Negative Gearing Explained | Greg Jericho on the Project

I’m voting for whatever party vows to scrap this. The end.

Simple answer is You can have only one property to negative gear. That will help the small investor as well as the renters as well as new home buyers.

The project sucks, as if those bastards dont have multiple properties they negative gear.

Fun fact: negative gearing as originally conceived was to encourage private investors to build new houses to help offset the Federal government's impending reduction in funding new housing stock. Today, only 3% of negatively geared properties are greenfield investments, the other 97% are tax write offs on existing housing. It's rare to be able to calculate a policy failure so accurately but there you have it: negative gearing as a policy has only been 3% successful. There is no rational measure to justify its existence in its present form. It only distorts the housing market and exacerbates the divide between the rich and the rest of us.

Good explanation of negative gearing. In the interest of fairness, Dutton has 6 investment properties. As if Project viewers need to have their prejudices against Labor re-enforced.

the average income of negative gearers is $60k because that's what's left of their taxable salary after they've negative geared! That's the whole point, to make your $100k salary look like $60k by deducting $40k in interest payments. Business owners can't offset their salary with the interest on business loans, they can only offset it against the profits of the business. Only property investors can say "well the business lost money so I'm claiming that against my salary". If you can't run your business at a profit, you shouldn't be in business.

How many invest properties does Waleed have?

Property is one of Australia’s financial pillars

Keating got rid of negative gearing in 1987. Result - rents went through the roof due to investors fleeing the market. Labor had to later reinstall it later to restore balance to the rental market. Get rid of it and the same thing will happen again. Doesn't bother me, rental property is a terrible investment. I get a much better return on shares.

You left out that most neg gearing turns positive gearing in a few years...

As your rents increase with time and your equity increases, the gap between negative gearing and positive gearing decreases and usually after around 10 years you begin to have to pay tax. Then if you sell your positively geared property you have to pay tax on the deamed value. You cannot use the scenario of the beginning of negative gearing and not take into account that firstly you are reducing your income to live, ie, having a lower standard of living by forgoing a large proportion of your wages to pay the interest on your loan. I have been saying for years, while you are young and living at home, if you save a deposit and buy a very cheap property and rent it out. Then when it becomes time to move out of home into your investment property you with have good equity in the home. If you sell the property to buy a better house you will have to pay capital gains

Greg Jericho is a dead set legend. He brings receipts and explains the point so succinctly.

If the next generation gets it's head straight and crushes the Coalition then the field opens up for much needed change👍

Robert Kiyosaki once described negative gearing as "the government subsidising a loss making business"

People forget the 50% CGT was introduced to simplify CGT calculation. Previously, you had to to calculate the inflated value of the asset to work out your capital gain.

The Project, such a cringeworthy show.

New construction only. We need to incentivize investments toward building new housing, not buying up existing housing.

Here's the important point: interest on a loan is tax-deductible when the loan is used to acquire or maintain an income-producing investment. That's the only reason why you are able to negative gear, because you "gear it" so that the tax deductable interest payments are greater than the income from the investemnt, in other words, you actually want the interest payments to be higher. The profit comes from the capital gain (when and if you sell it), not from the annual income. But then they dont sell it, they use the capital gain on paper, to purchase more investment properties. The simple solution is to remove the tax deduction on interest payments for residential housing, if it is not your primary place of residence. This would be more equitable, because giving the tax deduction on interest payments to the ordinary home owner helps him or her buy a home to live in.

Get rid of it. Stop foreigners buying Australian real estate. If they want to live here they can rent from an Australian . They can also put caps on rent.

i see waleed still hasnt changed his tune since 2019 he must be hating this 🤣