I hear this argument quite a lot (saying that if I have to pay tax on the income, then I should be able to claim the loss -- neg gearing).
However unlike shares when you make a loss -- you actually make a loss.
Over the past few decades we have the absurd scenario where people are claiming a loss on their housing investment as the depreciation has allowed them to be a loss on paper -- but in actual face their investment has increased in price.
Then with the CGT discount when sold seems very generous. I understand the whole depreciation thing. But if you look at something like a car - If a $40,000 car depreciates it is now sold for $20,000
However if a $700,000 house ($400,000 land + $300,000 house) depreciates over the year. Even if you can sell that house for a $1 million dollars a few years later, you can claim for the $300,000 house going down in value over the years --- it seems crazy as the value to going up overall???
