Why Super for Housing is a Bad Idea - Purplepingers
NOTE: Video sponsored by the ACTU
Key points
It would make house prices increase by more than the maximum amount people could withdraw
It would cost the government $1 trillion in the long run
It would leave people with $200k less in retirement savings
It would significantly affect the returns on all superannuation as funds would need to keep more cash reserves uninvested so it is available for withdrawal
How about we ban owning multiple properties, remove any incentives for property as an investment, enforce quality building standards, and use government funds to build affordable housing.
People will just go back to what they did before negative gearing: Make businesses and move their properties into that. "Oh, your business made a loss paying more interest than it brought in as rent, I guess you can write that off as a loss and not pay tax on your income".
The result is the same, but it's more work for the ATO.
My old boss still had his holiday home under the business, because it's how he did it before Negative Gearing was a thing.
Make it so that interest on money borrowed against residential real estate can't be declared as a business loss then. That'll also make speculating housing investment funds a bad idea
You can't do that with a business though - and that's why negative gearing on investments is so strange. If you have a day job, and a side business, you can't claim losses in the side business against your main employment income. But if you have a day job and own an investment property then you can claim the "losses" on the property against your income (and then get a 50% tax reduction on the capital gains when you sell it).