Negative gearing is certainly similar to the ability to offset losses in many businesses. However, do you think property speculation (particularly on existing product) is an area the government should be encouraging with tax benefits? Not sure if someone with a bunch of properties is running a "business" with tangible benefits, say the way a manufacturer with employees is? Then again why encourage real investment when we can all get rich flipping properties. What is the consensus on most country's tax system in this regard? ;)
So the first home seller grant was put in place because of the GST? Why should the housing market be shielded from GST? Why not apply grants to almost everything to avoid GST. Oh, of course, because the entire tax structure is set up to the benefit of the property game.
"If you honestly think the government would mess with either of these things if property really starts to fall you are deluded" - I am a little stunned at this comment. That is exactly what the government did in the GFC - increase the first home sellers grant. More subsidies/wealth transfers to keep the bubble inflated.
In the GFC, should the government have created a scheme to top up people's savings account interest, because the lower interest rates were hurting those "poor battling savers"? Of course not, for the same reason as all the others, the whole "system" if you will is constructed to help debtors and the bubble.
If GFC2 starts biting, or if property start falling a lot on its own (no trigger needed, ask the Japanese), you can be damn sure more of these wealth transfers will occur to attempt to keep the bubble inflated.
And sorry if all the derogatory comments re: wealth transfers and subsidies make me seem like Ayn Rand. In fact, I am happy to see my taxes providing health care for less fortunate, and various other measures in a classic social democratic sense. I do not like seeing them used to further inflate/maintain a non-productive speculative industry.
Your point on rent assistance is taken, I was unaware of that stuff.
