TAX STATS

Apr 27, 2017
Michael Matusik

Yawn.  Yes, reading about tax stuff is, well…like watching paint dry.  No, much worse. So, I will keep this short and sweet.

These stats might surprise you.

If I was to summarise the latest taxation statistics in a simple form – say, as 100 people, then:

  • 16 own an investment property
  • 84 don’t

Of the 16 that own a property investment, again, using the 100 people as the base, then:

  • 76 had a rental loss (they negatively geared)
  • 24 had a net rental profit
  • 71 owned just one investment property
  • 19 owned two properties
  • 6 owned three properties
  • 2 owned four properties
  • 1 owned five properties
  • 1 owned six or more investment digs

If we now looked at changes over time, we find that:

  • Ten years ago,12 out of 100 owned an investment property
  • Three years ago, 14 did
  • Last year, 15 did
  • This year, 16 do

When revisiting the stats from three years ago, the growth in the size of the investment market by properties held has changed like so:

  • One investment property – up 5%
  • Two properties, up 9%
  • Three properties, up 10%
  • Four properties, up 11%
  • Five properties, up 13%
  • Six or more investment property assets, up 12%

And ten years ago, hardly anyone made a rental loss.

Some end notes

Property investment is on the increase.  Those with existing investments are buying more properties.  Most negatively gear.  This trend is increasing.  Most investors are dependent on capital gains to make their efforts worthwhile.  They are proudly on the property ladder.

But given that we appear to be approaching a property snake, now might be the best time to do something about negative gearing.  However – again – negative gearing has been tossed into the too hard basket.

Yet, with low interest rates, the cost to the budget is at a low point – and as interest rates inevitably rise (over the medium to longer term), so, too, will the cost to the budget from revenue lost.

For mine, the time to move is now.  Failure to do so will cost the government much more in the future.  It will also be much harder to move, should the practice of negative gearing become even more entrenched.

Go here for more on negative gearing.

Get all 7 of our 2017 first-release reports and save 67%!  Report #3 on population growth and forecasts is out soon.

Straight talking – no nonsense – keep up the great work!” Peter D.

Keen to hear your thoughts.

Until next time,

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Michael Matusik

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