"Used to be against -ve gearing, but property investing IS a business. You get relief for interest on margin loans and business loans, why not for property loans?"
Because property doesnt actually provide anything to the economy except for a roof over renters heads. By having negative gearing means investors can afford to pay more for a house than they normally would. The downside of this is twofold.
Firstly by pushing property prices its harder for renters to actually get out of the rent cycle to purchase their own property.
Secondly tax payers who dont have investment properties and this obviously includes renters are subsidising investors via their tax breaks.
Thirdly it creates a false market as peoples buying power is in a sense increased due to the tax breaks they know they will receive.
Business, farmers etc actually provide goods and services that help growth, share and property negative gearing doesnt.
I would be quite happy to see negative gearing removed from margin loans aswell, what are the benefits and what are the pitfalls...the benefits are limited the pitfalls can be seen from the last stockmarket dive in 2008.
All negative gearing/tax breaks on property should be removed so we dont have the false property market that we have created.
A land tax would bring in more revenue for govts, it would also stop people holding vacant blocks where services have been provided quite often by the taxpayer. It would help reduce urban sprawl. It would help lower property prices due to land shortages.
