Originally Posted by
Beagle
I think overseas investors are very wary of this Government and who can blame them. It would seem almost anything is possible if it fits their extremist views of socialist or restorative justice which is why I am so wary of the pending review of this sector. The whole methodology of how the gains on occupation right agreements can be resold tax free comes under the financial arrangements provisions of the Income tax act wherein people lend a company some money interest free in exchange for a license to occupy and companies can resell those licenses to occupy for more money later on and the gains are tax free. One stroke of the pen to amend this "loophole" as Cindy and her mates like to call it and retirement villages will be paying their "fair share" and the vast majority of Labour supporters would be thinking, good job, about time that loophole for greedy capitalists was fixed.
If they can legislate to overturn such a basic principle as interest deductibility and deny people the right to claim mortgage interest on rental properties which has stood the test of time longer than I can remember then fixing this so called "retirement village loophole" is a very real and present danger. This key "socialism" risk and the real estate market falling like a stone together with the egregious deliberate underfunding choking the life out of care services are the three key reasons I am out of this sector completely and I may stay on the sidelines for quite some time. In my experience when the tide goes all boats fall with it and the tide does not change direction quickly. None are paying a yield anywhere near high enough to provide any meaningful counterbalance to the obvious and very serious risks.