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How to Outwit Bracket Creep

Kevin Young Insights 0 Comments

Each year, thousands of Aussie taxpayers are being bitten by that sneaky little tax bug known as “bracket creep”. It sucks out the benefit of pay increases and stings wage earner’s spending power. Couple this with threatened GST hikes and the APRA lending noose constraining building supply, the bug is well and truly going to bite the Government in a soft spot.

What is Bracket Creep and what is the solution?

As wages rise through inflation, taxpayers are unwittingly pushed into a higher tax bracket.  I believe, that if the Government had a conscience, they should raise the tax rate levels each year to compensate.  For the last eight years the Government hasn’t altered the tax rates.  So wage earners are rising into higher and higher tax rates losing more and more of their take home pay.  It’s called “tax by stealth”.

I learnt the secret on how to stop paying income tax in 1971 and as a result, retired in 1974.  Property Club’s Property Mentors know the secret too and are happy to share this with our members. They have the software programs to show our members it’s really a simple solution.

Of course our way is through property.  But which property?  Where? And how do you fund it?

Most uneducated property investors get these important factors horribly wrong! Getting it wrong can lead to financial difficulties.  The sad fact is that 80% of property investors can’t go past one property for this reason.  One property doesn’t give you a comfortable retirement.  It will give you a part pension at best, and an aging property presenting you with surprise maintenance bills.

Warning – beware of the building backlash!

At the moment I am travelling around the states and talking at our Property Club State Conferences and Expos. I explain, in detail the areas and the types of properties to avoid.  I think there is a huge mistake builders are making right now, with a great number of developers building what I think are the wrong types of properties in the wrong locations.

My warning is that a lot of investors are going to get burnt. We will see a lot of mortgagee in possession sales from these types of properties by the start of 2017.

Why should you protect yourself? 

Why shouldn’t you pay more and more tax?

Government greed is expanding into your wallet stopping you from spending.  Lack of spending hurts retail sales – a major cause of our high unemployment.  Now there is a concerted move by all political parties and the media to brainwash you into accepting the need to increase GST.  No!

How can it help the economy by taking money out of your pocket? It’s you spending money that creates real jobs in the community and creates real productive increases in taxation.

The media are doing a beat up on Sydney and Melbourne dwelling prices. Do you know the increase over the last three years in Sydney and Melbourne is less than the increase we had over the three years from 2001 to 2004?

The Chinese were not driving the increases back then – it was simply market forces, as it is now.  Then the market corrected itself with new supply coming through as it is starting to do now.

However, APRA, being ivory tower bureaucrats with no knowledge in real estate, are going to cut off this supply, thus stopping this market correction.  They are preventing investors getting into the market and by virtue of this are stopping new developments that need off plan sales.  These are only made to investors.  So building is grinding to a halt.  When there is a drop of supply of bananas into the store, what happens to the price? This is what’s going to happen to property!

How long is it going to take Treasury to wake up APRA that they are hurting not only dwelling prices but Government taxes?

Do you know that 44.4% of every new dwelling goes in Government greed?  Local, State and Federal Governments take this via the many fees, levies, charges, taxes and GST.  APRA will start hurting these Government coffers.

Dwelling Approvals 

On the chart here you can see where the total units are rising.

national-dwelling-approvals
This is where the call for construction jobs is coming from. But this won’t result in more jobs because of APRA! No pre-sales = no construction jobs!

Regards,

Kevin Young
Club Founder

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