Amazulu

Because Germany has a backward 'rent for life', almost feudalesque culture, property ownership is concentrated in the hands of a small minority. This minority is wealthy and uses negative gearing to reduce their tax burden - the opposite of Australia and something that you rail against

Hypocrisy in other words

If someone doesn't own the property in which they live, someone else does. In countries with low levels of property ownership, the people that do own it form a wealthy elite - with the renters basically being their bitches

The point I was trying to make is that many nations have some form of NG but you choose to see this as a positive - apart from in Australia, where in your opinion NG is bad

Hope this helps

the troubadour

Because what is termed NG in Australia has become an out dated disaster in the Australian/NZ/ Canadian landscapes, where population Ponzi's form the basis of policy combined with overseas investors that feed the fire which in turn amounts to a highly leveraged and dangerous property market. Bad for the economy and bad for those not in or reasonably new to the market.


Sadly Germany is heading the same way with construction booming like early 90's and people being priced out of centres like Berlin and Munich.


Very high immigration like Australia is playing a big role and sectors within the ruling conservative German government desiring a more Anglo Saxon take on property leading to higher rents on new builds.


Still I know rich Germans that do not invest in housing as small returns until recently and tax deductions relating to housing having nothing like the impact that NG has on the Australian market for FTB's .


Germans are not as engrossed on the altar of housing ownership as others. We have had the same renters in one case for about fourteen years other case four years. Yield far higher than the Australian market based on price of purchase but sale price not much increased over the year once inflation taken into account.


Like I say the market is sane in Germany with stability the desired outcome. The casino economy too evident in Australia would drive many there to despair.

the troubadour

Now Westpac and ANZ have 'discovered' they have approved 'hundreds' of home loans backed by fraudulent Chinese income documents which were allegedly manufactured with the help of dodgy dealers.


No worries still bounding with confidence with the housing Ponzi that has become Australia. Trust we are all still on board and cheering on the next anticipated rate cut and ever rising house prices.

the troubadour

One thing can be reasonably sure about is that grass doesn't tend to grow under the feet of policy in Australia.
Changes are frequent and unpredictability is rather the norm. Statesmanship rather unheard of and short termism, sprinkled with a hefty dose of populism being more the pattern.

Beoz

Unfortunately for those who wish to buy their first property, clamping down on these fraudulent loans is only likely to effect 0.12% of the mortgages on the books of these institutions.

Though the bigger issue is a crash and how far it can fall and what it can do to the economy with so much tied up in property.

Of course I'd only ever expect the social democrats to think about me me me and now now now.

Swerv-o

Not strictly true - Negative Gearing in Germany is limited to tax deductions only on the asset that is generating the income - there is no opportunity to apply losses made from a rental property to your general income tax, as you can in Australia. This is the same in the UK as well - there is no mixing of the so called income streams.

It looks as though only Japan allows unfettered negative gearing in the same way as Australia does.

TBH, I think this could be a good way to go here - limit deductions to the assets or asset classes that are generating the income. This doesn't seem unreasonable - a sensible way to deal with expenses arising from an income generating asset.


S

Amazulu

Sure, I hear what you are saying, but you know as well as I that investments can be structured to maximise tax benefits - whatever class they are in

I think NZ also allows NG similar to Australia - and they have no CGT

Maybe limiting asset classes in relation to NG would be a good idea, but abolishing it altogether would not be good

Amazulu

I'll ask the question again (the one that you failed to answer previously), why is the migration of nearly 1 million 3rd world muslims into Germany good for that country but limited, structured and organised migration a ponzi scheme in Australia's case?

Good to see that Germany is starting to reform and move away from a feudal-level rent for life culture towards home a ownership model. That nation will benefit as a result

Swerv-o

There are certainly some places to start. Limiting NG on overseas properties being one. It seems ridiculous that I can take a mortgage on a chateau in the South of France and negatively gear it against my Australian income tax. That doesn't benefit anybody in Australia (apart from me) - in fact it has a negative effect in that the Australian tax payer is helping me pay for my French pile.

NZ allows transferring of income streams, but there are restrictions to how much can be offset, and also offsets can only be realised if the asset is producing an income stream at market rate.

Personally, I'm not keen on it, and when I have paid off the French place I won't do any more negative gearing...


S

Beoz

Just curious, what is the yield like on the Chateau?

Swerv-o

It's rubbish, but will make a very picturesque retirement retreat


S

Beoz

It must be rubbish if you are forced to negatively gear, but yes, what an awesome place to retire to.

I think the Libs will be hard pressed to do entire campaign without something for first home buyers.

There may be a tweak to negative gearing, or some type of rejuvenation of the first home buyer scheme where the new investors pay.

There's no reason why they shouldn't. Labor haven't got their approach right so there's plenty of wriggle room.

At the end of the day the gap between the rental income and mortgage repayments needs to be closed so the taxpayer stops supporting bad investments.

Swerv-o

My GF's brother is the CEO of a superannuation company, and used to sit on the NAB board. He's cautioned against investing in ng properties at the moment, because the risk of ending up with a huge negative equity millstone is high. NG relies too heavily on making a capital gain on a property investment, which can, as you say, go bad.

I dislike it because it also encourages people to take on more debt than they really should be getting involved in. I saw it here at work when the last receptionist - earning around $70k - was trying to take out mortgages for two investment apartments in Cronulla. I wouldn't have said she was paying enough tax to make it anywhere near worthwhile - particularly once you have paid the stamp duty and other compliance costs. She adamantly believed it was the right thing to do though, because it was what all of her friends were doing. Had to keep up with the Jonses I guess...


S

the troubadour

Well no as it was likely to become ever more widespread, but not at all surprised you find it of so little concern. Nor the laundering of foreign money in the property market either I guess.


The crash will of course impact on the economy as a whole. The bigger the bubble though the greater the impact. It would appear the chances to arrest the bubble have well and truly passed.
Rather amazing, (not really rather expected) you never attack the policy that created the malinvestment bubble but take delight in attacking the messenger. Of course never offering anything to rectify the situation.


It would seem to me those of your ideology are the truly selfish ones, refusing to criticise the direction of policy and especially the part played by financial institutions.


Social democrats wondering whose going to pick up the pieces and bail them out when the real rot sets in.

the troubadour

That's the way. Showed up for your lack of knowledge on the German economy and change tack to broaden further display ignorance in claiming this writer supports something they don't.
What was pointed out of course was the differing attitudes between the two nations in refugee intake. In fact this writer questioned the governments reasoning behind the famous statement.


You should be applauding. One million migrants will do wonders for the housing market, for those that support such obscenity of course.


Feudal? No way. The increasing ability for people to be able to establish a household due to price and a Ponzi market is what is feudal.


Controlled immigration in Australia? Controlled to fed the Ponzi regardless of need and far from free of corruption and around about ways like 457's to student visa's and what have you.


By focusing on the prevention of a few boats, it is hoped the general public's attention will not be turned onto the immigration program.
Not entirely successful, I might add, with 457 abuse coming more out into the public domain with more exposure.