Society/Culture Australian Property Prices to Crash?

Have you looked into Chinese investment motivations before? They have entire cities that are built and left vacant not as a means of simply inflating GDP but so that families can compete for the love interests of families that had a daughter.

So I think we are seeing a fair bit of that here too. Purchases for the purpose of a resume. Not intended as rental or otherwise occupied property.
Yes I watched that YouTube video.

There's a three-parter covering their skewed population, water problems, and property market.

I believe some property here has been a funnel for cash out of China given their currency exchange limits. It's probably more complicated than that.

Also, I am watching this guy talk about his camper van.

 
Aug 14, 2011
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Possibly, I'm not aware of it though.


The Residential property tax
The exodus of foreign property buyers from Victoria has most likely been influenced by the announcement of the Vacant Residential Property Tax (VRPT) in 2017. As of January 2018, properties in select inner and middle Melbourne suburbs that are vacant for six months or more, and owned by a foreign investor, will incur a tax.

The VRPT charges an annual rate of 1 per cent of the property's capital improved value. This tax has been implemented to combat large numbers of properties in Victoria that are being left idle. This tax should encourage more properties to become available to renters in Victoria.

“This will be a double blow for any foreign investors acquiring residential property in metropolitan Melbourne. These new measures require foreign investors to report annually on the use of their residential land holding and pay a charge equal to their original investment approval fee if their property is vacant for at least six months per year."
- Conveyancing.com Managing Director Jim Parke
 

The Residential property tax
The exodus of foreign property buyers from Victoria has most likely been influenced by the announcement of the Vacant Residential Property Tax (VRPT) in 2017. As of January 2018, properties in select inner and middle Melbourne suburbs that are vacant for six months or more, and owned by a foreign investor, will incur a tax.

The VRPT charges an annual rate of 1 per cent of the property's capital improved value. This tax has been implemented to combat large numbers of properties in Victoria that are being left idle. This tax should encourage more properties to become available to renters in Victoria.
But it never did, from what I've read.
 
Didnt pull a $, or didnt establish data?
One property owner in an article I posted had no idea the tax even existed. Nobody is checking on this self-reporting. It's ineffective and numbers of vacant properties have climbed. From what I read today.
 
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One property owner in an article I posted had no idea the tax even existed. Nobody is checking on this self-reporting. It's ineffective and numbers of vacant properties have climbed. From what I read today.

How do we know vacant properties have increased ?

No excuse for it being missed at settlement on purchases.
 
How do we know vacant properties have increased ?

No excuse for it being missed at settlement on purchases.
Links:
 

Frank Grimes

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I dont own an investment property - but its interesting you call people selfish for thinking of themselves and yet you claim all deductions to make your properties, presumably, negatively geared - which would appear to be the selfishness you speak of :think:
From my understanding claiming tax deductions on investment property is not negative gearing. It is only negative gearing when those deductions exceed the income generated from the property and applied to the person's working income.
 
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From my understanding claiming tax deductions on investment property is not negative gearing. It is only negative gearing when those deductions exceed the income generated from the property and applied to the person's working income.
Hence why I said 'presumably negatively geared'. Loan interest is the one that normally makes it negatively geared along with depreciation and capital works deduction

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From my understanding claiming tax deductions on investment property is not negative gearing. It is only negative gearing when those deductions exceed the income generated from the property and applied to the person's working income.

Yes that is correct.

The thing that annoys renters is that the loan interest on a rental property is deductible whereas the loan interest on an identical loan for the same property that is used for residential purposes is not. Less so rates, maintenance costs etc. which are a smaller percentage of overall costs.

The thing that annoys accountant types is that investment losses are offset against personal income. If you are a lawyer or school teacher or lion tamer or whatever and have an investment property than the salary you earn has nothing to do with said property. Any losses really should just be carried forward and offset against future investment income.
 
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Yes that is correct.

The thing that annoys renters is that the loan interest on a rental property is deductible whereas the loan interest on an identical loan for the same property that is used for residential purposes is not. Less so rates, maintenance costs etc. which are a smaller percentage of overall costs.

The thing that annoys accountant types is that investment losses are offset against personal income. If you are a lawyer or school teacher or lion tamer or whatever and have an investment property than the salary you earn has nothing to do with said property. Any losses really should just be carried forward and offset against future investment income.
Why does it annoy accountant types? Seems strange.

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Yes that is correct.

The thing that annoys renters is that the loan interest on a rental property is deductible whereas the loan interest on an identical loan for the same property that is used for residential purposes is not. Less so rates, maintenance costs etc. which are a smaller percentage of overall costs.

The thing that annoys accountant types is that investment losses are offset against personal income. If you are a lawyer or school teacher or lion tamer or whatever and have an investment property than the salary you earn has nothing to do with said property. Any losses really should just be carried forward and offset against future investment income.

1) it is completely reasonable for a rental property to have deductible expenses and a personal home not. Consider a vehicle being used for business like a truck or a taxi or uber vs a vehicle for personal use.

2) As an accountant myself by training (CA), I find the concept of negative gearing against ordinary income a must for two reasons being equitable treatment, a functioning financial sector and aspiration.

The wealthy (and the children of wealthy) can "create investment income" by instead of paying wages, paying themselves dividends. Further they can pay a dividend to a trust and then allocate to their kids meaning they have an unfair advantage enshrined by tax if we remove negative gearing from income.

Another is, as an economy we should be encouraging investment in our society and encouraging the building of wealth and savings. Paul Keatings superannuation has transformed this nation by providing a massive wealth tool to invest in local industry and infrastructure. Having a decentralised and flexible investment pool is just as important as it is this part of the sector that provides liquidity. Without liquidity, you don't have a functioning market.

Lastly do we want a society of mugs who are limited to trading time for money and seeking the teet of unions for $0.50 more? Or do we want people seeing themselves as a diversified business unit with growing passive income and employment income? This not only helps individuals "own" industrial relations as they are on both sides of the equation but also trains them to be self sufficient leading into retirement.
 
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1) it is completely reasonable for a rental property to have deductible expenses and a personal home not. Consider a vehicle being used for business like a truck or a taxi or uber vs a vehicle for personal use.

2) As an accountant myself by training (CA), I find the concept of negative gearing against ordinary income a must for two reasons being equitable treatment, a functioning financial sector and aspiration.

The wealthy (and the children of wealthy) can "create investment income" by instead of paying wages, paying themselves dividends. Further they can pay a dividend to a trust and then allocate to their kids meaning they have an unfair advantage enshrined by tax if we remove negative gearing from income.

Another is, as an economy we should be encouraging investment in our society and encouraging the building of wealth and savings. Paul Keatings superannuation has transformed this nation by providing a massive wealth tool to invest in local industry and infrastructure. Having a decentralised and flexible investment pool is just as important as it is this part of the sector that provides liquidity. Without liquidity, you don't have a functioning market.

Lastly do we want a society of mugs who are limited to trading time for money and seeking the teet of unions for $0.50 more? Or do we want people seeing themselves as a diversified business unit with growing passive income and employment income? This not only helps individuals "own" industrial relations as they are on both sides of the equation but also trains them to be self sufficient leading into retirement.

It is unreasonable for investors to gain a benefit that isn't also available to owner occupiers when the properties are in the same block of units.

It might be a different story for standalone properties but in a block of units it creates an uneven outcome where investors benefit from owner corporation or body corporate decisions while owner occupiers are left with costs that they cannot claim back.

Strata costs should be tax deductible for all owners.
 
It is unreasonable for investors to gain a benefit that isn't also available to owner occupiers when the properties are in the same block of units.

It might be a different story for standalone properties but in a block of units it creates an uneven outcome where investors benefit from owner corporation or body corporate decisions while owner occupiers are left with costs that they cannot claim back.

Strata costs should be tax deductible for all owners.
I think usually in that situation the investors often block improvements and Body Corp spending, while the owner-occupiers are more likely to want to spend money on improvements.
 
It is unreasonable for investors to gain a benefit that isn't also available to owner occupiers when the properties are in the same block of units.

It might be a different story for standalone properties but in a block of units it creates an uneven outcome where investors benefit from owner corporation or body corporate decisions while owner occupiers are left with costs that they cannot claim back.

Strata costs should be tax deductible for all owners.

so you feel taxis shouldn't have tax deductions because ordinary drivers don't?

why should strata be deductible when power, water, insurance and maintenance for ordinary property owners are not (for personal use)? Especially given these are the biggest costs alongside management (note you can self strata manage and thus no cost)
 
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so you feel taxis shouldn't have tax deductions because ordinary drivers don't?

why should strata be deductible when power, water, insurance and maintenance for ordinary property owners are not? Especially given these are the biggest costs alongside management (note you can self strata manage and thus no cost)
Seems a very illogical argument that's for sure

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