Capital Gains Tax

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Originally Posted by Sir Ten

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- In the meantime, a large proportion of Gen X'ers and Millenials probably need to come to the realisation that home ownership is not going to be the norm for their generations. Their job is to stop procreating - which has been helped by slow wage growth relative to house price growth - i.e. large families (say, 5+) are unaffordable
- Therefore, in 30 years time we have less people, more houses and prices go down.

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If home ownership is not going to be the norm then it should not be treated as a special case. Net imputed rent should be taxed just like the interest from a term deposit is taxed or non-cash or fringe benefits are taxed.

Immigration not natural population increase has been a big driver in creating the demand for the limited supply. Boomers were happy to see this result in a surge in prices for their homes and rental investments often enjoying more in this untaxed capital gain than from employment or business.

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I know it's very simplistic and that the government can and will tweak around the edges but, as we've seen, all governments (regardless of colour) have struggled to make much of an impact.

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They have been kicking the can down the road.

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The variable in there that needs some attention is wage growth. And by wage growth I mean, productivity driven wage growth, not wage growth driven by government intervention (minimum wages) which just leads to price increases and inflation. At the moment, it seems like our pollies are throwing darts at the board with things like fees-free university, etc.

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Productivity growth requires capital investment in business - why invest into business when you have gotten so much untaxed leveraged capital gain in real estate? Successful NZ companies have so often had to relocate their listings to Australia to access capital...

Offering meaningful change makes Parties unelectable in NZ?

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Originally Posted by artemis

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But first governments, central and local, need to step out of the way. Sort the RMA, sort the rural urban boundary, sort consents process and costs, stop interfering in the rental market more than with other businesses.

Realistically there are going to be some limits, but need be nowhere near as many as there are now. But if people in the supply chain can make a decent buck from building, they will. And if cheap, people will buy or rent. Might mean cookie cutter or imports in containers from China. Might mean permanent trailer parks.

Might be like an idea Rodney Hide wrote about a few months ago, a small trial subdivision where people could buy a section and build what they like with minimal or no consents or comebacks. Every buyer agrees.

People put up basic baches for generations and just got on with life. Worked well.

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Back to dangerous and unhealthy slum housing and landlords?

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Originally Posted by Bjauck

Back to dangerous and unhealthy slum housing and landlords?

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That's a simplistic and skewed point of view. Have you read the Healthy Homes standards?

If there is a shortage of rental housing, people will be much more likely to bunk up together. And there does seem to be a shortage atm, though perhaps mainly for those the private sector is not at all interested in offering a tenancy to.

If a rental does not meet all the current and coming soon standards landlords are in for huge fines. It does not mean the property is dangerous, or a slum. It might mean the insulation met the standard 3 years ago but no longer does. But might well mean the insulation does not get topped up, tenants get kicked out, move in with the rellies and the place goes on the market

"University of Otago public health professor Philippa Howden-Chapman said overcrowding was the single biggest housing-related cause of poor mental and physical health."

https://www.stuff.co.nz/life-style/h...ing--economist

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Originally Posted by artemis

That's a simplistic and skewed point of view. Have you read the Healthy Homes standards?

If there is a shortage of rental housing, people will be much more likely to bunk up together. And there does seem to be a shortage atm, though perhaps mainly for those the private sector is not at all interested in offering a tenancy to.

If a rental does not meet all the current and coming soon standards landlords are in for huge fines. It does not mean the property is dangerous, or a slum. It might mean the insulation met the standard 3 years ago but no longer does. But might well mean the insulation does not get topped up, tenants get kicked out, move in with the rellies and the place goes on the market

"University of Otago public health professor Philippa Howden-Chapman said overcrowding was the single biggest housing-related cause of poor mental and physical health."

https://www.stuff.co.nz/life-style/h...ing--economist

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Slum housing for some seemed to be the inevitable consequence of what you were suggesting. So it is just that you want standards not to improve (for rental properties) - for them to be stuck in a time warp? So we need to provide more social housing to replace the gap left by landlords who would only have provided the sub-standard rental properties.

Over-crowding is the biggest cause. Government (local and national) have failed to ensure housing supply (and other infrastructure) has been able to keep up with its immigration settings. That s the trouble when the only way (under current policies) to boost the economy is by boosting the population.

Presumably there are other causes too. All those crowded boarding houses at private schools had better watch out!

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Originally Posted by Bjauck

Slum housing for some seemed to be the inevitable consequence of what you were suggesting. So it is just that you want standards not to improve (for rental properties) - for them to be stuck in a time warp? So we need to provide more social housing to replace the gap left by landlords who would only have provided the sub-standard rental properties. ....

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Like I said above, have a read of the Healthy Homes regulations, not really for homes, just for rentals. And the long list of fines in the Residential Tenancies Act. If a landlord has to pay average $8k to meet the standards, the rent increase for a 2 bedroom townhouse in Parnell might work well. A rural 2 bedroom rural cottage not so much.

The HH standards are highly prescriptive and some very complex. Plus a range of new measures from Minister Faafoi. Yes they might improve conditions for tenants and actually good for landlords that stick around as they upgrade and raise rents so the tenants pay.

Landlords can make other decisions, because they can. 37% increase in house sales in September yoy - wonder where those come from?

Consequences.

As we have previously discussed rentals tend to accommodate more people, so a substandard house with just one owner-occupier would be less hazardous to them than if they had four additional house-mates. However I agree, higher standards should be phased in for all NZ housing.

Anyway we are highlighting the need for whatever government comes into power to introduce housing policies to relieve the housing shortage that has accumulated over the years if not decades. Housing has not kept up with immigration.

Thousands and thousands of rental vacancies advertised right now.

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Originally Posted by artemis

Thousands and thousands of rental vacancies advertised right now.

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What do you think that means? Post covid restrictions boom? Landlords with too high rent expectations in a covid recession? New landlords seeking tenants?

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Originally Posted by Bjauck

What do you think that means? Post covid restrictions boom? Landlords with too high rent expectations in a covid recession? New landlords seeking tenants?

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Maybe all of the above and more. Even so, 20,000 waiting for heavily taxpayer subsidised housing can apply for them. And the taxpayer will still supply the Accommodation Supplement, TAS, bond and initial rent. Hard to keep talking about housing shortage with thousands of rental vacancies.

If landlords decide not to reduce rent they will have their reasons. And if they are forgoing income the reasons will be acceptable to them.

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Originally Posted by artemis

Maybe all of the above and more. Even so, 20,000 waiting for heavily taxpayer subsidised housing can apply for them. And the taxpayer will still supply the Accommodation Supplement, TAS, bond and initial rent. Hard to keep talking about housing shortage with thousands of rental vacancies.
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Covid recession and covid tourism restrictions means a change in employment opportunities. Some regions are more heavily impacted. I would say that that since lockdown restrictions were eased there would also be population movement - so perhaps there could also be quite a few tenants looking for accommodation too. A jump in available accommodation at the moment, may not necessarily mean there are not still many people who are living in overcrowded conditions.

Also with fewer foreign students, and fewer inward arrivals generally, there may be previously rented out accommodation looking for new tenants.