If National wins ...

[fungus pudding]

To be fair and equitable a CGT needs to be inflation adjusted... and if that were the case then there would not be much tax gleaned from a CGT anyway.

Some CGT systems do tax only above inflation rate. It's hard to judge a proposed CGT without knowing the finer details. I certainly think it would be a mistake to introduce a CGT without a repatriation clause.

[Bjauck]

To be fair and equitable a CGT needs to be inflation adjusted... and if that were the case then there would not be much tax gleaned from a CGT anyway.

The tax system's remit is to revenue raise. It is not fair or equitable. Otherwise there would be an inflation adjustment for interest earned, for just one example.

I guess with an inflation indexed CGT, fewer assets when sold be affected. To compensate I guess the CGT rate would be higher than for a CGT with adjustment for inflation. For example you could levy the company tax rate on indexed CG or 10% on non-indexed CG.

[Bjauck]

"I mean one of the reasons why probably haven't had a significant correction is because over the last 45 years there's a general view that housing prices are not over-valued relative to a whole lot of different factors." http://www.radionz.co.nz/news/nation...ver-valued-key

Interesting that JK does not think housing is over-priced. He is right. Within the context of financial and tax system that has a bias towards certain asset classes, he is right.

Within a financial system that favours loans for bricks and mortar over business. Within a low interest environment, people can borrow to the level that their income will allow. Within a country with a high immigration rate and no control on overseas buyers; Within areas where house building is difficult and expensive; Within those contexts, He is right on all counts: house prices are not over-priced when all those factors are taken into account! Whether it is good in the long term is not his responsibility. O wait! It is his responsibilty, He's Prime Minister

[Daytr]

Exactly Bjauck, Key will say anything that is politically prudent, not what is necessarily the right thing, in fact with Key its very rare that the politically correct thing is the right thing. There are more & more calls for lower interest rates, however solely the Auckland property market is the reason we wont see them. Meanwhile Key is sitting on his hands in regards tools at his disposal.

[fungus pudding]

Exactly Bjauck, Key will say anything that is politically prudent, not what is necessarily the right thing, in fact with Key its very rare that the politically correct thing is the right thing. There are more & more calls for lower interest rates,

Of course there is; just as there is always plenty of demand for higher rates. It simply depends which side of the fence you're on.

[Sgt Pepper]

Of course there is; just as there is always plenty of demand for higher rates. It simply depends which side of the fence you're on.

I listened to BERLs chief economist Dr Ganesh Nana on the radio this morning. The sense of frustration amongst economists (Major Von Tempsky is the exception no doubt)) with the governments reluctance to step up is boiling over. Reminds me of the Muldoon era. If its like this in the public arena one can imagine the screaming matches in private. Good analogy would be the ground proximity alarms in aircraft...". PULL UP.. PULL UP NOW...

[fungus pudding]

I listened to BERLs chief economist Dr Ganesh Nana on the radio this morning. The sense of frustration amongst economists (Major Von Tempsky is the exception no doubt)) with the governments reluctance to step up is boiling over. Reminds me of the Muldoon era. If its like this in the public arena one can imagine the screaming matches in private. Good analogy would be the ground proximity alarms in aircraft...". PULL UP.. PULL UP NOW...

I'm not too sure what you want the govt. to do. But be careful what you wish for - in case you get it. Think of Muldoon's rent freeze, and his claw-back tax; think also of Rowling's spec tax. All these things did more harm than good. And we know CGT doesn't work to lower prices. This sort of nonsense - runaway prices - happens from time to time in all markets, not just real estate. Panic not. The world will still be revolving for a few decades yet.

[Bjauck]

I listened to BERLs chief economist Dr Ganesh Nana on the radio this morning. The sense of frustration amongst economists (Major Von Tempsky is the exception no doubt)) with the governments reluctance to step up is boiling over. Reminds me of the Muldoon era. If its like this in the public arena one can imagine the screaming matches in private. Good analogy would be the ground proximity alarms in aircraft...". PULL UP.. PULL UP NOW...

Maybe JK is in a WW1 frame of mind at the moment and his aircraft of state is from the less sophisticated Snoopy v. Red Baron era!

[artemis]

... But is it not also true that the game being played by many landlords is generally to keep overall interest costs close to rental returns, by buying more assets over time, not worrying about any capital repayments, just inflation and appreciation in heady markets sustained by more immigration? This plan works fine when everything is moving up, not so good when it's going the other way. A lot of rental houses came back on the market in the last downturn. .... .

Depends what you mean by 'many landlords'. That is a stretch, considering that around 80% of residential rentals are owned by people with just one or two rental properties. And bear in mind that the 'heady markets sustained by more immigration' applies pretty much to one market ....

[Daytr]

Really, who is calling for higher interest rates?

Of course there is; just as there is always plenty of demand for higher rates. It simply depends which side of the fence you're on.