thanks for the little lesson on leveraging and tax depreciation on property
as a tax agent with various qualifications in accounting and taxation I was not aware of that.
the benefits gained from depreciation and building write off in the end are minimal. You claim $20K worth of depr and building write off over the time the property is held and this amount is then taxable when the property is sold. The only reall benefit is it reduces income by the $20K over the period but is taxed as a cap gain when you sell the property
Naturally if a person leverages into an investment and that investment increases in value the returns to the investor based on the actual amount of capital applied to the investment are going to be greater the the gains the actual underlying investment.
You buy a share for $20 an it goes up$2 that is a 10% gain on that investment
You buy that share on a 20% margin loan your outlay is $4 yet you still get a $2 gain , a 50% gain but the actual under lying invesment has still only gained 10%
You buy the $20 through CFDs and you may only have to outlay $1, further increase your gain again but still not changing the gain on the under lying investment.
Mac Bank have a product out right now that allows purchase of certain shares with a 100% margin. does not change the gain the actual under lying investment makes.
It is possible to leverage just as much into the share market as it is the property market. So it is a completely flawed argument that some how the property market is better because of leveraging.
Your response sounds like you have been conned by the number of property spruikers out there, which I am glad to see the government is finally going to do something about them and the rubbish claims
