Prasadh

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Prasadh

Prasadh

@amprasadh

I help Australians cut through property industry noise and make decisions they can explain. Buyers agent | Consultant

Free Klarity Property Brief ➡️ Katılım Ekim 2021
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Prasadh
Prasadh@amprasadh·
If you are buying a NEW BUILD investment property after budget primarily for the tax deductions, you aren't buying an asset. You are buying a subsidy. And the market has already priced that subsidy into the upfront cost. Here is how the mechanism actually works against you:
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Adrian Cartland
Adrian Cartland@taxinator·
Discussions in the past week have really ranged. I have discussed NZ, HK, Singapore, Greece, Chile, UAE, Spain, There are a LOT of options out there: many countries want to encourage migration from the right kind of people. A few years of nil or negligible taxation is a pretty good incentive.
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Adrian Cartland
Adrian Cartland@taxinator·
Shocked - but not surprised - at the number of clients who are planning on moving overseas as a consequence of the budget changes to CGT and trust taxation. I am fielding daily calls from HNW clients. And this isn't an emotional outburst: you call your tax lawyer to plan, not to vent. There is going to be a massive capital outflow from Australia.
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Prasadh
Prasadh@amprasadh·
not surprising Adrian but what is surprising is many economists are calling it "it's just a tiny tax change" which i believe is an argument built on a dangerous delusion: the idea that govt can continuously drain the engine of private engines without the whole machine grinding to a halt. People may not leave australia for this - but the point is their capital is mobile. we live in a world where capital can flow freely & it will
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Prasadh
Prasadh@amprasadh·
@MarkoMatvikov you hit the nail on head - a healthy nation is built on a simple promise: if you work hard, take smart risks, and acquire knowledge, add value to community around you, you can change your financial destination & that of the nation. that imho is true equity.
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Marko Matvikov
Marko Matvikov@MarkoMatvikov·
You don’t create a prosperous nation by making everyone that isn’t currently rich equally poor. You do it by giving poor people the same access to knowledge and opportunity that rich people have.
Marko Matvikov@MarkoMatvikov

Labor clearly can’t defend why its CGT changes extend beyond property if the intent is to remove tax incentives for property. But I’m seeing a new wave of defence being that a) they only apply to the ‘wealthy’ and b) ‘small businesses’ are exempt – so let me tell you why these are categorically wrong. • The ‘wealth’ data is fundamentally flawed: It’s based on single year transaction data, rather than lifetime earnings. About 90% of Aussie taxpayers earn under 135k per year, so when an investor sells a long-held asset, that single transaction for a single year pushes them into the ‘top 10%’. This doesn’t mean they’re in the top 10% of wealthiest Aussies – it simply means that for that specific year, they earned over 135k, which could be off the back of decades of earning much less per year. • The small business concessions aren’t indexed: The $2m threshold for annual turnover and $6m threshold for asset value haven’t increased for almost 20 years (a problem that extends to many of our taxes). This means modest family businesses are being dragged into a tax regime originally designed for much larger operations – specifically, where it was designed to exempt 95% of businesses entities in 2007, it now only exempts about 60% in 2026 (and rapidly shrinking). • The path to building wealth is being cut off: Financial independence is rarely achieved by earning a wage and spending it. For people to become comfortable or modestly wealthy, they generally need to save and invest the wages they earn. Enforcing a minimum 30% floor rate on all forms of capital gains, even for people whose income puts them below the 30% marginal tax bracket, makes it harder for wage earners to build wealth. The bottom line is that this budget suppresses aspiration and socio-economic mobility – and I don’t think that’s what Aussies voted for at the last election.

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Prasadh
Prasadh@amprasadh·
true wealth creation, whether you are building a small business or investing in the stock market, requires taking calculated risks. you deploy capital knowing some bets will win and others will lose. the basic principle of structural fairness dictates that the upside and downside must be treated symmetrically. but the budget turns the tax code into a rigged casino by enforcing a 30% minimum floor on real gains while refusing to let you offset losses that fail to beat inflation. correct me if am wrong - is this govt just making sure it wins even when citizens lose or structurally setup to lose ?
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christopher joye
christopher joye@cjoye·
An analysis by former Treasury tax official Geoff Francis shows that under the government’s CGT changes, investors with a typical diversified portfolio where one-third of shares underperform inflation will face real effective capital gains tax rates of between 42 per cent and 65 per cent... In addition to indexing capital gains for inflation, Labor will impose a minimum tax rate of 30 per cent on real gains. However, real profits and losses from shares won’t be treated evenly. Only nominal losses, where the share price declines below the share purchase price, will continue to be permitted to be offset against real gains. Chile, one of the few countries in the world to use an inflation indexation model for capital gains, allows real losses to be offset against real gains. Labor’s model will penalise investors who spread their investments and record large gains on some stocks and big losses on other stocks, such as volatile biotech, technology and mining exploration companies. In the budget papers, Treasury cited e61 Institute senior economist Matt Nolan’s analysis of the existing 50 per cent capital gains discount as evidence for why it was better to move to an indexation model to compensate investors for inflation. Nolan said on Tuesday that although he supported indexing for inflation across the tax system, Labor’s CGT proposal had serious flaws. “If they’re not going to allow the real component of losses, that very much betrays the principle and can lead to strange distortions. It would penalise risk, so it does become quite a problem. You need to treat the upside and downside on gains and losses symmetrically.” afr.com/policy/tax-and…
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Prasadh
Prasadh@amprasadh·
"it's just a tiny tax change" argument is built on a dangerous delusion: the idea that govt can continuously drain the engine of private engines without the whole machine grinding to a halt. People will not leave australia - the point is young australians who bring dreams to life via innovation will lose investors - who will think about exit at some stage and rather fund dreams in foreignlands that are conducive. The fact that govt keep reaching into the private wallet to fund an ever expanding public service before fixing the underlying problems - which requires being honest - factually - about what those problems are.
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Prasadh
Prasadh@amprasadh·
@PeteWargent it appears that govt engineered fundamentally flawed piece of analysis to justify an ideological revenue grab, probably to divert attention onto somewhere away from real issues. matter of time for political noise to be faded away from data across local/state/federal levels
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Pete Wargent
Pete Wargent@PeteWargent·
Tsy analysis of negative gearing & the CGT discount may have overstated benefits for real estate investors because it failed to account for the payment of state property taxes, adding to a growing backlash against Labor’s federal budget afr.com/policy/economy…
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Prasadh
Prasadh@amprasadh·
@rjmontgomery govt officially moved past "fairness" to citizens and entered the territory of wealth expropriation from them.
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Prasadh
Prasadh@amprasadh·
Owen, the govt made a transition from a nation that incentivises aspiration and risk-taking to a nation that treats any/all private wealth as an infinite ATM for the state. That page 158 of Budget admitting that these tax changes will choke out 35,000 homes is the ultimate proof that our policy planners are completely out of ideas.
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Owen Rask
Owen Rask@OwenRask·
I’m not sure exactly what Igor is referring to re @EquityMates. My issue isn’t the budget per se - it’s what the budget has signalled to all Australians. Anyone who has studied Australia’s financial history or *actually looked* at the modelling for more than 5 minutes can see the disastrous trajectory of Australia’s budget, tax funded debts, productivity, cost of living, manufacturing capacity, electricity prices, regulation, and housing supply. For fuck’s sake - let’s all stop and think for ourselves for a moment: we’re being taxed *more* on things that have nothing to do with property - to fix property! And here’s the best bit: on page 158 of the Government’s OWN BUDGET PAPER it says the tax changes will create 35,000 FEWER HOMES! Keep in mind, the Government got Treasury to model the 5% deposit scheme - AFTER the policy was in place and WITHOUT allowing anyone to see their modelling* (still to this day), Treasury said it would impact 0.5% of housing stock - prices went UP 6% in 6 months. The government literally cannot even explain why or how the rules work. It may be because they plan to unwind them (less likely), or because they think we’re all stupid (potentially), or because there’s no large opposition and doing ridiculous things makes us all angry and rush for change (thus sending polls in favour of OneNation). People who are judging this only for the tax benefits have lost sight of what it means to care for our country and our long term prosperity. Who is going to pay for all of this… It’s so sad. P.S. I might be an AFSL licence holder and oversee many of Australia’s biggest “content creators” (in many cases, bigger than entire traditional media organisations) but I don’t consider myself to be a finfluencer 😉
Owen Rask tweet media
Igor@igordownunder

Our #Finfluencers having tough time to digest the budget. @RaskAustralia podcasts claim it's a massive change, once in a lifetime, radical, while @EquityMates basically claim all as is, minor adjustments required only.... So which one is it ? 😂😅😅

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Prasadh
Prasadh@amprasadh·
@LouiChristopher @SQMResearch with 1,360 more auctions dumping into the Sydney market this week, un-passed stock is going to compound rapidly unless vendors pull out . it's a buyers market
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Prasadh retweetledi
Prasadh
Prasadh@amprasadh·
Confusion is expensive in property investments. Not in the way you track expense — in invoices & receipts. In years. In properties not bought. In directions not taken. In the slow cost of never quite deciding or being uncertain at every rate cycle. Clarity is mental real estate.
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Prasadh
Prasadh@amprasadh·
@PeteWargent yeah right, with the banks preemptively adjusting their internal calculators to account for the new realities from this month, shouldn't be far i reckon
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Pete Wargent
Pete Wargent@PeteWargent·
Most capital cities now recording solid m/m declines in asking prices (SQM Research)
Pete Wargent tweet media
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Prasadh
Prasadh@amprasadh·
When someones entire portfolio was built in a negative geared interest, pre-CGT-shakeup era, they probably fundamentally don't understand the friction an aspiring buyer faces today. Policy gets designed for a market that existed twenty years ago, while the current generation of corporate professionals is penalized just for trying to get a foot in the door.
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Prasadh
Prasadh@amprasadh·
Tarric, when a fractional drop in average household size structurally requires tens of thousands of extra dwellings just to house the same number of people, are you saying that the working-age spike per completion means the industry is essentially running backward up a down-escalator ?
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Tarric Brooker aka Avid Commentator 🇦🇺
Tarric Brooker aka Avid Commentator 🇦🇺@AvidCommentator·
Chart that sums this up in a nutshell. Additional working age persons per dwelling completion. Things are also worse than this because it doesnt factor in the rise of single person households, which is heavily driven by an aging population.
Tarric Brooker aka Avid Commentator 🇦🇺 tweet media
Tarric Brooker aka Avid Commentator 🇦🇺@AvidCommentator

I know people may not want to hear it, but the issue of migration levels and housing boils down to something extremely simple. You can either choose to have enough homes for people to live in, affordably and safely, or you don't.

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Prasadh
Prasadh@amprasadh·
That "perfect property vision" which ticks all the boxes is often your greatest liability. Why the best property investments are usually the ones you find boring.
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Louis Christopher
Louis Christopher@LouiChristopher·
@amprasadh Good vid. Yes the preliminary numbers released on Saturday are crap. No matter the strength of the market, preliminaries always get revised down by a significant margin days later. On that day, sold to listed ratios give the best indicators as per published by @AvidCommentator
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Louis Christopher
Louis Christopher@LouiChristopher·
You know, you will never see my competitors (Domain, Cotality, Proptrack) dispute our auction clearance rates. They never dispute them. Because they know they would lose such an argument on methodology. Easily lose.
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Louis Christopher
Louis Christopher@LouiChristopher·
SQM Research monitors online listings from the major listing providers and agent websites on a weekly basis. We are able to monitor and collect all fields including the address, property types, selling agent. And importantly for auctions, the date and time of auction. For a property to be included, it must have at least an address and a date of auction. See our online methodology document here: sqmresearch.com.au/property/aucti…
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Prasadh
Prasadh@amprasadh·
The banks aren't waiting "several months"-CBA already shaved $30 billion in market value right after the budget and slashed its growth forecast down to 3%. But the real valuation squeeze won't be a uniform drop across the board. It’s going to hit investor-heavy apartment blocks and townhouses where the loss of negative gearing immediately destroys the cash-flow math
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Radio Australis
Radio Australis@freedom4UU·
Well, I just found this guy on YouTube and I strongly suspect he is right. The Albanese government hasn't taken into account the banks reaction. In several months there may well be a property valuation reduction across Australia. Then what will follow would be a hard hitting recession. Technically Australia is in a recession now but mass immigration is propping things up. Wobbly times ahead.
TOM PANOS@tompanos

Banks are already reacting to proposed negative gearing changes. Borrowing power could drop 20% & pre-approvals are being reassessed. Don’t sign without unconditional approval. #Mortgage #HomeLoans #PropertyMarket

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Prasadh
Prasadh@amprasadh·
@MarkoMatvikov @PeteZogoulas @DrewPavlou The real tragedy of the declining living standard is multiple and series of policy cum execution issues that has effectively penalised the hard working people.
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Marko Matvikov
Marko Matvikov@MarkoMatvikov·
As Aussies continue to see their tax dollars wasted, welfare programs that don’t deliver intended outcomes, criminals living large and hardworking peoples’ living standards decline, we appreciate the work you do 🙏 @PeteZogoulas @DrewPavlou
Drew Pavlou 🇦🇺🇺🇸🇺🇦🇹🇼@DrewPavlou

Our new NDIS video investigation cost almost $50,000 and probably more than 1000 combined hours of work across our full team. I know Pete would have spent more than 100 hours just editing the dozens of hours of footage we compiled. He worked so hard on this that he was even coughing up blood at one stage after 10 days of straight filming on the road. We spent tens of thousands of dollars on security, legals, film production costs and professional investigators. I personally believe this new video is ten times better than the first one because we were able to go so much deeper with world class professional investigators thanks to crowd funding support. I believe we compiled enough evidence to potentially jail at least two NDIS fraudsters, should the government decide to do their job and prosecute them. Please watch and share it now: youtube.com/watch?v=WoTHan…

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Keşfet

@taxinator @oceanblue76547 @MarkoMatvikov @PeteWargent @rjmontgomery @EquityMates @LouiChristopher @SQMResearch