How is removing a tax deduction a new tax?
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How is removing a tax deduction a new tax?
SBQ maybe read this yet again you are wrong
https://www.nzherald.co.nz/nz/no-tax...BZ36DU2GMOBUI/
You are referencing the very guy that was part of the Tax Working Group that advised Jacinda that NZ needed some form of CGT. But if you think the sale of shares equates to the same as the sale of residential houses? I tend to disagree. The NZ housing market has turned into a meme investment for the past 40 years where the losers are those that can't save enough to own one one and the winners are the wealthy that could own more than one. This is a major difference than those that have lost on share investments.
Yes I stand corrected that NZ does not have a CGT on the sale of appreciated assets. However, when everyone knows that an asset like homes always go up in value ; this is certainty not the same as believing investments in NZ shares also go up in value (it's an entirely different risk level and not a necessity like a roof over your head). Too many landlords have gamed the system, exploited houses for their benefit to profit for retirement.
Got to be a special kind of person to believe houses are investment tools to profiting.
You raise an interesting point SBQ. The assumption that house prices always go up....which is probably true in the long term. However if there is a correction to a bubble (perhaps debt default contagion in Europe....remember PIGS anyone?) and the government could be on the wrong side of the equation.
Post GFC through to about 2012/13 prices in provincial and coastal NZ took a mighty tumble.
As our family lawyer once told us long ago, "You can't separate the house from the land it sits on" meaning, property titles and rates bills include the land + capital improvements. No one that buys a piece of property goes under the assumption that their purchase will decrease in price ; you can take that to the bank.
Would it be fair to say since last year, house prices that went up over 20% is well in excess of the CPI / inflation rate in this short term period?
I should thank all those property investors that jumped into buying houses. If the house price rise was only a meager 5%, then the Labour Party would of just let it go.
It won't decrease in price (nominal) but it will decrease in value (real).
If it were possible to buy a block of land - split in two, and build a house on one - leaving the other half vacant. Fifty years later pull out the plans and build a brand new carbon copy of the first house. The new one will be worth considerably more. That is because the first one will have depreciated.
But it's not just at 50 years. It happens throughout the life of the building. The reason recent price rises went up in excess of 20% is because they were too cheap - the market was caught sleeping. New homes sell on a cost plus basis, whereas existing homes sell on a comparative basis, which is often lagging. The real estate market is largely a second hand market so will always have fits and starts.
One of our more distant relatives owns a house under the scenario you outline above; they own the dwelling, but not the property which is leasehold. They receive two rates notices, one for the capital improvements (dwelling) and one via the land owner for the land itself. They are currently concerned about the depreciation of value on the house, as it is quite old, and people are actively avoiding purchasing properties under leasehold situations.