What do we stand for?

I am not sure if this has been discussed before, but it occurred to me that although we are individuals we nevertheless all have in common an interest in property investing and that as a result that there are probably quite a few common views on things that bind us together.

I am wondering what those views could be?

I am not claiming that this is an exhaustive list.

MB



National (Commonwealth Government) Issues

Negative gearing
- Leave it?
- Tighten the rules to make it harder?
- Make it easier / more generous?


Depreciation
- Do we want the rules changed / expanded?


Interest rates / CPI
- Is there an optimum interest rate?
- Do we support the 2 - 3% CPI band?


Economic Management
- Do we have a view on general economic conditions and the sorts of policies we would like to / not like to see?


Income Tax Policy
- Should PAYE rates be increased / decreased?
- Should the thresholds for the various marginal rates be amended?
- Should the whole thing be scrapped and rebuilt?


CGT
- Do we think it should be abolished?
- Should it be increased? (ha!)
- Should it be decreased?


First Home Owners Grant ($7000)
- Scrap it?
- Reduce it?
- Leave it?
- Increase it?


Superannuation
- Would we like access to our superannuation so we could buy more IPs?
- Would we like to see tigher regulation of the fees that fund managers can charge, given that it is compulsory to have superannuation and choice of super fund is foreign to many of us?


Non-tax deductibility of PPOR repayments
- Do we support this policy because it makes buying a PPOR more expensive (after-tax dollars), hence more renters?
- Do we want the US system where PPOR repayments are a tax deduction?


Consumer Protection Regulation
- Should Sharks be targeted less / the same / or even more by the ACCC and ASIC?
- Should REA's be licensed ala Financial Planners under the FSRA?


Kyoto Protocol
- Should Australia ratify this (bearing in mind the affects it could have for certain industries and towns)?



National / State / Territory Issues

Land releases
- Do we want more land released for development and, if so, where?
- Do we want certain areas protected and deemed "never to be developed"?


Building Standards
- Should Governments further encourage eco-friendly designs?
- Are building standards adequate? (particularly for places exposed to cyclones)


Transport
- Do we want a VFT on the eastern corridor? (VFT = rising land values along its path)
- What do we want to see in terms of roads, etc?


Water
- More dams?
- Better use of recycled water?
- A system that captures rain water falling in cities?



Jurisdictional (ie. State / Territory) issues

Tenancy Laws
- Any views from State to State? (too lenient / too tough / just right, etc)


Stamp duties
- Increase / decrease / abolish?
- Exemptions for first home buyers?


Vendor Tax (NSW) (2.25% of sale price)
- A silly tax that should be abolished?


Land Tax
- Abolition?
- Or at least increase / re-establish the tax-free thresholds?


REA regulation
- Too lax?
- Just right?
- Too harsh?


Auction rules
- Are they balanced or biased (either way)?


Sales Data
- Would we like some better / uniform approach to the collection and calculation of sales data?

Pitt St said:

I am not sure if this has been discussed before, but it occurred to me that although we are individuals we nevertheless all have in common an interest in property investing and that as a result that there are probably quite a few common views on things that bind us together.?

Click to expand...

A great question Pitt St!

There could be, but almost every change will hurt one group and benefit some others. And there could be unanticipated side-effects. The vast bulk of people will be either unaffected or will find both positives and negatives.

I think most investors tend to be fairly passive politically. They're more likely to think how they can benefit from a certain change (perhaps also visiting their accountant) than arguing for or against it.

And that goes for things that might be seen as pro or anti-investor in the tabloids, but the reality is more complex:

Eg:

1. Scrapping negative gearing = possibly excellent buying opportunities as others sell

2. Making super funds available for first homebuyers = great chance to sell as market heats

3. Govt first homebuyers grant = same as above

4. Increasing income tax rates = less in the pocket but tax deductions/negative gearing become more important

5. CGT up for assets sold after a certain date = Amazing buying opportunities as sellers rush to sell before a particular date.

6. CGT on the family home = again lower house prices but possibly higher rents

7. Cuts to bus services = houses near railway stations become less affordable/have higher cap growth

8. Improvements to bus services = proximity to a railway station becomes less important for buyers/renters

9. Low inflation = good as it means costs are predictable and kept down but bad as it means that real value of debt does not diminish as quickly relative to your IP's worth (though interest rates are also a factor and except for the 1970s inflation and interest rates go together)

I suspect that getting IP investors to think similarly is like hearding cats, and we're more interested in thinking about opportunities for 'what is' than warrying about what has been or what may be.

Rgds, Peter

Hi,

It's probably without a doubt that everyone on this forum would 'vote' for lower interest rates, lower capital gains tax and everything else that directly benefits our property investment missions.

However, as Spiderman has mentioned, I doubt there is such a thing as win-win situation when it comes to how changes such as the ones in your list would affect certain communities / demographics.

In addition to that, I think a good investor is one who can do well despite the variables in their 'environment'.

-kind regards

Dave

Pitt St for PM

interesting thoughts Pitt St.

Do I hear a Pitt St for PM campaign starting ?

So out of interest, where do you stand on these issues ?

There certainly is a role for a Lobby group to put the views of property investors. . We have a shareholders association and even the Vendor Finance association.

See Change

see_change said:

Do I hear a Pitt St for PM campaign starting ?

Click to expand...

Why would Pitt Street want to be a Property Manager?

geoffw said:

Why would Pitt Street want to be a Property Manager?

Click to expand...

When he has fifty IP's , fully owed , he'd probably be happy to be a PM, or employ his own.


See Change

see_change said:

When he has fifty IP's , fully owed , he'd probably be happy to be a PM, or employ his own.

Click to expand...

Fully owed? I don't think he'd want that

I guess he wouldn't want to be a PM in the medical profession either.

Excellent thread Mark.

Was going to try answer all the issues raised here, but in all honesty I don't think I know enough about many of the topics to come up with something worth posting.

However, I'm very curious to see what other forumites have to say, but I fear that your post might containt too many thoughts and many of us will just think "too hard" instead of sharing their thoughts.

Should be a very entertaining thread, if it kicks off well...

James.

see_change said:

So out of interest, where do you stand on these issues ?

Click to expand...

Here goes......




National (Commonwealth Government) Issues


Negative gearing

So far, no complaints. Leave it as it is.



Depreciation

Again, no complaints. The different treatments of different aged properties allows people to take advantage of certain situations.



Interest rates / CPI

I do not support the 2 - 3% CPI band.

I think it should be higher, perhaps 3 - 5%.

This would give interest rates of around 8 - 9% on a variable mortgage.



Economic Management

I am opposed to the fixation on budget surplusses. I said in another post recently that I would support deficits so long as they could be attributed to long-term "nation building" projects that benefitted Australians for years to come.



Income Tax Policy

The economic modelling would need to be done, but my immediate preferance would be for fewer marginal rates / a higher tax free threshold / higher thresholds for when the upper marginal rates kick in

I would also put the GST on everything.

I would increase company tax rates to 35% (from 30%).



CGT

Maybe some preferential treatment for people who have built assets over a long period of time (say 10 years).



First Home Owners Grant ($7000)

Scrap it.



Superannuation

While I would LOVE access to my superannuation so I could buy more IPs, if everyone did that then I would not gain much.

So I would like to see tighter regulation of the fees that fund managers can charge, given that it is compulsory to have superannuation and choice of super fund is foreign to many of us.

I would also like the option of not having the 9% paid to a superfund, on the proviso that it went into some other long term investment that I could control.



Non-tax deductibility of PPOR repayments

Leave them as non-tax deductible.



Consumer Protection Regulation

Sharks should be targeted more by the ACCC and ASIC.



Kyoto Protocol

Hmmmmmmmmmm...... yes, ratify it.

I have seen studies that say that ratying Kyoto will cost billions, but if we don't ratify it we will never have the incentives to change our ways.




National / State / Territory Issues



Land releases

If Government's do want to reduce the cost of buying for new houseowners, then FHOG and Stamp Duty exemptions are not the answer. The answer is to increase supply and this means:

- more land for development
- allowing developers to make a profit

I also support increased protection of what little native bush, etc that there is remaining.



Building Standards

I think the Government should further encourage eco-friendly designs.

After talking to some people in the insurance industry, I have doubts about the adequacy of building standards and their capacity to withstand a powerful cyclone in Nth Qld (Darwin has already learned its lesson).



Transport

Yes to a VFT on the eastern corridor

Yes to better train networks to get trucks off the roads

Yes to a dual carriageway (road) between Sydney and Brisbane




Water

Build more dams!

Better use of recycled water.

A system that captures rain water falling in cities.

I would also like to see politicians mouths washed out with brown water. After all, that is what most of them seem only to be able to speak.



Jurisdictional (ie. State / Territory) issues



Tenancy Laws

So far so good for me, no views as yet.

But, I have heard the stories of other forumites and their experiences with "the tribunal". So, based on that, I think it should be easier to turf bad tenants than it appears to be.



Stamp duties

Remove exemptions for first home buyers.

Re-adjust the stamp duty rates so that they are more realistic.

Consistent stamp duty rates in all jurisdictions



Vendor Tax (NSW) (2.25% of sale price)

Abolish this tax and get rid of Bob Carr.



Land Tax

Re-establish the tax-free thresholds where they have been scrapped.



REA regulation

I have no views as yet.

That is, I have yet to have any really bad experiences.

But I am not suggesting that it be made easier to become a REA or that they be subject to any less regulation.



Auction rules

Though I have never been involved in an auction, I would like to see (if it has not happened already):

- All bidders pre-register and get a number

- Bidding only taken from registered bidders

- All bids written down as well as the number of the bidder

- Tigher rules on Buyer Enquiry Ranges, such that they actually have a meaning - and are not below the reserve price - rather than being used to attract hopeful people who really have no chance of buying.

- Where dummy bids are shown to have been taken - I would like to see the REA be forced to find alternative employment for a few years as well as being substantially lighter in the hip pocket.



Sales Data

I support better co-ordination of data. If it can be done for shares, why not property?

When it comes to data from auctions. Vendors bids, etc, should be excluded from the data set.



MB

Negative gearing
- Leave it?
- Tighten the rules to make it harder?
- Make it easier / more generous?

Click to expand...

Abolishing NG would hurt the vast mayority of property investors who (I think it is 90%) own only one IP offset against their income. Fantastic for the professional investor, bad for the mum and dad and terrible for the tenant.

Depreciation
- Do we want the rules changed / expanded?

Click to expand...

To limit depreciation at a certain year sucks in my opinion.

Interest rates / CPI
- Is there an optimum interest rate?
- Do we support the 2 - 3% CPI band?

Click to expand...

Interest rates go with offer and demand, I love the negative interest rate thay had in Japan, but ... considering that people rush to buy when interst go down and rush to sell when they go up, regardless of the fact that in 25 years they will do so 100 times ... tinkering with interst rates is like playing with explosives.

Economic Management
- Do we have a view on general economic conditions and the sorts of policies we would like to / not like to see?

Click to expand...

More government initiatives on large infrastructure projects.

Income Tax Policy
- Should PAYE rates be increased / decreased?
- Should the thresholds for the various marginal rates be amended?
- Should the whole thing be scrapped and rebuilt?

Click to expand...

For me a flat rate for income tax is what should be in place.
Failing that, a system like in Singapur, 4% income tax and 40% superannuation contributions.

CGT
- Do we think it should be abolished?
- Should it be increased? (ha!)
- Should it be decreased?

Click to expand...

CGT should have a decreasing component. The longer the period incurred for the capital gain, the smaller the tax to be paid, possibly using inflation figures.

First Home Owners Grant ($7000)
- Scrap it?
- Reduce it?
- Leave it?
- Increase it?

Click to expand...

Scrap it.

Housing department, scrap it. Sell all the proeprties and replace it with subsidies for people in real need.

Superannuation
- Would we like access to our superannuation so we could buy more IPs?
- Would we like to see tigher regulation of the fees that fund managers can charge, given that it is compulsory to have superannuation and choice of super fund is foreign to many of us?

Click to expand...

No access to super funds yet ... increase substancialy compulsory contributions, make such contributions tax deductible and ban all tax to superanuations.

Non-tax deductibility of PPOR repayments
- Do we support this policy because it makes buying a PPOR more expensive (after-tax dollars), hence more renters?
- Do we want the US system where PPOR repayments are a tax deduction?

Click to expand...

UK also has tax deductions for the interest paid on PPOR. I think it is a good idea.

Consumer Protection Regulation
- Should Sharks be targeted less / the same / or even more by the ACCC and ASIC?
- Should REA's be licensed ala Financial Planners under the FSRA?

Click to expand...

Having had a close encounter with the ACCC myslef, they have no real credibility in my personal view so cannot comment in an impartial manner.

Kyoto Protocol
- Should Australia ratify this (bearing in mind the affects it could have for certain industries and towns)?

Click to expand...

It is difficult to read between the lines of green be it war or peace. Environmental issues are loaded with intentional misinformation, excess zeal, secret treaties hidden agendas and captured CO2. Meantime we have been drinking milk contaminated with herbicides, pesticides and even radioactivity.
What about coocking my own biodiesel in the backyard?
Oh! forgot that the Tax Department outlawed it and now I need a license and to pay excise ... bummer.

Land releases
- Do we want more land released for development and, if so, where?
- Do we want certain areas protected and deemed "never to be developed"?

Click to expand...

Pleeeeeeese no more land release in Sydney ... someone stop it!!!!!!!!!

Building Standards
- Should Governments further encourage eco-friendly designs?
- Are building standards adequate? (particularly for places exposed to cyclones)

Click to expand...

Not sure about ciclones but the building code must be inmprooved and it would be so easy to do it at little additional cost. Solar W heaters, rain water tanks, grey water, heat efficency, better architecture, better structure standards, ban the concrete slabs thinned with poliestyrene boxes, the houses with no eves, the two story houses on a 90x45mm pine structure etc etc

Transport
- Do we want a VFT on the eastern corridor? (VFT = rising land values along its path)
- What do we want to see in terms of roads, etc?

Click to expand...

VFT? Absolutely !

Water
- More dams?
- Better use of recycled water?
- A system that captures rain water falling in cities?[\QUOTE]
Yes, yes, yes.

Tenancy Laws
- Any views from State to State? (too lenient / too tough / just right, etc)

Click to expand...

Anyone professing socialist or communist tendencies to be banned from working in the RTT )

Stamp duties
- Increase / decrease / abolish?
- Exemptions for first home buyers?

Click to expand...

I would like to know how my SD money is being spent.

Vendor Tax (NSW) (2.25% of sale price)
- A silly tax that should be abolished?

Click to expand...

Absolutley, and return the money stolen so far. Robin Hood is a theef and should be in gaol.

Land Tax
- Abolition?
- Or at least increase / re-establish the tax-free thresholds?

Click to expand...

Abolish land tax on PPOR regardless of value. Land tax on a sliding scale is fair.

REA regulation
- Too lax?
- Just right?
- Too harsh?
Not sure

Auction rules
- Are they balanced or biased (either way)?
Lately improoved slighty in NSW, should be even more transparent

Sales Data
- Would we like some better / uniform approach to the collection and calculation of sales data?

I don't think people should wear uniforms....

Click to expand...

I have the perfect name

POA , Property owners association.

See Change

Can't say I agree with this one (below). Marc, can you explain why this would be good for professional investors, especially those who use negative geared properties en masse to create wealth?

Yes, it would create many buying oppurtunities as single IP owners rush to sell theirs for fear of huge cashflow problems. But, I can't see how this is a good thing in the long term. Remember last time?

James.

marc1 said:

Abolishing NG would hurt the vast mayority of property investors who (I think it is 90%) own only one IP offset against their income. Fantastic for the professional investor, bad for the mum and dad and terrible for the tenant.

Click to expand...

JamesGG said:

Can't say I agree with this one (below). Marc, can you explain why this would be good for professional investors, especially those who use negative geared properties en masse to create wealth?

Yes, it would create many buying oppurtunities as single IP owners rush to sell theirs for fear of huge cashflow problems. But, I can't see how this is a good thing in the long term. Remember last time?

James.

Click to expand...

Well, my thinking goes like this. Abolishing NG stops the single IP investor that had a separate income. He/she will sell it since the main purpose will be gone and flood the market bringin prices down. IP would become the thing for people who own a number of properties in a trust or a company where losses can be deducted against profits inside the company.
The scrapping of NG would have a huge social cost, increase rent and concentrate RE in fewer hands.
I do not support it..or .. hm..... can I think for a little longer?

Pitt St[I said:

Sales Data[/I]
- Would we like some better / uniform approach to the collection and calculation of sales data?

Click to expand...

Actually, interesting that you mention this as I read in the paper a few weeks ago that this is becoming a real issue lately, with data being collected in different ways and being very confusing to the general public. Residex collect it one way, REINSW another etc. Some data is fresh or out of the horses mouth, whilst other info is more than 3 mths old by the time it's released. Why can't the prices all just be collated from the date of sale (ie when the contract becomes unconditional) rather than all these varying ways?

I'd rather have 10 misleading statistics on which to base an opinion on than one

The Australian
http://www.theaustralian.news.com.au/common/story_page/0,5744,10971344%5E601,00.html

Rich beat tax with negative gearing
Michael McKinnon, FOI editor
October 05, 2004
THE negative gearing of investment properties allowed the wealthy to escape Australia's internationally high rates of income tax, a report commissioned by the Reserve Bank has found.

The report, produced for the RBA in 2002 by consultants Ernst & Young and obtained by The Australian under Freedom of Information laws, said the biggest negative gearing advantages were obtained by those borrowing 80 per cent or more of the purchase price of investment properties.

Both the Coalition and Labor have ruled out changes to negative gearing, which provides at least $3.8 billion a year in tax cuts to property investors.

But the report findings coupled with previous RBA statements, support the view that poorer Australians have struggled to buy homes or pay mortgages because of rising property prices fuelled by rich investors using negatively geared investments to cut income tax.

The report was prepared as part of the RBA's submission to the Productivity Commission's inquiry into first-home ownership, but the specific findings about negative gearing were not included.

Instead, the RBA's submission "encouraged" the commission and "others more expert in tax matters than the bank, to examine the current arrangements".

While the RBA would not comment on the report yesterday, it told the Productivity Commission that "investors have been contributing disproportionately to the increase in housing demand over recent years, with the effect that affordability, especially by first-home buyers, has been reduced".

The RBA's report found Australia's relatively high income tax rates encouraged negatively geared property investments.

"Negative gearing tends to favour investors that are at the highest marginal tax rate," the Ernst & Young report found.

"In Australia, the top marginal tax rate cuts in at a lower level of income than in the other countries (and) negative gearing at levels of 80 per cent or more can actually offset the disadvantage that would normally be associated with high tax rates."

The report compared property investment in Australia, Canada, Britain and the US and found broadly similar taxation regimes for residential property investment.

"In Australia, the top marginal tax rate cuts in at a lower level of income than in the other countries and it is possible that Australian investors may have a higher incentive to negatively gear their investments than investors in the other three countries," the report said.

In July last year, Mark Latham, who was then Opposition treasury spokesman, raised the prospect of reviewing negative gearing but the plan was quashed after intervention by then Labor leader Simon Crean.

Former prime minister Paul Keating abolished negative gearing in the 1980s, only to be forced by a housing slump to reinstate it.

Earlier this month, a housing, welfare and union alliance warned higher rents, crippling mortgages and a market collapse were inevitable unless "distorting" tax breaks were removed to make housing more affordable.

As you can see it is all the fault of the filthy rich that trample on the poor and disadvantaged for their own cynical purposes. Shame on you guys who buy so many properties, greedy, you are all greeeeedy.

PS
My commet is an attempt at humour, a joke OK?

Marc1 comment and article above point out rightly NG is popular because of the high tax versus lower CGT.

If they were equal, i.e. NG was only allowed at 50% of the loss the same way you only get taxed on 50% of the gain then a lot would go elsewhere.

I will reply in full to Pitt St List but overall anything that levels and simplifies tax is GOOD thing.

Peter 147

My thoughts by Peter 147

Pitt St said:

I am not sure if this has been discussed before, but it occurred to me that although we are individuals we nevertheless all have in common an interest in property investing and that as a result that there are probably quite a few common views on things that bind us together.

I am wondering what those views could be?

I am not claiming that this is an exhaustive list.

MB



National (Commonwealth Government) Issues

Negative gearing
- Leave it?
- Tighten the rules to make it harder? MAYBEE
- Make it easier / more generous? NO WAY


Depreciation
- Do we want the rules changed / expanded?
NO CHANGE

Interest rates / CPI
- Is there an optimum interest rate? NO
- Do we support the 2 - 3% CPI band? YES!


Economic Management
- Do we have a view on general economic conditions and the sorts of policies we would like to / not like to see?


Income Tax Policy
- Should PAYE rates be increased / decreased? DECREASED
- Should the thresholds for the various marginal rates be amended? INDEXED FOR INFLATION
- Should the whole thing be scrapped and rebuilt?A GOOD IDEA BUT NO REASON OTHER THAN MARKETING SPIN

CGT
- Do we think it should be abolished? NO
- Should it be increased? (ha!) NO IT PROVIDE AN INCENTIVE TO INVESTMENT THIS COUNTRY NEEDS
- Should it be decreased? NO


First Home Owners Grant ($7000)
- Scrap it?
- Reduce it?
- Leave it?
- Increase it?
SIMPLIFY IT BY DELECETING IT AND INSTEADABOLISHING STAMP BUTY FOR ALL FIRST HOME BUYERS TO GIVE EVERYONE A CHANCE LIKE NSW - SAVING IN PAPERWORK

Superannuation
- Would we like access to our superannuation so we could buy more IPs? NO WAY, SEND IN THE HENRY KAYES!!!
- Would we like to see tigher regulation of the fees that fund managers can charge, given that it is compulsory to have superannuation and choice of super fund is foreign to many of us? ABSOLUTELY


Non-tax deductibility of PPOR repayments
- Do we support this policy because it makes buying a PPOR more expensive (after-tax dollars), hence more renters?
- Do we want the US system where PPOR repayments are a tax deduction? TOUGH ONE - ON ONE HAND THIS WOULD HELP FHO GET IN AND BUY THE BEST ASSET THE CAN GET- A HOME, BUT IT WOULD ALSO ENCOURAGE OWNERSHIP AS AN INVESTMENT WHICH WOULD OVERALL INCREASE PRICES NEGATING THE EFFECT. LOWER PAYG PAYMENT IS SIMPLIER AND NON INFLATIONARY TO HOMES SPECIFIC

Consumer Protection Regulation
- Should Sharks be targeted less / the same / or even more by the ACCC and ASIC? MORE MORE MORE
- Should REA's be licensed ala Financial Planners under the FSRA? CANNOT COMMENT


Kyoto Protocol
- Should Australia ratify this (bearing in mind the affects it could have for certain industries and towns)?
YES


National / State / Territory Issues

Land releases
- Do we want more land released for development and, if so, where? YES & NO : WE NEED TO, AS WE ARE , ENCOURAGE MORE MEDIUM DENSITY LIVING AND NOT MORE LARGE GREEN FIELDS SITES, WE NEED TO SET ASIDE GREEN BANKS
- Do we want certain areas protected and deemed "never to be developed"? YES


Building Standards
- Should Governments further encourage eco-friendly designs? YES
- Are building standards adequate? (particularly for places exposed to cyclones) YES, BUT THE CHECKING IS POOR AND THE INSURANCE WORTHLESS IN NSW


Transport
- Do we want a VFT on the eastern corridor? (VFT = rising land values along its path)
- What do we want to see in terms of roads, etc?
ANOTHER TOUGH ONE - TECHNOLOGY AND TIME DEMAND HAVE MADE TRAINS INEFFICENT COMPARED TO PLANES. ALL PUBLIC TRANSPORT QUESTIONS IN aUST ARE HARD BECASUE WE HAVE ONLY 20m USERS AND LOTS OF SPACE TO SERVE

Water
- More dams? YES
- Better use of recycled water? YES
- A system that captures rain water falling in cities? YES



Jurisdictional (ie. State / Territory) issues

Tenancy Laws
- Any views from State to State? (too lenient / too tough / just right, etc) LENIENT


Stamp duties
- Increase / decrease / abolish? ABOLISH PART OF REVAMP OF TAX SYSTEM
- Exemptions for first home buyers? KEEP


Vendor Tax (NSW) (2.25% of sale price)
- A silly tax that should be abolished?
ABSOLUTELY, A GOUGE OF THE WORST TYPE

Land Tax
- Abolition? B]ABSOLUTELY, A GOUGE OF THE WORST TYPE[/B]

- Or at least increase / re-establish the tax-free thresholds?


REA regulation
- Too lax?
- Just right?
- Too harsh?
OK

Auction rules
- Are they balanced or biased (either way)?
BALANCED

Sales Data
- Would we like some better / uniform approach to the collection and calculation of sales data?

Click to expand...

YES, BUT IT AINT GUNNA HAPPEN