Originally Posted by
Bjauck
very little tax is made from residential property investment as most gains are untaxed capital gains. Even when tax is paid in the form of rates, they are often paid grudgingly,,,At the very least perhaps, stamp duties could be paid on investor and foreign purchases.
IFT is definitly one of my better investments, However it was floated in the 1990's whereas Skid bought his house in 1984. It would have been interesting to see how IFT would have coped with the 1987 meltdown.
A great investment and amazing that you could do it without leveraged finance. You put in hard work to turn it around - and have got a good return for your efforts. Most of that return has added value - mostly capital value - to your property, which will not be taxed when you sell. Similarly you have enjoyed periods of increasing land values. Other people work hard and their effort is rewarded by earning a high income, all of which is taxed. Society needs to determine if that is fair.
As you say maintaining a rental property, if you do it yourself, does require hard work and there can be periods when you do not have a tenant.
As property has increased in value so much more than inflation and incomes since 1984, I wonder if people could do what you did, without needing to borrow.
Certainly unleveraged landlords could pay more in the way of income tax as they do not deduct interest charges from rental income. However rental returns would still be a minor part of their total investment returns and the expectation of capital appreciation must be a dominating motivating factor especially in a market like Auckland where average gross rental return is about the same as a 1 yr term deposit interest rate.