So I will have to pay tax on the deemed income from the whole of my house?

Answer

No, the owner is only up for a deemed minimum income on the equity you own in the asset. So if you own a $1m house, but have a $600k mortgage, you’d be deemed to have a minimum taxable annual income worked out on the $400k equity you have. Some people have responded to that saying they’d increase their debt but that wouldn’t be rational. It’s likely that mortgage rates would be higher than the deemed minimum income rate.

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Marthinus Joubert followed this page 2016-12-10 13:09:28 +1300
Joe Wurts commented 2016-12-07 22:01:32 +1300
If this comes into play, it may make sense to form a mortgage co-op. I’ll give you a zero interest mortgage, as long as you give me a zero interest mortgage… There are plenty of inter-family zero interest loans around, the implementation of TOP1 will strongly escalate these…

If you do implement TOP1, it should be on the total equity of the property, not the net equity. Otherwise it will most reward the most highly leveraged speculator, which is PRECISELY what is wrong with the current process.
Oliver Krollmann followed this page 2016-12-07 10:29:21 +1300

22. So I will have to pay tax on the deemed income from the whole of my house?

22. So I will have to pay tax on the deemed income from the whole of my house?

Showing 3 reactions