Quote Originally Posted by Snoopy View Post
SBQ, I am not a property investor, unless you count owning your own house as an investment (I see it as somewhere to live). So if any property investor is reading this and I have got what I am about to say wrong please feel free to correct me. But I think that the tax treatment of NZ property investment verses NZ based managed funds has been largely evened out.

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SNOOPY
Far from being an even playing field between share investment vs owning houses. I did not mention depreciation either so that should not be part of the mix. You didn't have to and the NZ gov't should of stopped this practice long long time ago. Just look at the 2 asset classes alone

a) Share investment ie Kiwi Saver / PIE funds you name it. Paying 28% in tax vs

b) A house in Auckland, which pays a very small portion of taxation of maybe 5%? [Rates + Insurance and any miscellaneous outgoings].

You don't even have to work out the difference, just open your eyes and see why so many people in NZ have invested in real estate hand over fist than plunking down a million dollars in some Kiwi Saver fund. No one is going to put in $1M into a managed fund that is stung 28% tax on the gain every year. You know why? Because the banks themselves don't do it, but they would gladly lend on the real estate asset.

Let's recap. Since when houses in NZ have lost value over a multi-decade time frame? After all when you choose a retirement strategy, it happens on a "long term" approach. So we're talking 20 or 30 years. The banks know better that houses don't lose value over a 20 or 30 year time frame.

Not trying to say share investments is a bad thing. If I was living in the US or in Canada, then the table would be flipped around as they have extensive capital gains tax laws that makes real estate less attractive than owning equities.

Don't take my word for it. I've spoken to many financial advisers in NZ. Years ago I asked about a managed fund in NZ that invested with the same view of Warren Buffet's Berkshire Hathaway. They thought hard and told me there was none, even in Australia that they knew off the top of their head. They went on to explain that it's not the focus of what NZ investors seeks ; again going back to, the preference is they seek dividend payment as the measure of the company's performance. FYI, BRKA share price in 1964 was $19 - go look at it what it's worth today.