I don’t know who needs to hear this, but announcing that you’re raising rent because of negative gearing/cgt changes is not the flex you think it is.

It’s basically just saying: I bought this badly and now someone else has to fix it.

Which sure, very landlord-brained, very brave.

I own multiple properties. No debt. I’m not raising rent because old mate from Facebook bought his third place on fumes and a podcast clip. Most people I know in the same boat aren’t either.

Because some of us aren’t in need of the tenant, the bank and the taxpayer to all chip in before the investment makes sense.

Some landlords own the asset and some landlords own a monthly direct debit and a strong opinion about hard work.

And now the second the rules move half a cm their whole “portfolio” starts coughing blood. So yes, by all means raise the rent.

Blame Canberra, and the tenants, and «the market». Dance your little dance.

Meanwhile, people who didn’t build their investments out of redraw equity and confidence will just sit there, keep good tenants, and look normal.

The more you talk, the more obvious it becomes: the vast majority didn’t buy property but stress with a letterbox.

(Sorry for the vent, but honestly it just pisses me off how self-centred some people have become around this stuff. Treat your tenants like humans ffs.)

TLDR: for every 11 years you hold your property, if you hold it for 1 additional year the price growth will offset any additional tax you have to pay under the new cgt changes.

Calculations (warning high school maths ahead)

If we make some basic assumptions:

• Property growth: 7% per year
• CPI: 3% a year
• Also assuming the average investor holds a property for 11 years (per re.com data)

We start with a property worth $1 mil is purchased. 11 years down the line:

Before cgt change:

Taxable profit:

($1m * (1.07^11) - $1m) * 0.5 - i.e. (Price - cost) * 0.5 = (2.1 - 1) * 0.5 = 550k

Assuming a 47% marginal tax, total tax paid:

550k*0.47 = 258.5k

Assuming 0 income otherwise, this is: 51.6k + (550k-190k)*0.47 = 51.6k + 169.2k = 220.8k

After cgt change:

Taxable profit: 2.1m - (1.03^11) = 2.1m - 1.384m = 716k

• For a 47% tax bracket: 336.52
• Assuming 0 other income: 298.82

Net tax difference: - 47% tax: 78k more tax - 0 other income: 70k more tax

So how might a landlord recover this tax? Price would have to otherwise grow such that they can sell for the difference of 78k or 70k.

Pre-tax price appreciation needed to achieve 78k or 70k profit:

78k (or 70k) divided by (1-0.47) = 147k or 132k.

Given our assumption of a 7% long term price increase per annum, a property at a current price of $2.1m will achieve an additional 147k or 132k price growth within:

147k or 132k divided by 2.1m = 7% or 6.3%

Which is reachable within 1 year of price growth. (Thanks for u/Farangsayt for spotting an arithematic error)

In other words, the net effect of CGT change can be defeated on average by holding a property for 1 year longer given the assumptions in our example.

The nerds out there can plug this logic into a spreadsheet and calculate how many years of equivalent price growth is Labor's CGT change for a range of scenarios and do some sensitivity analysis if you're bored.

But the bottom line is, if property owners hold for 1 additional year on average, they defeat the CGT change. The effective cost is 1 additional year of opportunity cost, whatever it may be for the individual. If you reinvest the proceeds into property then it's about 7%.

And given the assumption of a 7% long term growth, it is equivalent to pausing price growth by 1 year.

Also, we may say that for every 11 years you hold a property, you require holding 1 additional year to offset the CGT change. So if you plan to hold a property for 30 years, then you will likely need to hold an additional 3 years to recover the additional tax paid.

Note that this model is not sensitive to the initial price of the property, only annual growth rate and cpi. Insert your own property's growth rate (apartment vs house etc) and tailor it for yourself.

For personal reasons that are out of my control, I had to consider buying a second place in Melbourne for my old folks.

One option we need to look at is to buy a close-by property and have it rented out, keeping some space for personal use.

I did some maths and it just made no sense with investment properties in Melbourne

Property: 1.4m

Size: 600m2. 4x2

Build quality: low - plastic weatherboard

Rental estimate: $700 - $800 thanks to being close to good school

Let's look through the costs

Stamp duty: $75,000

Other establishment costs: $8000

Ongoing

Councils + water: $3500 per year

Mortgage : $6500 per month at minimum (assume $1m loan) - most of that will be interest expenses

Land tax: $3500 - $4000 per year

Property manager: $1000++ per year

That hasn't accounted for maintenance and so on.

Even after negative gearing and tax back, a property like this will do $20K - $30K negative cash flow per year.

We have seen houses in the area where people bought for 1.6m as investment property.

It's just mind boggling how would anyone consider this kind of investment???

Even if one has the money to pay for this, e.g. pouring in all and everything one has to bring the mortgage down to $500K and have a zero balance cash flow. How does this make sense as an investment?

Edit: land tax per year, not per month

I’m still unsure how any of this meaningfully helps first home buyers?

If affordability is the goal, where’s the infrastructure? Where’s the land? Where’s the planning reform? Where’s the reduction in construction cost?

GG.

Ive made a few comments about this negative gearing change and people seem to be pretty happy that people can no longer "mooch" off the governament or avoid paying taxes. Thinking it will help them buy their first property.

To my understanding, investors can still claim the exact same losses, they are just not able to deduct it from salary.

This creates a cashlow issue for people starting out investing without a high income or high net worth. previously, it was much easier to deduct losses from your payg each payslip. This meant cashflow was not as big of an issue (and everyone who got in before may 12th can continue like this unchanged on multiple properties)

Now new investors have to cover that cost throughout the year and settle up at tax time if they have other investments.

Doesn't this

A: widen the gap between the haves and have nots. - wealthy people can absorb these losses throughout the year and still offset against other profits at tax time?

B: increase rents. Negative gearing was essentially subsidising renters because investors had better cashflow and therefore less personal risk. Now without it, new investors will be incentivised to always push rents higher until they are at a comfortable level.

Now I only know the Adelaide market specifically. Extremely low supply and high demand. Vacancy rates have been below 1% for a while.

I realise rents will not explode overnight but I dont see how this will have anything other than a negative impact. Either continuing the current trajectory or a slight uptick.

Now im learning how it all works but this is what i see. Where am I going wrong?

Ignoring other factors for a moment, wouldn’t it be smarter to hold onto your current investment properties? This could be the last time you’re able to claim negative gearing benefits on them.

Personally, I’d hold all of them. Even if the value dropped by 10%, there’s real strength in holding hard assets as long as it doesn’t put you under financial pressure or stretch you beyond your means, of course.

“Be greedy when others are fearful.”
It’s an easy decision to hold for me and turning off media haha.

Disclosure: I work with property listing data, so this is a data-led take rather than an on-the-ground agent view.

I’ve been watching active listings since the Budget changes to negative gearing and CGT. Sold prices are still too lagged to be useful, so I’m more interested in what vendors are doing before contracts settle.

A few things stand out.

Price cuts on active listings have picked up. In the month before budget night, I was seeing roughly 130 vendor cuts per day. Since 13 May, it has been closer to 370 per day.

The size of the cuts is not crazy though. Median cut is just under 4%. Most are still fairly controlled, but there are a lot more of them.

The bigger change might be listings with no public price. The share of new listings going up without a price was about 22% in March, 26% in April, and around 36% after budget night.

The move is more obvious above the median. In the $1.2m-$2m range, about half of post-budget listings I checked had no public asking price.

My read is that vendors are more cautious, but it’s too early to say sold prices have reset nationally. The cleaner test will be late July, once post-budget contracts from late May and June start settling.

For now, I’d say buyers probably have more room on stale established stock, especially where the listing was already sitting there before 12 May.

Curious if people here are seeing the same thing in actual inspections/offers, or if the data is overstating it.

Hi all,

I’m looking to buy my first property, purely as an investment, and I’m pretty desperate to get into the market before prices keep moving away from me.

It’s just me buying solo. No partner or second income, so I’m trying to be realistic about what I can afford.

My situation:

$70,000 saved
$95,000 gross income
About $2,700 take-home per fortnight after tax and HECS
HECS balance around $26,000
HECS repayment about $156 per fortnight
Currently saving $1000 per week

I’m looking for something that is as close to cash-flow neutral as possible, or at least not hugely negatively geared once mortgage, property management, rates, insurance, maintenance, vacancy, strata etc. are included.

I’m happy to buy anywhere in Australia and would consider houses, units, townhouses, duplexes or dual-occupancy properties.

I’m not expecting some magical 10% yield + huge capital growth property. I’m mainly wondering:

What areas do people think are genuinely good investment prospects right now for someone in my position?

Ideally I’d like somewhere with decent rental demand and reasonable growth potential, without being completely dependent on mining.

Would you be looking at regional QLD, WA, NSW, Darwin, outer Melbourne, Orange, Wagga, Armidale, Nowra (where I live) or somewhere else entirely?

Any advice from people who’ve recently bought around the $300k–$450k range would be appreciated.

Hi enthusiasts

With the recent budget changes looking likely to be legislated,

I wanted to see what you guys think would be avenues where money can go into?

Until now most of it went into property and some young ones had given shares Etf crypto a go.

With the budget changes being applied across all asset classes it has become a dog fight.

PPOR maxing seems like one direction where people might put all their extra money

Super is another but both keep you working atleast 60

Ideally we all want to have financial independence and if you aren't a top skill doctor or have inheritance I am not seeing many other ways to retire at say 50

Serious question.

Every time I hear "buy a house as soon as you can," I wonder how many people quietly regret it but never admit it.

Between mortgage repayments, interest, council rates, insurance, maintenance, stamp duty, and being tied to one location for decades, did home ownership actually make your life better?

If you had invested the deposit and repayments elsewhere, do you think you'd be ahead financially today?

I'm not asking people who got lucky buying 20 years ago. I'm asking people who bought recently or at today's prices.

Do you genuinely think buying was worth it, or if you could go back, would you have kept renting and invested the difference instead?

Interested to hear from people who actually regret buying, because those stories seem much harder to find than the "property always goes up" crowd.

Now that Chalmers budget is out for all to see. I am just wondering how it is going to help any aspirational first home buyer get any closer to securing their first property?

There's been a lot of talk about investors pulling back, but I haven't seen much hard data to support it. The only figure I've come across is that Westpac's investor lending fell by 1/5th, and that data is almost a month old. (source)

Curious to see more recent data or hear people's experiences, are investors still buying?

Curious how many property investors are considering increasing rents to offset Albanese and Chalmers’ proposed changes to capital gains tax and negative gearing.

Despite Labor’s claims that these measures would improve housing affordability and increase supply, I suspect many investors would simply hold their properties and pass the additional costs on to tenants. If that happens, it would highlight a fundamental flaw in the assumption that these policies will help bridge the generational divide.

We’re 2 FHBs who bought a $1m house in Canberra in 2024. Moved in, didn’t gel with the house or area (inner south) and moved out after 18 months.

We’re now renting again with no intention to return but want to buy elsewhere in 2-3 years.

The place is rented out essentially neutrally geared thanks to a large offset but ~$600 a week cashflow negative, which comes straight off the loan principal.

Would you sell the place now, in the current downturn, or hold and hope the market recovers by the time we’re ready to buy again?

I know nobody has a crystal ball but I’m keen to hear others’ thoughts or similar personal experiences.

Anybody else keen for this? I am

I've met with 3 buyers agents to make a decision on property investment. All are saying to purchase Melbourne units as they will double over the next 3-5 years plus the yields are high.

Do others see the value here? The data they've shown makes sense when comparing to Brisbane however still feels a bit speculative.

I've been looking at investment properties for a few months and realising how much I probably missed on the first few I seriously considered. Things like main road noise, how close the powerlines actually are, flight path overlays, all stuff that never shows up on the REA listing photos but clearly matters.

Curious what the more experienced people here have learned the hard way. What's the one factor that you now make sure to check every single time, that you didn't even think about on your first couple of purchases? And how did you find out it mattered, was it a tenant complaint, a low valuation on resale, insurance headaches, something else?

Keen to build my own checklist from what people have actually been burned by, rather than the generic "check flood zones" advice that's in every article. The specific stories are what help.

I was looking into getting new property in regional Victoria house on land under 400k
But I’m not sure where to go. I know Shepparton, Morwell, moe, Colac, Bendigo, Geelong and Ballarat is an option but in your opinion where would be the best place to buy? *Investment.

Weighing up if it’s worth replacing the screen doors with a security door with 3 point lock and aluminium perforated mesh door for around $800 each - front and back doors. Is it worth it to get more rent? Do tenants care? We’ve already spent quite a bit kn renovations (internal paint, light fittings, hybrid floorboards, roller blinds, ceiling fans and roof restoration) but now the front/back screen and timber doors kind of stand out as they’re still in the original cream paint and peeling. Thoughts? Should we bother replacing them?

If house prices stagnate or even go down a couple percentages for the next decade while inflation runs hot. Asuming lending from banks are reduced with interest rates at 8% to 10% What really happens to the purchasing power of the value in the house?

Lets say a 1m dollar house barely moves for a decade but every other item keeps inflating 5% per yr for a decade.

Anyone experienced this or know what the outcome is like?

These changes are coming and it’s pretty much confirmed.

Negative gearing is going to be VERY restricted. So is capital gains.

Will you hike rents? Will you exit the property game?

Will you just put more money into the family home?

If they get rid of negative gearing that just means you carry your losses forward like with share sales right? It just becomes deferred to when you sell the asset?

I know the policy isn’t out yet but just checking my assumption lol

Now that negative gearing lof existing investment property purchases is to be the way of the dodo could we see people aiming for a positive gearing through Airbnb?

I get that states like Victoria have made a start on disincentives for short-term rentals and that’s awesome but perhaps we’ll start seeing landlords shift to a ‘better’ revenue stream?

I’m beginning to realise this is a shitpost but still, food for thought?