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State Government
- Thread starter Rosy
- Start date
I'd say the issue is widespread across all politics in Australia. Rorting, Pork barreling, jobs for mates. Until the laws change to make these actions illegal, they'll continue. We're already numb to a lot of the *smile* that goes on. The previous federal government took it to a new level.
It isn't right. But it's not illegal. That's the issue we have in Australia.
It isn't right. But it's not illegal. That's the issue we have in Australia.
"In a highly critical reflection of Mr Andrews evidence, IBAC also raised serious questions about his inability to recall key events"
Fair Dinkum.
Imagine if this feedback was given to Dutton, or Matt Guy, old mate PR Guy and his brigade would be singing it from the rooftops.
Fair Dinkum.
So true. Unacceptable but with such a mandate he knows he can behave this way.
Imagine if this feedback was given to Dutton, or Matt Guy, old mate PR Guy and his brigade would be singing it from the rooftops.
This state government has just kicked most financial savvy Victorian’s in the nuts.
If you own a unit as an investment property with the block of land being worth $150,000 you are now going to be slugged with a land tax bill of $975 per year. This cost could be between 2 to 4 weeks rent.
Landtax used to kick in at $300,000 and now it’s $50,000.
Landlords in many cases will try and pass this on to renters. Causing more inflation. And putting more cost of living on all Victorian’s.
With more than 400,000 people moving to Australia in the last 12 months. How are we going to be able to house our fair share without an increase of private investment? With the well documented increase costs of building, higher interest rates and the law very stacked in the tenants favour many investors are all nervous or being scared away.
This is a very poor outcome for the whole state.
If you own a unit as an investment property with the block of land being worth $150,000 you are now going to be slugged with a land tax bill of $975 per year. This cost could be between 2 to 4 weeks rent.
Landtax used to kick in at $300,000 and now it’s $50,000.
Landlords in many cases will try and pass this on to renters. Causing more inflation. And putting more cost of living on all Victorian’s.
With more than 400,000 people moving to Australia in the last 12 months. How are we going to be able to house our fair share without an increase of private investment? With the well documented increase costs of building, higher interest rates and the law very stacked in the tenants favour many investors are all nervous or being scared away.
This is a very poor outcome for the whole state.
REIV - State Budget bad news for Victorian renters, says REIV
Everything you need to be informed - in one place.
Can’t see any other outcome other than further rent increases. The only way it balances out is if property prices fall enough that enough renters can afford to buy the property off the investors.
Also as a landlord you are now forced into all sorts of mandatory annual certifications of electrical infrastructure, smoke detectors etc. etc that add another $500-$1000 a year of costs that I doubt most private owners have. You are also only allowed to change the rent once a year.
Unfortunately we have one of the most punitive stamp duty systems in the world too that makes selling then buying incur ridiculous transfer costs.
Have to pay for all the tunnels under the ground, renewable energy connectivity and any funding largesses somehow.
A risk in any investment are government rules changing and property investment in Victoria is seeing a lot of negative changes.
If you do nothing, debt goes up. You do something about it and people complain. It’s a no-win situation because someone will have to lose out.
IMO, if you have to raise revenue to service debt, then you should be targeting people who can afford it the most. And I think big business and people with rentals and holiday homes can afford it.
As for landlords passing on the costs to renters… Its more likely than unlikely I'm afraid because people only think about their own bottom line. I reckon the government will look closely to see if landlords abuse it. The Greens have been pushing for a rental freeze. I think that’s taking it a bit too far, but if landlords continue to take advantage of tenants, I can see the government bringing in caps for rental increases.
And before anyone asks, I have been a tenant previously and I am currently a landlord. So, I know what it is like out there. And I won’t be using this as an excuse to jack up the rent.
IMO, if you have to raise revenue to service debt, then you should be targeting people who can afford it the most. And I think big business and people with rentals and holiday homes can afford it.
As for landlords passing on the costs to renters… Its more likely than unlikely I'm afraid because people only think about their own bottom line. I reckon the government will look closely to see if landlords abuse it. The Greens have been pushing for a rental freeze. I think that’s taking it a bit too far, but if landlords continue to take advantage of tenants, I can see the government bringing in caps for rental increases.
And before anyone asks, I have been a tenant previously and I am currently a landlord. So, I know what it is like out there. And I won’t be using this as an excuse to jack up the rent.
I’m a landlord and my costs have gone up over a $1000/month. Haven’t been able to put rental up anywhere near that. Kind of stuck because if I sell I trigger capital gains that I don’t want / can’t afford to crystallise now. First world problem for sure but it is what it is.
It’s normal for any business able to pass cost increases on to pass them on - don’t think there is anything unethical about that - it’s just how it works or the business fails.
Federal government (ie everyone) will subsidise my marginal tax rate on the difference. I don’t think this is a good system (ie I think a business should stand by itself) but it’s the system that existed when I made my investment decision. We will see that play out in income tax take at a federal level when there are massive rental losses everywhere due to the massive increase in interest rates that get offset against PAYG income.
Putting up state land tax effectively sucks money from federal tax take to state and from renters/landlords to state .
As it passes through It will effectively be mainly a tax on renters and rest of Australian tax payers - not landlords.
Don’t worry, there is a $64,000 project going on at my block of units that is being shared by 12 owners. Add interest rates hikes on top of that and I am really copping it atm. I am trying my best to absorb it all, but I have to admit, it’s starting to bite.
One thing I should have added in my last post is that corporate profits is the main cause of inflation. Inflation increases interest payments on state debt. So I don’t think it’s unreasonable to slug big business to help service debt.
12 months of Albo and not a lot has changed when it comes to not giving Victoria its fair share of tax revenue after 9 long years of neglect from the previous government. Maybe that will change over time, but they also inherited a massive debt, which is problematic. Dumping the stage 3 tax cuts is a good start and I expect them to take that to the 2025 election. Negative gearing for owners of multiple properties must be looked at as well.
I have no sympathy for anyone who owns multiple investment properties. The notion that all of owners of investment properties were somehow shrewd or savvy, or that they worked harder than the rest of us to earn their investment property, is quite frankly insulting. The ratio of average wage vs property price has grown from 5x to 14x over a 40 year period. It's obscene just how much property prices have grown and how unachievable it is for younger people. And we're expected to feel sorry for people who own multiple properties now they're being asked to pay more tax? Spare me.
The concessions for investment properties are completely out of whack. Housing shouldn't be seen as a investment for people to grow their wealth, that's what the stock market is for. I think the appetite to end negative gearing will continue to grow as more younger people reach voting age. Just hoping that the Labor government grows some balls and goes for it again rather than dancing around the edges of reform.
The concessions for investment properties are completely out of whack. Housing shouldn't be seen as a investment for people to grow their wealth, that's what the stock market is for. I think the appetite to end negative gearing will continue to grow as more younger people reach voting age. Just hoping that the Labor government grows some balls and goes for it again rather than dancing around the edges of reform.
Philosophically BT. Thoughts on maintaining a negative gearing regime for new builds? Not an axe to grind from me, as I'm not an investment property owner. More just from a philisophical perspective as to whether there would be merit to confine such a tax regime in ways to encourage extra supply.
Personally I don't have a problem with the Stage 3 tax cuts, but they should have been accompanied with a massive overhaul of our tax system. I'm not sure many Australians realise how complicated the tax system is in this country and with complication comes costs.
For example, a fairly simple change to how tax is paid would save a significant amount of bureacracy. In the UK, tax is calculated and paid by employers on a cumulative basis through the year rather than calculating on an individual pay cycle. Ie. In July you are taxed on July, in August you are taxed on July and August less tax already paid. This cost is effectively outsourced by the governments to company payroll tax services and significantly reduces the number of tax returns that need to be submitted per year. In the UK in 2021-22 there were 32.2m taxpayers and they expect around 12m to require to submit a tax return so just over 30%, yet in Australia we are expecting 100% of tax payers. Thats money going out of peoples pockets to accountancy firms, and also high levels of bureacracy within government for reviews.
The UK get around this by a proper PAYG system as stated above and providing tax free allowances for investments upto a certain amount (I think the first 10k GBP of earnings is untaxed). This targets those with single jobs and a relatively low level of investments to then not be required to submit tax returns. It would then enable the government to actually target and properly review those that attempt to flaunt and get around the tax system.
Its interesting having lived in the UK and now Australia for significant portions of time, that I can assess the 2 against each other. Australia stacks up very well in most cases (better healthcare, education, quality of life etc) but with a very confused and onerous tax system. Get rid of all of the deductions and use that change to lower the tax rates, get more money back into peoples pockets on a monthly basis, rather than having to wait until the end of the year, submit your tax return and wait for your return payment. Its a horrible system and outdated and the Stage 3 tax cuts were the first attempt to start to simplify the tax system (albeit they were very minor in terms of simplification) but there is much that can be done, that will enable tax rates to be cut, if you remove the red tape and the stupid outdated rules around tax.
Sounds like we should scrap all the concessions and then landlords will only buy investment properties when they make financial sense without the rorts and concessions. Or implement the Danish model where people can only buy 1 second property. Following the Denmark rule, another way to stop the ridiculous unsustainable house prices in Australia is to limit foreign ownership to people who have resided in the country for 5 years.
I understand that property investments in Australia are an attractive investment due to the concessions given to landlords, but it's really *smile* up the market. Unfortunately, with so many people now using investment properties to fund their retirement, no government will bring in thew wholesale changes that are needed to ensure housing is affordable for those not already in the game.
The average Australian in 1984 could buy a home that cost 3.3 times their annual income. In 2023, it's 10 times what the average person earns in a year. CGT concession for property investment was introduced in 1985, as was negative gearing. It's a mess, but I really don't know how it can be corrected because no government will survive if they try.
Personally I think something more radical is possibly better and probably flies in the face of the last post I just made about simplifying the tax system, but as opposed to providing a tax break for the owners of an investment property on new builds, why not incentivise those that buy owner occupied new builds through a tax concession?
I've always thought the best way to deal with NG is to ring fence it to a particular investment property. You can only negative gear against income or profits that the property starts to make in the future.
IMO the CGT concession is really a non issue, the idea that buying a long term investment and getting a tax concession is fair IMO (and matches what is provided for long term ownership of shares which provides market stability), but the negative gearing aspects are what need to be looked at.
Theres something wrong with the model when we encourage people to buy an investment that does not provide an adequate ROI without government interference, whilst at the same time, that exact model prices numerous people out of the market of being able to buy those prices due to home price inflation.
Funnily enough the way you explain it is the same way that tax losses on share investments operate. Ie. you make a loss on share sales in a year that is greater than the gains you make and it doesn't offset your income tax on your job, it gets carried forward to a future period.
For some reason, some genius thought that it made sense to allow negative gearing to offset your Income tax from work and operate property investing in a totally different method to share investing.
The rules should be the same.
