00:02Negative gearing rules enable you to deduct from the income that you make in your job losses that you make
00:09in relation to an investment property that you own or other investments that you own.
00:16Alongside that are a set of rules as to how you might be taxed when you make gains from those
00:20investments.
00:21But talking specifically about negative gearing it means that someone who's on a very high income can effectively deduct losses
00:27and pay less income tax while their investment is growing in value.
00:32Now what we find is that internationally these rules that Australia has whereby you can use investment losses to cut
00:40down how much income tax you pay are really unusual.
00:42Very very few countries do it and they sit alongside a set of discounts that we have for when you
00:49eventually sell your property and make a capital gain you get a very preferential tax concession at that point.
00:56And so the negative gearing that you get on the way through alongside the capital gains tax concession that you
01:02get when you sell the property combined to make housing a very lucrative investment.
01:06The principal effect that our recommendations would have so you know just pulling back a little bit on negative gearing
01:13and halving the capital gains tax discount.
01:15The principal effect that would have is shifting the number of investors and the number of first home buyers in
01:22the market.
01:23So we actually don't think there'll be a huge impact in prices.
01:26We estimate it to be about 1% which is really not very much given how much price growth we've
01:30seen.
01:31Likewise we don't estimate there to be significant impacts on supply or significant impacts on rent.
01:37Again we've got some estimates there they're pretty small.
01:40But the biggest impact is in that changing composition.
01:43So we'll see less investors borrowing money to go into the market and we'll see them being replaced by first
01:48home buyers.
01:48And that's the really important point because what we've seen through this period of escalating house prices and increasing numbers
01:55of investors is we've seen home ownership drop in the Australian population
01:59and particularly for younger generations.
02:01And that's the thing that we really need to address and why we think that these absolutely should be in
02:07the Treasurer's consideration as part of this budget process.
02:10A feature hasっと散れる information that we've logged in and separated from day 3, or on the ground is $3,7254
02:10minimum,net $3254.
02:10It's really a fun product that we can use.
02:11Pretty much money is money to pay back from time.
02:11So I'm also going to buy this, but it's affordable for money to pay back, leave back, and stop letting
02:11lands down the floor of the day 3, if you don't have to buy back.
02:12If I am excited, let's say I'm going to do now 3, if you just don't have a choice.
02:12So we can pay back any tools.
02:12Now I would look tight.
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