What change will we see to property taxation?

[minimoke]

The Budget will be intersting - and so will the consequences. One consequnece is that changes may encourage people who haven't done so already to look at Australia. If you are "forced" to sell your NZ holdings then it might encourage people to move to Australia. They still get the $7,000 cash up front from hte Ozzie taxpayer and for many "first home" buyers there is no stamp duty. And we'll have 15% NZ GST compared with 10% in Oz. It may be that perhasp a more enticing future across the tasman wil be the thing that creates an influx of properties onto the NZ market driving down values. And if people move off shore then there will be less demand for the remining housing. But teh east coast of Oz still has some of the moust expensive3 Housing Affordability globally so that may create the anchor that holds people back in NZ.

[loofa]

The change in rental costs will only be the result of net demand. Every rental sold up will either be occupied by a new renter or by an owner-occupier who may have been a renter.
So no net change there.
Migration will have an effect. More going to Oz (lower unemployment there) will reduce demand.
Lower immigration from UK (the lower pound) or net flow from Asia may have an effect.
The major influence has to come from income changes (wages or welfare).
Low or nil wage rises mean that landlords have to bite the bullet on rents.
Every other reason for change in rents is minor compared to the ability to pay that rent.

[beacon]

landlords have to bite the bullet on rents.

Recent Data on real rents suggests they have already been biting the bullet for the last 3 years. Maybe its time they start biting themselves, as flesh is currently the cheapest commodity around, and I suspect they haven't got the firepower left to buy any more bullets ...

[Billy Boy]

I feel the housing market in general is going to have to do more bullet bitting, including landlords.
It is obvious that NZ'ers love affair with rental housing has got to be reined in. Too much money has/is going
into a non productive inefficent sector. Govt has got to redirect NZ'ers mind sets into "productive, saving
type ventures". There will be a retune in the rentable establishments, away from the single dewlling toward
flatting complexes. Single dwellings are no longer cost effective as there are allready better investments and
Billy Smurf (and others) will keep it like that.
Ring fencing ??? yes
Capitial gains in the future ?... watch this space
Landtax.... yes, most probably aimed more at the residential sector (empty sections)
All too hard to administer ???.... Bullsh*t
It will not all happen o/night, But will be slowley introduced.
Govt spin doctors will slowly ramp up after May.
I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...

BB

[fungus pudding]

I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...

BB

Simply because it's income, and if you exempt one form of income then you've sure opened the floodgates. There's no reason to do that with earnings from interest rates anymore than there is for wages for pouring gas.

[Billy Boy]

Simply because it's income, and if you exempt one form of income then you've sure opened the floodgates. There's no reason to do that with earnings from interest rates anymore than there is for wages for pouring gas.

Yes I see your point
But Govnt's can do what they like, how they like, and if they want people so save (and they do) then give
the plebs a chance to save by making it worth their while. Kiwi saver ??? and the strings attached. .... well ??
BB

[Arbitrage]

Well my index of rental property has hit a low which contradicts all the negativity about property investment. My index is "the number of 2 bedroom apartments available to rent in mt eden as advertised on trademe". Today it is down to three and only two of them are available right now. Of the hundreds of these apartments in the suburb the supply and demand are almost equally matched, the closest I have seen for a long time. This usually means rents will increase....

[loofa]

I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...

BB

That you will not get.
But the new emphasis that the Reserve Bank is forcing on to the lenders will help out.
By increasing the percentage of funds that must be raised in NZ rather than from Japanese housewives pressure is on to raise deposit interest rates.
You may still pay tax but on a larger income.

Further into the future I wonder if Basel III will force the bank lending ratios to move against lending on housing and thus make houses cheaper by reducing speculative investments for capital gain because mortgage money will be restricted.

[Billy Boy]

Further into the future I wonder if Basel III will force the bank lending ratios to move against lending on housing and thus make houses cheaper by reducing speculative investments for capital gain because mortgage money will be restricted.

I have given some thought too this aspect as well.
I think it could come about, but will it come about quick enough coz of the politicial aspect.
It appears to me the our average "Polly of today" is more interested in keeping his/her arse in a behive seat than serving the greater good of NZ. One could blame MMP and argue that FPP should return as it allows for the hard decisions to be made as and when needed.
BB

[CJ]

I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...

PIE's for high income earners are a tax break.

My view: while technically rentals have no tax advantage to other investments, structurally they do due to high debt and deprecation. The real issue is the alternative. People dont understand shares. People thought they understood fixed interest but how much money has been lost there.

I hoe the government doesn't disincentivise the one investment normal people can do well at and push them into investments they will do worse at. peopel will move into managed funds and we all know they are not the best investment