SHALLOW ARGUMENTS AGAINST NEGATIVE GEARING

10 Mar 2016

The debate on negative gearing is getting sillier and sillier. The basic line is too many wealthy people are benefiting from structuring losses on property. Firstly the figures quoted are rubbery. Presumably the ATO is quoting total losses claimed on property, as deliberate negative gearing through high borrowing. There are many other ways a loss can occur in any one, tax year. The property could be vacant for all or part of the year, there may have been large rental arrears or substantial repairs, rent may have been paid in a previous year or the taxpayer may have paid interest or expenses in advance. For new properties, there are also substantial upfront depreciation allowances (more than $10,000 on a 2 bedroom unit). Is the ALP saying they will disallow these losses, which are real? Some hard research on the actual situation from both sides is needed, before any changes are made.