INSERT FUNNY DOMAIN NAME HERE!!

Ignorance at its best.

A real shame. The Australian Political Party, “Family First” is calling for special tax breaks for first home buyers.

Basically it is trying to convince the government that we should allow first home buyers to make the interest on their first home tax deductable.

First. I am the biggest PROponent of cutting tax, on anything. I believe the government, state and federal, could trim huge amounts of fat from their coffers and afford the public huge tax cuts.

I am however very much against giving some persons definition of a battler tax breaks that not everyone is entitled to.

I live with my partner of 9 years, we are not yet married (I said “YET” M). We have no children. We have our “first home”. We also have an investment property. We both work our butts of. I manage several ecommerce businesses, my partner works in Microbiology. We go without plenty, we know we cant afford to have children and a quality of life we want now, so we wait, save our money, invest wisely and a little hoping for the best.

So, we were smart, didnt get married and pregnant young, worked hard, studied, didnt travel, go out every weekend, squander our money. Are we not entitled to the same tax deductions? Why not? What makes someone else more deserved than us?

See where I am going with this? Its wrong to give handouts, unfair advantages to the so called disadvantaged. What rubbish. I work and suffer and do the hard yards, only to fund someone who didnt have the discipline to do it themselves?

Tell me how that is fair.

According to this article we are perhaps in the midst of a housing market recovery in the big 3 cities of Australia at least.

I have been telling people for quite some time now that it is a buyers market and one can really shop around for a bargain. If the article is to be believed, there is a serious housing shortfall occuring at the moment. This is not surprising if it is in fact the case. Rent prices have not increased for quite some time in Sydney at least, while the house prices were soaring. We are long overdue for a rental increase, unfortunately it has happened quite suddenly, meaning that many increases have been quite high with no warning.

This perhaps will hurt those trying to get into property, however the investment buyers will love it, making housing a desirable investment vehicle.

As I have said in another post, those trying to get into the property market should look at investing first instead of buying their own home. House prices will not get cheaper!

Your average John and Jane Doe saving for a deposit for their own home wouldnt even consider an investment property.

Why not?

Its easier.

Think about it.

Payments on your own home are not tax deductable. Payments on your investment property are.

You earn no rent from your own home. You earn rent from your investment property.

So take the same 2, 500k mortgages.

The interest is about $3500 a month on both.

Your getting, should get, about $500 per week rent.

Call it $2000 a month.

Leaves you having to come up with $1500 a month of PRE TAX dollars, not take home pay, money that you earn before the tax man gets his cut. Thats less than $400 a week pretax to have an investment property (about $300 take home dollars).

Now go to your own home.

$3500 a month mortgage payment.

$850 a week roughly of  after tax money to pay for it. So you go to work, pay tax, take home your pay and then $850 goes to your mortgage interest bill.

$400 pretax is about $900 real dollars better than $850 after tax.

So why not? You enter the property market. In fact you can pay for 2 investment properties at the price of paying one property the same value that is your own home.

So your in the market, moving with it, the market moves faster than you can save for a deposit anyway.

Go for it. Learn to be an investor before a home owner.