Yahoo Finance 'Unfair' boomer tax: Landlord reveals 'nightmare' that's forcing him to sell four properties
Craig Doyle was hoping his investment property portfolio would support him in retirement, but it's become a hellish burden.
A landlord has revealed the hellish reality of owning multiple properties in Australia during a cost-of-living crisis, as an expert warns many property owners are doing it tougher than you might think.
Craig Doyle has four investment properties with his wife and they were hoping they would cover them in retirement. However, it has become an absolute nightmare for the 61-year-old kitchen-supplies salesman.
Doyle and his wife used their superannuation 10 years ago to purchase the four properties but they’re now having to sell them because they have been a huge drain on their wallets.
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“People say, ‘You own five houses’, but I don’t. I own five debts,” Doyle told The Australian Financial Review. “They are killing me, and they are reversing my ability to retire.
“I’m selling purely to get my money back and put it back in super. It’s too expensive to own investment properties here.”
Doyle has hit back at Aussies who think landlords are just money-hungry Baby Boomers trying to squeeze as much cash as possible out of tenants.
“We’re the ones being demonised. It’s unfair that the government is taxing my generation,” he said.
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Doyle’s property headache has been caused by the Victorian government’s COVID debt-repayment plan, which has seen homeowners hit with an average $1,300 extra in land tax after the tax-free threshold was cut from $300,000 to just $50,000.
Nearly 400,000 property owners have been stung by this new plan, which is estimated to raise around $4.7 billion. Doyle reckons these fees, as well as others associated with owning a home, have cost him upwards of $100,000.
Many landlords are ‘mum and dad’ investors
Landlords and tenants are often pitted against each other, but both face financial impacts from changing economic conditions.
Improving the rights of Australian renters - who make up about a third of the population - has been at the core of the discussion, with many expressing they feel trapped with no power as property prices are pushed out of reach and rents hit record highs, while the number of available homes hit record lows.
But landlords have been battered by the most aggressive interest-rate-hiking cycle in a generation.
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Domain’s chief of research and economics, Dr Nicola Powell, told Yahoo Finance the idea that the majority of landlords were sitting on huge property portfolios and raking in cash wasn’t quite right.
“Australia's rental market is quite unique in the fact that the largest portion of rentals are provided really by mum and dad investors,” she said. “And these aren't mum and dad investors who have a giant portfolio. They may have one or two rental properties and the sensitivities to changes in interest rates are actually quite evident.
“You can understand why we saw that trend of people having to offload an investment property and we know that type of investor is much quicker to offload an investment property than an owner-occupier is because, obviously, it's your primary place of residence.”
The vast majority (71 per cent) of the 2.2 million landlords in the country own just one investment property, according to data from the Australian Tax Office. A further 19 per cent own two properties.
Kochie begs Aussies to ditch the ‘greedy’ landlord image
David Koch believes landlords are being “unfairly targeted as the scapegoat” by angry Australians and has called on the public to put down their pitchforks.
“You probably have one in your family, or among your friends, and I bet they have increased the rent to cover rising loan repayments,” the Compare the Market economic director said in an opinion piece for The Nightly.
“But vilifying property investors is going to make the crisis a whole lot worse. The reality is many of those landlords are now saying it’s simply not worth it and are selling up, which just adds to the problem.”
Kochie said the three levels of government had been “derelict in not foreseeing and planning to avoid this rental crisis” and he said there was “no silver bullet solution” to curtail rising rental payments.
“They aren’t property moguls, they’re ordinary Australians trying to build a nest egg,” Koch said.
Calls for a cap on rental prices
Greens MP Max Chandler-Mather is asking the government to introduce measures to cap rental prices and build more public housing while Aussies battle inflation and other cost-of-living pressures.
During a passionate speech at the National Press Club, he said 30 per cent of the population rented and not enough was being done to make sure they could survive until the next paycheque.
“This is such a serious crisis,” Chandler-Mather said. “And all we're doing is tinkering around the edges. What? More powerful property developers? Keep the tax handouts? Don't cap rents? Don't build any more public housing - or certainly not as much as the Greens are proposing?
“I think, over the next few years, the entire political class is going to find out what happens when you ignore the one-third of this country getting screwed over by a housing system that funnels billions of dollars into the people that don't need it right now … the banks and property investors.”
He accused property investors - who are expected to get “$39 billion in tax handouts this year” - of using “the capital gains tax discount to bid up the price of housing”.
Chandler-Mather also used the address to announce a Greens plan that would see homes built and rented out below market prices to help struggling Aussies.
