Peter Martin on Neg Gearing

Originally posted by Scott th Ratbag: ↑

Our rules reward bad management
Negative gearing is a particularly Australian tax benefit, which – unlike in other countries – benefits dud landlords: those who can’t make money by renting out properties.
If they lose money (by paying out more in interest, maintenance and other expenses than they are receiving in rent) we let them offset that loss, not only against income from other investments, but also against income from their wage or salary.
It means they can cut their wage for tax purposes, cutting the tax they pay on it. And at the same time, they can hang on to a property they can later sell for a profit, which will be taxed at only half the normal rate, thanks to Australia’s 50% discount oncapital gains.
It isn’t allowed in theUnited Kingdomor theUnited States. There, if you are a landlord who can’t make money, you can offset your losses against profits from other investments – but not against your wage.
InCanadayoucanoffset rental losses against wages, but there must have been an “an intention to make a profit”. That would probably rule out most Australian negative gearers.
the conversation LINK

given the support for NG on Hc......

are investors in housing being deliberately trained to be "poor managers" of their interest in order to claim higher tax refunds?

would investors be more profitable if NG was abolished or changed to apply only to new homes?

would abolition of NG result in higher rents?

or would it, as some claim, drive out investors from owning rental property? what would be the effect of less small investors?

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I believe that there could be and should be a different, and better, approach to how negative gearing is handled, but I get sick of the bleating about it.
I wish the people who are in opposition to the current system would come up with alternative plan and present it in a professional manner. I believe there are options that are viable and still equitable across the board. I won't go into them here because I would have to write a 200 page thesis to do it justice.

As far as financial acumen goes Scott, I'm no genius but I do believe that many people are naive and go along with the rubbish that is presented to them. I have met with a few financial advisers in my time and I come to the conclusion that they were no smarter than me and I could easily gain the knowledge that I needed to invest my own money and that I would sleep easier at night.