat it differently), that it would increase affordability. It won't make a big difference.