@bowtiedstocks It is highly leveraged (70 -80%) with thin Interest cover ratio covenants (1.5x). Yield shift, higher interest rates and the resulting default cycle will make the adjustments needed over time
@SimonCotter62 Who claims taxing shares directly makes houses cheaper? The argument is that tax concessions distort investment decisions and cost the budget billions that could be used elsewhere.
@Crashman_X The property they bought was overpriced and that should have been obvious to anyone with their eyes open. This is the most conspicuous bubble.
@OMGTheMess A highly leveraged property marketing business collapsing after investor sentiment weakens isnโt proof the reforms failed. Itโs proof how dependent parts of the industry became on tax concessions. If the business model was that fragile demise probably started before the Budget
@MadsMelbourne Owning a business never meant owning a permanent taxpayer funded concession. The government isnโt claiming โ47% of their businessโ itโs reducing preferential tax treatment on gains, something every investor and business owner always knew could change
@PeterOfPerth@GeoffWilsonWAM Australia built mining, biotech and tech sectors long before ultra-generous CGT discounts. Capital still flows to good opportunities with real returns.
@GeoffWilsonWAM Funny how โtaxes change behaviourโ suddenly becomes a revelation only when high earners lose a concession they benefited from for years. If after-tax returns matter so much, then the old concessions were obviously distorting investment decisions in the first place
@daryljwilson@NoelWhittaker I did say if they can't service the debt they will walk away (negative equity an added incentive to do so). Lenders won't identify negative equity until there is a reason to update the valuation e.g. loan arrears > 90 days, borrower seeks hardship terms.
@deepfriedWA@daryljwilson@NoelWhittaker Yes bankrupted too but that's academic. You can't get blood from a stone. Being prevented from borrowing again for at least 7 years will serve them well.
@taxinator If a system is seen as unfair, the issue isnโt โwho loses in this Budget,โ but whether the concessions were ever appropriately targeted in the first place.