@JordanEliseo Depends on what the debt is used for but yes they should still get the preferential borrowing capacity v non grandfathered
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Lindsay David
28 posts
@linzcom How good is it
Could presumably just borrow against the thing indefinitely - trip to Europe, renovation on the (CGT and Pension free) PPOR
And they say innovation is dead in Australia
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This is big. As far as I understand, those who own a property grandfathered under the changed to Negative Gearing will continue to be able to re-leverage against that grandfathered property to buy more assets and write off interest costs against income well into the future
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@BasilSixte And you can draw equity on the grandfathered property to rebuild or renovate it.
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@linzcom Correct. But that’s the case regardless of existing investment or security.
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@AvidCommentator And grandfathered owners can still borrow against the property to completely renovate the dwelling and benefit from NG.
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@AvidCommentator The problem is everyone thinking you use the funds to buy another existing dwelling. But if you borrow against a grandfathered dwelling and buy shares with it, the interest is deducted if the interest is more than the divvy. That’s how I read it the new rules.
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Deleted my previous tweet with a question on the implications of negative gearing grandfathering until I can get more info on some of the claims being made.
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@ultimatealloy @AvidCommentator It applies only to the purchase of existing dwellings. Everything else is fair game
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@AvidCommentator @linzcom You can't do this. Those extra loans will be for the purposes of a different investment and won't be able to be negatively geared.
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@23fm6 For existing dwellings that looks to be the case. But not for other asset classes
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@BasilSixte And you can invest in any asset class that still allows NG post changes.
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@linzcom Incorrect. Purpose of borrowed funds is the determinant of deductibility. Not underlying security of loan. Any redraw or equity release is new borrowed funds under tax law.
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@DomokunNakamoto Only the purchase of existing dwellings. But you can pivot into every other asset class and keep NG
Lindsay David@linzcom
That’s how it works where you can leverage the existing grandfathered investment property and expand an investment portfolio post changes
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@Potstirrer111 @AvidCommentator Indeed. Personally there are too many elements working against the chances of prices going up and more elements that align with a big crash
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@AvidCommentator @linzcom Won’t help them if the properties value fall though
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@BK18699178 @AvidCommentator Unsure of the benefit to buy another investment property (not a new build). But everything else is fair game
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@AvidCommentator @linzcom If true, investor interest may resurface. Borrow against the grandfathered investment property and use funds as deposit to buy a new investment property at an LVR such that rents = holding costs
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That’s how it works where you can leverage the existing grandfathered investment property and expand an investment portfolio post changes
Lindsay David@linzcom
This is big. As far as I understand, those who own a property grandfathered under the changed to Negative Gearing will continue to be able to re-leverage against that grandfathered property to buy more assets and write off interest costs against income well into the future
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@JustinBerger15 @The_scanner_man Definitely doable buying assets that won’t be subject to NG changes
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@The_scanner_man @linzcom You could before all this rubbish from labor started.
It's the purpose of the funds that matters.
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@jason_king72 @AvidCommentator The new property acquired won’t be able to NG but if you keep borrowing against grandfathered asset, that interest loss can be deducted against the income
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@linzcom @AvidCommentator No. If you draw down against the equity to buy a new property then that deduction is in relation to the new property.
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They might keep negative gearing but now that people are sifting through the fine print CGT changes that make it possible to pay in excess of 100% tax on net gains, the government might have to axe it.
Lindsay David@linzcom
Changes to Negative Gearing and CGT will be axed by end of the year.
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@jeremy1174 Judging by how they spend I’d say they don’t really care.
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@linzcom They still have a hole in the deficit to fix.
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Changes to Negative Gearing and CGT will be axed by end of the year.
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@AvidCommentator Labor were just plain stupid not to flank investment flow into productivity as a relief source instead of applying the same tax as for property investors.
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@linzcom That's true, but it also means they can blame Trump, the war and the RBA from a perspective that is arguably credible from a purely narrative perspective in the eyes of the punters.
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Do you folks reckon so?
There has never been a better time to put the blame on someone else, except maybe Covid.
Lindsay David@linzcom
Changes to Negative Gearing and CGT will be axed by end of the year.
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