State Government

[Ian4]

I would have thought if the government wanted to regulate, they should start by attacking Air BNBs.

My mate lives on the Mornington Peninsula. He is going through a divorce, so decided to Airbnb his place over the summer to help with legal fees. He made a motza.

I'm happy for him that its helped him out a bit, but some of the charges down there during the peak season is criminal. but people pay it.

 

[MD Jazz]

Interesting discussion.

I think these things should be applied with more nuance, a blanket hit on investment properties drags in people who have circumstances not really appropriate for it.

For a lot of people an investment property is effectively their super, without the means or knowledge to set up a self managed super fund provision.

Seems silly to force people to invest in super on one hand and then penalise them on the other. Much like the 3 million super provision, I think these things should be targeted based on value. Apply it to people with investment properties with a value of 2 million and above for example.

I think negative gearing is highly overblown as well, I've always considered it fool's gold. People forget negative gearing relies on your investment making a loss. Tax breaks on other income don't cancel out that loss so you are relying on capital which doesn't exist unless you sell the property and them you have to pay capital gains. If it is a long investment the capital can be substantial but so are the year on year losses.

Anyone who is negatively geared would almost always be better served with a different investment in my experience.

Negative gearing is not an investment strategy. It's an outcome from buying any investment and having the tax laws of the day applied to that investment.

Negative gearing does rely on capital growth. And not every investment experiences capital growth. A lot of the worst outcomes are for those lured into unit or apartment investments from property spruikers on big commissions selling the depreciation deductions/negative gearing aspects of the investment. Unfortunately a lot of these properties are worth less than the purchase price 5 years after the investment.

The other great investment farce were the MIS (Managed investment Schemes) in agriculture promoted in the last 20-30 years. Big upfront deductions and a supposed payoff down the track. People lost billions in those. Blue gum farms, olive groves, pine plantations....all i ever hear when people talk about these is "MONORAIL"

Another issue is the CGT rules are too generous IMO.

I hope labour can make some changes in this area.

 

[RoarEmotion]

Negative gearing is not an investment strategy. It's an outcome from buying any investment and having the tax laws of the day applied to that investment.

Negative gearing does rely on capital growth. And not every investment experiences capital growth. A lot of the worst outcomes are for those lured into unit or apartment investments from property spruikers on big commissions selling the depreciation deductions/negative gearing aspects of the investment. Unfortunately a lot of these properties are worth less than the purchase price 5 years after the investment.

The other great investment farce were the MIS (Managed investment Schemes) in agriculture promoted in the last 20-30 years. Big upfront deductions and a supposed payoff down the track. People lost billions in those. Blue gum farms, olive groves, pine plantations....all i ever hear when people talk about these is "MONORAIL"

Another issue is the CGT rules are too generous IMO.

I hope labour can make some changes in this area.

Yep - unfortunately the negative gearing actually pushes property to be a negative cashflow situation pre-tax and positive post-tax that is then reliant on capital growth and to some extent 0% death duty (so capital gain never realized) making property prices way higher than they should be as it attracts investment demand at a price level that shouldn't work.

For a capitalistic society it's just a dumb set up.

For someone in that society (and willing to wear the risk of regulatory change) then it's been a smart way to grow wealth if you bought a house in a growth area (and not an overpriced apartment).

 

[Brodders17]

My mate lives on the Mornington Peninsula. He is going through a divorce, so decided to Airbnb his place over the summer to help with legal fees. He made a motza.

I'm happy for him that its helped him out a bit, but some of the charges down there during the peak season is criminal. but people pay it.

And people who want to live there cant because there arent available houses, and businesses really struggle for 9 months of the year cos there isnt anyone around cos all the houses are empty. (That may not apply in this case if he rented out his home- but it does in a lot of cases.)

There has been talk in various places of taxing unlived in properties- i havent thought too much about it, but it might be a good idea.

 

[MD Jazz]

My mate lives on the Mornington Peninsula. He is going through a divorce, so decided to Airbnb his place over the summer to help with legal fees. He made a motza.

I'm happy for him that its helped him out a bit, but some of the charges down there during the peak season is criminal. but people pay it.

Ha ha. Criminal? Nobody is forcing anyone to rent them. You can spew some nonsense at times binman.

Air BNB is going to create issues for some. Those that don't declare the income in their tax returns. Or consider the potential CGT consequences - you can lose the PPR exemption by renting out all or part of your home.

 

[Ian4]

Ha ha. Criminal? Nobody is forcing anyone to rent them. You can spew some nonsense at times binman.

Yes yes, the market dictates the price and you don't have to pay it, yadda yadda. I've seen some of the numbers and i don't understand why people would pay it. It would be cheaper to fly to Phuket or Bali for a week than do a week in Dromana in summer via airbnb. and you are also guaranteed good weather.

I love the Peninsula and i am extremely lucky i am go there anytime i want (and will retire down there eventually). But I would never pay those prices out of principle.

When i say its criminal... The fact that people can charge what they want makes the market even worse and makes the housing shortage situation even worse.

 

[The Big Richo]

My mate lives on the Mornington Peninsula. He is going through a divorce, so decided to Airbnb his place over the summer to help with legal fees. He made a motza.

I'm happy for him that its helped him out a bit, but some of the charges down there during the peak season is criminal. but people pay it.

My first property purchase once I finished university was a townhouse within walking distance of the MCG.

Once I moved overseas I rented it out for many years, always to 3 nurses at a time in a share house, who worked at the Epworth.

When I came back to Melbourne I switched it to an Air BnB, partly because of legislation changes and partly because I wanted to be able to use it when I went to the G.

The ability to load up on rates for events means the returns are phenomenal, Billy Joel and Ed Sheeran brought in a month's rent in a couple of nights each and Grand Final week brings in another 3.

It's all well and good from an owner's perspective but it's not lost on me that it means 3 nurses now don't have a place to live. That spreads around and it isn't good for any of us.

Personally I think Air BnB should be legislated so it can only be used on properties offering a room where there are existing permanent residents. Shouldn't be allowed to rent an empty place on a nightly basis.

 

[RoarEmotion]

My first property purchase once I finished university was a townhouse within walking distance of the MCG.

Once I moved overseas I rented it out for many years, always to 3 nurses at a time in a share house, who worked at the Epworth.

When I came back to Melbourne I switched it to an Air BnB, partly because of legislation changes and partly because I wanted to be able to use it when I went to the G.

The ability to load up on rates for events means the returns are phenomenal, Billy Joel and Ed Sheeran brought in a month's rent in a couple of nights each and Grand Final week brings in another 3.

It's all well and good from an owner's perspective but it's not lost on me that it means 3 nurses now don't have a place to live. That spreads around and it isn't good for any of us.

Personally I think Air BnB should be legislated so it can only be used on properties offering a room where there are existing permanent residents. Shouldn't be allowed to rent an empty place on a nightly basis.

You have to also ban serviced apartments and hotels if you go down this thought process.

It basically lets capital/business monopolise the ultra short term accomodation market.

I think if you fully go down this pathway you end up with Dan controlling all property in Victoria as you need to socialise it all.

==

Another way is that you massively tax any hotel / serviced appartment / AirBNB that has less than some percentage of utilization (say 70%) which incentivizes providing longer term accomodation whilst not discentivising something that is well used - meaning it isn't really creating dislocation. Kind of a use it or lose it approach. Queensland has proposed 50%. I don't mind this kind of thought process as I think it has a lot of positive externalities. (Some would extend this thought process to private properties along with stamp duty changes to get bigger properties to bigger families and smaller properties to smaller families but that is a big imposition of state control on private lives I think best served just with property taxes based on house size and no stamp duty)

Airbnb landlords to pay tens of thousands of dollars under proposed Queensland levy

Greens bill will see investors pay 5% levy on all residential property left vacant for more than six months

www.theguardian.com

 

[Sintiger]

Interesting discussion.

I think these things should be applied with more nuance, a blanket hit on investment properties drags in people who have circumstances not really appropriate for it.

For a lot of people an investment property is effectively their super, without the means or knowledge to set up a self managed super fund provision.

Seems silly to force people to invest in super on one hand and then penalise them on the other. Much like the 3 million super provision, I think these things should be targeted based on value. Apply it to people with investment properties with a value of 2 million and above for example.

I think negative gearing is highly overblown as well, I've always considered it fool's gold. People forget negative gearing relies on your investment making a loss. Tax breaks on other income don't cancel out that loss so you are relying on capital which doesn't exist unless you sell the property and them you have to pay capital gains. If it is a long investment the capital can be substantial but so are the year on year losses.

Anyone who is negatively geared would almost always be better served with a different investment in my experience.

There are a couple of things here.

Firstly we don’t force people to invest in super and then penalise them. Superannuation is an impost on wages paid by an employer and the tax incentives for the recipient after that investment is made on their behalf are massive, I would say now unaffordable, and all that has happened is those tax incentives have been reduced a bit.

Secondly you don’t have to make a loss on a property to negatively gear it. It can be used to also reduce the profit that the investor makes and is no less valuable in either case. For example a smart investor may buy a property that makes a profit of x and then borrows enough so that the interest equals x. The interest payments are covered by rental income and the investment is tax free, sitting there nicely for a big gain on sale with a CGT incentive as well.

 

[Baloo]

Kos Samaras breaks down the investor profile of the 600,000 odd investment properties in Victoria. Mum & Dad investors only make up a small segment of owners.

https://twitter.com/i/web/status/1662251593503494144

 

[22nd Man]

My mate lives on the Mornington Peninsula. He is going through a divorce, so decided to Airbnb his place over the summer to help with legal fees. He made a motza.

I'm happy for him that its helped him out a bit, but some of the charges down there during the peak season is criminal. but people pay it.

Peopl have been letting out peninsula houses for holida rentals for decades through local real estate agents . Air BnB is just a different middleman.
Mate of mine makes more from about 12 weeks of holiday rentals than he would by letting it on an annual basis . Holiday makers don’t have the same power as a tenant and his family can use it 40 weekends a year.

 

[22nd Man]

Kos Samaras breaks down the investor profile of the 600,000 odd investment properties in Victoria. Mum & Dad investors only make up a small segment of owners.

https://twitter.com/i/web/status/1662251593503494144

Why the arbitrary cut off of 44? Some people are just starting families in their 40s and I don’t know many (any) who had no dependent kids by the time they turned 50.

Somaros should tell us who these mystery landlords are, not who (he thinks) they are not.

 

[22nd Man]

My first property purchase once I finished university was a townhouse within walking distance of the MCG.

Once I moved overseas I rented it out for many years, always to 3 nurses at a time in a share house, who worked at the Epworth.

When I came back to Melbourne I switched it to an Air BnB, partly because of legislation changes and partly because I wanted to be able to use it when I went to the G.

The ability to load up on rates for events means the returns are phenomenal, Billy Joel and Ed Sheeran brought in a month's rent in a couple of nights each and Grand Final week brings in another 3.

It's all well and good from an owner's perspective but it's not lost on me that it means 3 nurses now don't have a place to live. That spreads around and it isn't good for any of us.

Personally I think Air BnB should be legislated so it can only be used on properties offering a room where there are existing permanent residents. Shouldn't be allowed to rent an empty place on a nightly basis.

How did you ensure that only nurses rented your place?

 

[22nd Man]

And people who want to live there cant because there arent available houses, and businesses really struggle for 9 months of the year cos there isnt anyone around cos all the houses are empty. (That may not apply in this case if he rented out his home- but it does in a lot of cases.)

There has been talk in various places of taxing unlived in properties- i havent thought too much about it, but it might be a good idea.

That’s what holiday destinations are. Seasonal.

 

[Baloo]

Why the arbitrary cut off of 44? Some people are just starting families in their 40s and I don’t know many (any) who had no dependent kids by the time they turned 50.

Somaros should tell us who these mystery landlords are, not who (he thinks) they are not.

If you read the thread he addresses the age and even shows the numbers if he lifts it to 55.

 

[22nd Man]

Interesting discussion.

I think these things should be applied with more nuance, a blanket hit on investment properties drags in people who have circumstances not really appropriate for it.

For a lot of people an investment property is effectively their super, without the means or knowledge to set up a self managed super fund provision.

Anyone who is negatively geared would almost always be better served with another investment.

a large proportion of self managed super funds are set up to acquire residential property. Whether it’s in a tax shelter like super or not they are still “investment” properties. In fact for many people the only means they have to buy an investment property is the existing balances in their employer funded super fund.

Negative gearing can be applied to other assets not just property. Principle is exactly the same its no magic wand.

 

[22nd Man]

If you read the thread he addresses the age and even shows the numbers if he lifts it to 55.

I read it. his selective case would have been stronger if he had used 55 in the first place. It still doesn’t mean someone 65 is a property mogul. Nor does it lift the veil on the identity of the mystery landlords.
and i read a couple of dozen of the follow on comments. Reinforced my far sighted stance to ignore twitter. If Anything really worthwhile is ever said on it it will make its way onto mainstream media.

 

[Baloo]

I read it. his selective case would have been stronger if he had used 55 in the first place. It still doesn’t mean someone 65 is a property mogul. Nor does it lift the veil on the identity of the mystery landlords.
and i read a couple of dozen of the follow on comments. Reinforced my far sighted stance to ignore twitter. If Anything really worthwhile is ever said on it it will make its way onto mainstream media.

You have a lot more faith in MSM than I do.

 

[K3]

Off the short-term rental topic, and onto state government tender processes and awarding...

‘Serious concerns’: Losing myki bidder raises questions about tender process

Cubic Transportation Systems missed out on the public transport ticketing contract and has sent a letter sent to Premier Daniel Andrews raising its “serious concerns about possible errors in the tender process”.

www.theage.com.au

With the original myki winner resulting in an absolute dog *smile* system being put into place, I can but hope the correct processes have been gone through this time around!

 

[Brodders17]

That’s what holiday destinations are. Seasonal.

Not for the people who live there all year round.
While tourism brings a lot of good, small towns becoming hollow shells for a large portion of the year, while holiday rentals lay empty, is not a good outcome. (probably getting into a different discussion here!)