Sorry Duncan, my spreadsheet is a bit out. If I go to www.sorted.org.nz/calculator_index.html I get a more precise figure of 15.8% - still a figure not to be sneezed at. What are you looking for? I've also misunderstood the mans intent - I thought he intended to resell the property at some point at a profit for the kids education. Since its not a residential home, a business or farm I took it that he wouldn’t be CGT exempt. I’m sure there is a tax expert on ST who could clarify!. I think we all understand how lifestyle and all other properties have appreciated recently but as I mentioned before I think the gloss of this type of purchase will wear off thus lowering the expected rates of appreciation. To ensure he’s not a dummy he needs to make an informed choice and the questions seem to be: Will the land continue to appreciate at 15% - I don’t think so. Will there be a buyer around in 5 years time who will pay $680 – I don’t think so. How long will it take to cash up? I know of one property locally that has now been on the market for over a year and the price has dropped $50k. Can he improve on his $340 k current position – undoubtedly yes but where will he get the best return? Time will tell!Quote:
quote:Originally posted by duncan macgregor
MINIMOKE, Your arithmetic is so far out its unreal. $68k at 17pc over 11 years ?. No capital gains he is not a trader its not a business. Rural lifestyle land is and has skyrocketed they dont make it anymore, it will go up faster in the future. No upkeep, no mortgage, rates paid, he would be a dummy to sell. macdunk