With 18,600 gain in people coming into the country over people leaving the country last year during a recession, one might expect a building boom. However the GOVT are making silly noises about a capital gains tax on property owners, which should see a great rush towards the door.
It is my view that it matters very little in the broad term who actualy owns property.
It is in the GOVT interest that we all rent allowing them to tax landlords.
It is the mum and dads interest to have a safe haven for their savings rather than trust all the dodgy snout in the trough business people in this world.
Property in a rising population, should increase higher than inflation, however if we all rush in to buy to become rent free as a method of saving for the future then we cant have that can we ?.
Money to buy property is far cheaper to be run by private individuals, rather than from the council or the state where added running costs far exceed what mum and dad private ownership can acheave.
With any luck which I doubt they wont wreck the last safe haven for mum and dad investors. Macdunk
Future Property prospects.
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23-11-2009, 04:14 PMduncan macgregorFuture Property prospects.
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23-11-2009, 04:40 PMArbitrage
If you look back at all the declarations made about our politicians financial holdings you will find that most of them own at least two properties. I think this will be a huge disincentive to changing the law on taxing investment property.
I am still uncertain about all the fuss. Rental properties are just another business. Profits are taxed, and losses can be claimed against income. Exactly the same as owning a fish and chip shop so why do people moan about it? -
23-11-2009, 04:52 PMfungus puddingGod only knows. Residential landlords should be given medals, knighted and receive govt. paid annual holidays in luxury resorts plus free psychiatric care. Especially the last bit.Quote:
Originally Posted by Arbitrage
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23-11-2009, 05:43 PMDr_WhoWOOT! You can now call me Sir Doc and you can contact me permanently at the best resort in the Cook Islands. :DQuote:
Originally Posted by fungus pudding
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23-11-2009, 07:00 PMAMR
CGT will be the best thing that happens for property.
Rents will skyrocket, so buying for cashflow actually becomes possible. -
23-11-2009, 07:32 PMJayAgree with f p as well.Quote:
Originally Posted by Arbitrage
It is that many buy for the "capital gain" and use the expenses to reduce their own tax and they never (hardly ever) get taxed when they sell ( hence the "fuss") and many do/have sell/sold, there was a lot of that before the property market dropped after the huge gains. It is this the IRD needs to get on top of so to speak. -
24-11-2009, 10:36 AMbeaconHow so?What is the overriding advantage or connection in your opinion AMR?Quote:
Originally Posted by AMR
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24-11-2009, 11:39 AMSnapper
People will borrow to buy property whereas they generally don't to buy shares so in that way its not 'just another investment' due to the particular distortions that borrowing creates ie buying to make tax losses and capital gain rather than income. When selling, all sots of shenanigans go on to avoid paying back depreciation claimed.
Widespread borrowing for rental properties and housing in general has also increased NZ's risk profile which is a reason our interest rates are higher than a lot of other countries.
The above are good reasons to treat rental properties differently than other investments/businesses. Personally I won't touch one until I know what the govt are going to do in this area. They will do something, there's even a lot of acceptance out there about a capital gains tax. Don't think they'll do it, however, but ring-fencing losses looks a better than even chance. -
24-11-2009, 12:46 PMAMRIMHO...Quote:
Originally Posted by beacon
Future capital gains are taxed/decreased, but for buy-and-holders like myself cashflow will improve (which we will recieve in a much shorter timeframe).
Ring-fencing...now that is the scary one! Anyone highly leveraged with a high depreciation component is dead! -
24-11-2009, 10:01 PMCJIf they ring fence, cant I just move the debt from my rental to my shares (secured by the rental so interest is low) and make a loss on my shares?Quote:
Originally Posted by AMR
Are they going to ring fence everything else.
Have they considered removing deprecation. it is that non cash expense that subsidises housing. Everything else is an acutal cost and therefore an actual loss. -
24-11-2009, 11:12 PMbeaconI still don't understand. Do you mean that CGT introduction will prompt/induce landlords to somehow pass the tax to tenants by way of a rent increase. I seriously doubt that in the current economic scenario.Quote:
Originally Posted by AMR
In my view, as long as bank lending to small business and investors remains tight, I don't see any sustainable improvement in either the economy/employment/wages or our GDP. But ironically, lending won't be loosened without asset reflation, low interest rates environment and currency pain.
Good things are happening though. Migration is picking up. Bollard has shown committment to hold interest rates low. Key has sealed some brilliant FTAs. Kiwisaver is slowly building up the national pool of investible savings. But miles to go before we sleep... -
25-11-2009, 09:45 AMduncan macgregor
I always used property as a cheap way to borrow money for my business ventures.
The bank had the security of this asset rather than pie in the sky schemes to consider allowing me cheaper rates than I might have expected.
Try buying a bulldozer or digger on credit where you might expect it to pay for itself in a couple of years doing the project.
The business world runs on credit, property is the banks safest investment lending money.
The number of houses in the country is ruled by supply, and demand, to many the price drops, to few the prices rise, which rules how many new homes get built.
Mum and dad buy a house they borrow money. The landlord buys a house he borrows money and pays tax with the tenants money. The council buy a house to rent out they use your money pay people to watch over it pay tax and increase your rates.
There is no requirement to state what happens when the GOVT buys a house we all know who pays for that. The very cheapest way is encourage the mum and dads to borrow money to buy a property rather than get ripped off by the business world as happened so often in the past. It in the GOVT interest that they tax and control every little aspect of our lives even owning your own home. Macdunk -
25-11-2009, 09:53 AMArbitrage
Yes just drive around any state housing area and the houses are poorly maintained by the landlord. As a private landlord I can't afford to do that or the value of my investment decreases and the rentable value will decline. The government, while it does have a social role, makes a poor landlord.
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25-11-2009, 10:01 AMfungus puddingI think anyone would given the quality of many of their tenants.Quote:
Originally Posted by Arbitrage
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26-11-2009, 09:53 AMDr_Who
I can see a possible shortages in rental property with this new tax coming up. Why would anyone buy investment properties if the numbers dont work out? Tenants will be the ones losing out. Just have to look at the Aussie market to see where we are going with this.
But then, I am only guessing at this stage. Need to see the detail of the tax changes before one can make an assessment. -
26-11-2009, 10:00 AMfungus puddingNo need to worry. CGT is only payable when there is a CG. :DQuote:
Originally Posted by Dr_Who
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27-11-2009, 08:20 AMArbitrage
I see the sydney house prices are now averaging around A$600,000. Talking about capital gains, is this the future for Auckland? We have followed similal trends in the past. The way population growth is going here, you would have to look at property as a medium to long term punt, barring an extreme form of cgt being introduced.
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08-12-2009, 09:13 PMAMR
Great article in the NBR last week.
Basically it is saying that CGT and land taxes have fallen out of favour with the politicians, and the removal of depreciation and/or ring-fencing is the more likely option. Argument goes that depreciation is wrong because the assets rise in value. -
09-12-2009, 08:39 AMfungus puddingQuote:
Originally Posted by AMR
I'm not sure where you heard that argument, but it's nonsense. Asserts rise in value when , as they get old they become worth more than a replacement new one. A second hand sheet of gib-board has most definitely depreciated. So has every other building component. So depreciation is a genuine cost, albeit not a cash expense. It was a bit of an anomaly a few years ago, but an amendment to tax law has made recovered depreciation taxable.