<html><body>
OK, Philip Soos, I’ll bite.
Your article earlier this week on negative gearing has really ticked me off – and you can’t call me ‘the property lobby’ because I’m primarily a stay-at-home mum and a part-time journalist who used to run around after politicians for a living on the telly.
I’m a property investor too – thank goodness – but I should warn you that negative gearing on property investments all through my 20s certainly paved the way for me to spend the last seven or so years at home, raising two new little taxpayers. You’re right, what a dreadful policy, only benefiting “the rich”.
Who are these “rich” people?! Let’s find them and burn their houses down! They’re certainly the bad guys <a target="_blank" href="/property-observer">in your article, Mr Soos.</a>
I could go on and on about the benefits of private investment in the property industry, despite your determination not to understand them. Try to think of it, if you would, as the original public-private partnership. Governments always have and always will need private citizens to invest in property, therefore providing a bigger rental pool for other private citizens. I hate to be all anti-progress about it, but there just isn’t a better way of doing it for a lazy $3 billion a year.
For this very large effort and ongoing commitment by the investors, there needs to be some sort of reward. People everywhere are great, but generally speaking in a business sense, people don’t do things for others for free.
The point of my response is not to get bogged down in policy debate. What I can tell you is what’s happening on the ground. Negative-gearing property investors are people, too. We’re workers, we’re mums and dads, we’re small business owners, and we’re taxpayers. We’re putting in the hard yards on the ground in the rental industry, and we’ve been doing it for years. Years and years.
I’ve renovated for profit every night and weekend for months, I’ve responded to tenant disasters in the middle of the night, I’ve picked up the pieces when good tenants go bad, I’ve experienced the best and worst of human nature as a self-managing lessor.
I’ve claimed losses, I’ve paid capital gains tax, I’ve put profits back into the economy and I’ve saved money to live off while our children are small. I’m also unlikely to need a pension in retirement –  here’s hoping, anyway.
 
<hr class="system-pagebreak">
 
I’m far from a blight on society, Mr Soos, and I’m certainly not alone. As you’ve pointed out, there are well over a million property investors just like me. We’re a brave lot, and I firmly believe – no, I know, from experience – that our significant contribution outweighs our tax breaks.
Yes, some of us speculate, but many other taxpayers choose not to take on the associated risks and extra hard work. That’s their choice. That’s the difference.
By the way, your assertion that “a salaried employee” doesn’t get tax breaks associated with earning an income, is also wrong. Anyone who works or studies 20 hours or more per week gets 50% of their childcare costs back, paid quarterly, not annually in a tax return. I have no idea why you think “accommodation” is a legitimate work expense – it’s not. We all have to sleep somewhere, job to go to in the morning or not. That’s why it’s called a living expense.
Don’t get me started on your suggestion that perhaps negative gearing should only be applied to new property. Property investors are clever, but you won’t find many of us out and about on the weekends knocking up our own structures from scratch. Why would we want, as a nation, to hand a bigger break to the multinational building firms, which would no doubt whack a premium on top of their house-and-land or apartment package prices for investors, purely because they’d be the only products able to be negatively geared?
If you think there are any “millionaires” out there receiving low rents as a result of negative gearing, well, you’re wrong there, too. No property investor worth their salt sits down and works out the lowest rent they can charge based on what they’ll get back from negative gearing. It doesn’t work that way. It’s called market forces. I can ask $1,000 per week for a shack, but I won’t get it unless it’s comparable with other shacks on offer at the time. It’s unlikely there are any millionaire or high-income tenants paying less than market rent simply because the landlord is negative gearing.
And finally, a little more sense about the maths, please. Let’s all remember that tax refunds received as a result of negative gearing still represent a portion of the total losses on a property during a financial year. No one is investing in the hope of losing $20,000 per annum on a rental so they can get $10,000 (or less) back. They’re out of pocket by $10,000 on an investment!
Every property investor, big or small, is restricted by income. I can’t speak for the casino-owning Packers of the world, but I can confirm that while many mums and dads would like to own a whole street of rentals, most of us can’t – we couldn’t sustain the out-of-pocket repayments. Making it harder for us to be fairly small fish in the rental sea really doesn’t make sense, or good policy.
The aim of public policy should be to encourage private investment (and wealth creation for all), not whack it mercilessly and stomp on it until it’s shattered, and then wonder why government housing queues are getting longer.
I’m also not sure whether you realise that the perceived health of the property market helps determine that whole Reserve Bank interest rate decision each month? It’s pretty big. Screw with property and watch interest rates move, one way or another. With fairly limited options these days for capital growth, there’s never been a worse time to even think about dropping negative gearing.
Over a million of us would run a mile.
 
Melanie Stott is a freelance journalist and regular contributor to <a href="https://www.hotspotting.com.au" target="_blank">The Ryder Report</a>. She also writes for Michael Matusik and works as a TV News producer in Brisbane. Melanie and her husband Andrew own <a href="https://www.paradiseatthepoint.com.au" target="_blank">Paradise at the Point</a>, the Gold Coast holiday house featured in 2012’s Big Brother series– and it’s positively geared.
</body></html>

Melanie Stott

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Melanie Stott

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News