Negative gearing decline
The Australian Taxation Office (ATO) released its 2016-17 Taxation Statistics today, which showed that there are still fewer negative gearers than there were all the way back in 2011-12, despite a ~3 million population increase in Australia over that time.
Note that these are tax return statistics after accounting for Division 40 and 43 deductions, so some of those claiming net rental losses will, of course, be in a cashflow positive position.
It's not that hard a concept to grasp, though apparently it is for some!
The average net rental loss claimed in dollar terms hasn't really moved a lot since 2013-14, having previously fallen dramatically lower since 2008.
Of course, these figures are always set to be seized upon and tortured relentlessly by politicians of all stripes to prove whatever point they're trying to make on any given day.
See below Exhibit A: this bizarrely cherry-picked interpretation from Shadow Treasurer Bowen:
The share of landlords with an interest in 1 or 2 properties is still the same as it's been for years, at 90 per cent.
And naturally it's very hard for there to be a significant percentage increase in the 1½ million investors plus that had an interest solely one rental.
And naturally it's very hard for there to be a significant percentage increase in the 1½ million investors plus that had an interest solely one rental.
For the record here are the stats charted out by tax year.
The number of investors with half a dozen or more properties - called out as a key target by ALP Leader Shorten - has actually barely changed over the past half decade (up by a couple of thousand) and certainly not as a share of the population.
This is compared to an increase of nearly 150,000 landlords with only 1 or 2 properties over the same time period.
All in the marketing, huh.
The wrap
I'll spare you my posting of the full chart deck as I've done that for the past few years and the results are always similar.
But suffice to say most negatively geared investors earn a pretty decent income, though mostly they are everyday salary-earning individuals rather than rich-listers or oligarchs.
But suffice to say most negatively geared investors earn a pretty decent income, though mostly they are everyday salary-earning individuals rather than rich-listers or oligarchs.
Landlords also hail from right across the age spectrum, arcing smoothly and broadly from around the ages of 30 to 70.
Note that the number of negative gearers will naturally decline further going forward since the Coalition has already made substantial changes to plant and equipment deductions under Division 40, while travel expenses have further been disallowed.
Meanwhile rental yields are now rising, as fixed mortgage rates ease.
Drawing a long Bowen
Late edit: Shadow Treasurer Bowen further noted that investors buying their 7th property get more help than a first-time buyer.
This might have been true once, but certainly it's the case no longer.
In fact, first home owners grants and stamp exemptions actively promote the former, but APG 223 serviceability rules and debt-to-income caps now virtually preclude the latter.
Of course the full impact of recent changes won't be evident in the ATO's 2016/17 taxation statistics, and will only be seen over the fullness of time.
Sorry to butt in with a few facts, but, it's an election year and all that...
Drawing a long Bowen
Late edit: Shadow Treasurer Bowen further noted that investors buying their 7th property get more help than a first-time buyer.
This might have been true once, but certainly it's the case no longer.
In fact, first home owners grants and stamp exemptions actively promote the former, but APG 223 serviceability rules and debt-to-income caps now virtually preclude the latter.
Of course the full impact of recent changes won't be evident in the ATO's 2016/17 taxation statistics, and will only be seen over the fullness of time.
Sorry to butt in with a few facts, but, it's an election year and all that...
