Deducting interest cost is not available to the O-O
How to change this assuming giving that advantage would cost too much Government tax revenue.
Well try this:
- Firstly allow the O-O to deduct 10% of their interest bill against tax on other income while at the same time giving the Investor only a deduction up to 80% against rent actually received.
- Change these ratios each tax year ( say to 20%- 60% then 20%- 40% and then reduce each to 20% and finally 0%)
Any Investor who is already debt free will never be affected in any way.
House prices would even out at a lower level over time to more affordable values.
The deductible interest should be limited to a percentage of the actual rent income received.
Empty houses would receive nil tax relief.
Residential land available for subdivision should also be included
NEEDS TO BE TAX NEUTRAL FOR GOVERNMENT!
