Neg Gearing was set up to encourage private investment in property a) as a savings measure for retirement under the Hawke plan to reduce the demand on the aged pension, and b) to stimulate the flat market in rentals which were effected by the strong Housing Comm ownership.
now, when the market is so obviously distorted, it makes sense to adjust NG to meet the demands of today.
CGT is only a fair tax at the full rate. Howard backed off the tax giving a "discount" which has become permanent due to pressure from investors which included many in his own party and supporters.
both tax measures are truly out of date. way too generous for todays inflation and tight rental market. if its a tool for encouraging investment which benefits the nation instead of only investors
over the decades we had some people gaining massive wealth growth due to interest only loans at very low interest and piling mortgage on mortgages as collateral until the "investor" really owns nothing but rakes in rental money and pays no tax. i.e. its been rorted excessively to the detriment of the nation.
imo NG should be available but only on new buildings and a limit of 1 or 2 older investment properties as part of a retirement savings plan.
