No point to negative gearing if the price of the asset is falling or going sideways for years on end. But many will just keep doing it hoping for the next dream run. I would if I owned property, as I hate losing or admitting defeat.
Imagine the massive black hole in the tax take that the govt will start to see. Cap gains tax from property sales, from billions to almost zero. Will take a while to flow through with people delaying the payment of the bill by a while, but the easy big tax dollars for the government from the share market as well will be drying up.
Once they realize abolishing negative gearing would be a way to restore some of that tax revenue, they might consider changing the rules, to for eg, you can only negatively gear a new property for a period of 5 years to encourage the building of new housing stock which is largely what it was supposed to do.
Possibly, if we get a decent property price retracement over the next few years, pollies may be able to swing the canning of NG as the market may be completely and utterly shagged anyway and prices pegged and supported by fundamentals rather than by a ponzi or Pyramid scheme of greed, preventing too much downside when the NG is finally put to sleep.
