GREED Inc: rental income & negative gearing in Australia

The Guardian, 12 April 2017:

The ATO stats also show the number of landlords with an interest in six or more rental properties has grown quickly in the last three years, up 8.6%, from 17,671 to 19,198 individuals.

Landlords with an interest in five rental properties have grown even faster, up 9.8%, from 16,600 to 18,231. Those with an interest in three or four properties have also grown quickly, up 7% each.

By comparison, the largest number of landlords are those with an interest in a single rental property, at 1.5 million. Their number increased by just 2% over the last three years.

The Conversation, 13 April 2017:

The latest data from the ATO is consistent with what we’ve seen in the past. It shows that people with high-income occupations – doctors, lawyers, and others – are more likely to use negative gearing than the nurses and teachers on whom Treasurer Scott Morrison focuses when he tries to justify retaining negative gearing. It also shows that negative gearing is typically worth four to five times more for doctors and lawyers than nurses and teachers.

The Guardian, 13 April 2017:

The release of the taxation statistics for 2014-15 reveals that, while the number of people negative gearing has levelled in the past three years as interest rates have fallen, the greatest share of the benefits of negative gearing goes to above average earners – and the biggest growth is to those owning multiple properties.

With housing affordability and negative gearing the hot topic in the run up to the May budget, the annual release of the taxation statistics by the ATO on Wednesday served to reinforce how greatly negative gearing figures in people’s tax affairs.

In 2014-15, 1.27 million people recorded a rental net loss. This was down slightly from the 1.3 million in the years before and meant that 12.8% of taxpayers were negative gearing.

Again that was down from the previous year and the peak of 2012-13 when 13.4% of taxpayers were recording a rental loss…..

The reason for the drop is mostly because the main way to achieve a loss on your rental investment is through payments on the interest of the mortgage. But, as interest rates fall, that cost also falls, which means it is actually harder to record a loss.

Over the past four years, the number of people claiming a deduction for payments of interest on a rental property have increased but the total amount claimed has fallen…..

The median rent in NSW in the December Quarter of 2014 for housing ranging from 1 bedroom to 4 or more bedrooms was $420-$500 per week. With the median rent being $450-$600 in Greater Sydney, $230-$433 in the Greater Metropolitan Region and $230-$245 in the rest of NSW.

During the same quarter median rents across the NSW Northern Rivers region ranged from $180-$580 per week.

In 2014 the gross rental yield for apartments in Sydney CBD, Paddington, Darling Point, Double Bay, Kirribilli, Rose Bay, Tamarama, Bellevue Hill, Point Piper, Potts Point, and Vaucluse, i.e., the gross return on investment in a apartment if fully rented out, ranged from 2.8 per cent to 5.0 per cent according to Global Property Guide.

Want to know the average rental loss claimed for taxation purposes by landlords in your postcode? Then use this interactive map.