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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (30274)	4/28/2005 3:42:23 PM
From: Elroy Jetson	Respond to of 306849

Margin debt, locally known as negative-gearing, is a concern for the Australian Reserve Bank, though not a large one. Their larger concern is negative gearing use in investment real estate. I'm think this reflects a cultural preference for the occasional small punt or bet so characteristic in a nation that invented drinking games like "two-up" and where you can always find a convenient pokie, betting shops where you can find the "Totalisator" which helps fill the local tax coffers. answers.com .. answers.com I'll just present the range of opinions on this hot topic when the Reserve bank suggested the possibility of placing limits on this behaviour. People had their say on the topic in the Sydney Morning Herald in July 2003. smh.com.au .

To: Robohogs who wrote (30274)	4/28/2005 3:57:38 PM
From: Moominoid	Read Replies (1) \| Respond to of 306849

Margin interest or investment mortgage interest is deductible against general income in the Aussie tax system. Whereas in the US it is only deductible against investment income. OTOH in the US $3000 capital losses can be deducted against general income and zero in Aus. The best simple trick in Aus is to use margin up to the point where the interest is equal to the dividend and then you ahve surplus franking credits (tax credits for tax paid by the corporation) which you can then use to offset your tax liability on other income. There is no such thing in the US and even the use of foreign tax credits is overly restricted. In Aus I also invested in a security called IYS, that generated massive interest deductions on interest that I never actually ever paid as cash payments. It was this packaged property investment product from Deutsche Bank traded as a stock on the Aussie exchange. It had other cool features. And there is no AMT in Aus. With a few simple tricks and a little capital (but a good measure of risk) you can pay no tax in Aus. That is why the marginal rates on middle income levels are so high...