The Impact Of Capital Gains Tax On Residential Property Investment Essay

The Impact Of Capital Gains Tax On Residential Property Investment Performance And Viability In Australia - Essay Example Net losses in a tax year may be carried forward, but not offset against income. Personal use assets and collectables are treated as separate categories and losses on those are quarantined so they can only be applied against gains in the same category, not other gains. This works to stop taxpayers subsidizing hobbies from their investment earnings. (Wikipedia). This study will include the impact of CGT on Residencial Property Investment Performance and viability in Australia. Some organizations believe that because of this capital gains tax the increasing number of house affordability is alarming. Only a small percentage of family can now be able to afford houses. Instead they resort on renting it, still it is not that affordable to rent one. This high cost of housing is because of the capital gains tax in Australian. However to some investors it has a positive effect on their business. Capital Gain Tax as defined by Australian Taxation Office as the tax that you pay on any capital gain you include on your annual income tax return. It is not a separate tax, merely a component of your income tax. Your are taxed on your net capital gain at your marginal tax rate. All residential properties are subjected to capital gains tax. To those family that owns one or more properties the capital gain tax is complicated for them. Even if they uses the name of their spouse the said property is still subjected to capital gain tax. The Construction, Forestry, Mining and Energy Union - Construction and General Division, the CFMEU believes that Australia is in the grip of a housing crisis. This crisis is not only characterized by declining affordability in first home ownership, but by increasing levels of housing stress among low to middle income participants in the private rental market, the degradation and running down of public housing stock across Australia, and finally, by growi ng levels of homelessness in the community. The Union believes that this trend comes at a time when a select few have grown more and more wealthy off the back of a speculative boom in house and land prices, that serves to make the already well off even more affluent, while locking many ordinary Australians out of home ownership, and affordable rental housing. The Union bases its view on several important studies over the recent period, including work done by the Affordable Housing National Research Consortium, of which the Union was a part. However there are still residential properties which are exempted in the tax. This may have a positive effect to those who owns only one property but to some who has 2 or more property the capital gains tax is a burden for them. Impact of Capital Gains Tax to Residential Property in Australia As per described above one main impact of capital gain tax is the increasing number of non-affordability of renting and owning a house. Confusion on the application of the capital gain tax is also another reason of this. There are cases where in the property is not subjected to capital gain tax because of some exemptions which are further discuss in this paper. Factors Determining Application of

Outsorcing and Exchange Traded Funds Essay Example | Topics and Well Written Essays - 1250 words

Outsorcing and Exchange Traded Funds - Essay Example These reasons have been adduced as the causes of outsourcing by United States. It has therefore become a trend for developed economies to outsource their processes to emerging markets. Emerging economies are those economies with relatively cheap cost of labor. As a result of outsourcing their processes, multinational companies have to exchange their home currencies in the foreign exchange market in order to acquire the currencies in the countries of operations. Exchange rate is the price of one currency in terms of problems. In this paper, the US dollar has been compared with Brazilian currency, the realm, over the last five years (Lydon, 2005). Business process outsourcing has been made in the information technology sector, financial sector, telecommunication sector and other after sales services. Brazil has become a preferred country for outsourcing since this has become one of the government strategies to create more employment opportunities and increase the gross domestic product . As a matter of fact, Brazil has become a preferred calling center. The rate of exchange in the years has kept on varying depending on the forces of demand and supply in the various countries. The country is rated next to Mexico and Europe irrespective of the proximity of these states. The preference of Brazil has been favored by the time zone, strong government support, conformity of culture high rates of fluency and growing technology (Stouffer, 2011). With the increasing outsourcing in Brazil, 25000 direct jobs and 75000 indirect jobs have been created. One of the major sectors that have actually grown is the IT section where the country’s size is the 8th in the world. The pooled skilled labor has enabled outsourcing in this country a preference. Outsourcing in the banking industry and the information providing areas has made Brazil increase it’s outsource capacity. The question that many ask is whether the fluctuating Brazil currency could be a hindrance to outsou rcing in Brazil. When companies establish their operations in a foreign country, the challenge that must be met is the competition with the home companies (Casale, 2008). The history of the US dollar against the realm from 2006 is as follows. In 2006 the realm per US dollar was 2.27 and 1.9 in the year 2007. As from the information, the realm gained against the US dollar and therefore any US firm that outsourced in Brazil had to incur additional cost for labor purposes (Lydon, 2005). In the year 2008 the exchange rate per US dollar was 1.63 and 1.95 kin the year 2009. The steadiness of the realm against the dollar therefore reduces the risk that is associated with operations in foreign countries. In the year 2010, the dollar was traded at 1.82. In as much as the rate has varied in the 5 years, it is worth realizing that the variation in the cost of the dollar has promoted the outsourcing to Brazil. Indeed, Brazil may be ranked the second after the giant outsourcer which is India. Th e decreasing value of the realm compared to the dollar could be a reason as to why Brazil could be the second option for countries to outsource. A stable currency is necessary in instances that outsourcing decisions are to be determined. The real against the dollar has remained stable between 1.7 and 1.9 to the dollar and this has made the United States be a desired place to outsource. There are several strategies that any firm with off shore outsourcing must do to ensure that