Originally Posted by
SBQ
If I make an investment in starting a small business, and it has long term assets and equipment that depreciate to a salvage value. When I plan to close up the business, these assets are taxed. Accounts receivables & cost adjusted inventory is also taxed at winding up the business. Then tell me why is it a rental property house after 5 or 15 years is sold without paying tax on the capital gain?
What is radical is the difference in capital required to buy a home. The individual or couple looking to buy their 1st home only has so much capital (earning ability). But to the landlord that has a much larger asset backing + cash flow, can easily pay MORE for the house in question. Capital is not free, it's strongly discriminated where the banks prefer to lend to less risky investors with high incomes and strong collateral backing. Basically the NZ housing market has turned into a meme stock investment portfolio and the losers are those that can get in and, if they do, they will pay dearly on long term 30+ year mortgages. Something that the Labour Party can do is implement what Canada has done for 1st time home buyers. Since the NZ banks have changed to a 40% LVR deposit - make an exemption for 1st home buyers of only requiring 5% deposit. For as long as I can remember since late 80s, Cdn gov'ts has forced banks to comply with this 5% deposit regardless of times during the economy.
Building new houses? Sounds like a business venture if the intent is to sell for a profit. But don't make it sound so bad, the Brightline test on new builds is still only 5 years. So one can invest into building new and hold them for 5+ years and sell for the tax free capital gain ; a move where most OECD countries won't allow regardless how long you hold them.