Originally Posted by
SBQ
Yes i'm aware IRD will simply treat property gains as straight income gains whereas in Canada, the same situation would be the capital gain would be simply treated as capital gains tax (a different rate / criteria). My problem is in NZ, there is no clear distinction for those 'buying houses with the intent to make a profit.... but hold the property well after the 2 or 5 year brightline test' and therefore able to sell the house without IRD being aware of any knowing that rental income has been collected on the property. They've basically kept a complete blind eye on this area with no internal checks. For eg in Vancouver the city council compile records on how the property is used. ie. say if the person intends to rent a portion of the house out, then they require a rental license from the local city council ; for which the home owner has to declare on their insurance policy, for which the home owner has to apportion what % of the house is rented out to the CRA so when the time comes they sell the house, ONLY that % portion NOT used as rental is tax free on their principal residence (under the change of use of the principal residence act). Even leaving the house vacant, the City of Vancouver compiles that data and forwards it to the federal level.
Ms Ardern is a joke. Spent all this $ on an independent TWG - only to say no against their advice. Why was there a lack of communication between her Labour Party caucus and the TWG, WITH the NZ public? What came to her decision? What factors she did not like? The people voted her in to address housing affordability and she's failed miserably in this area. While countries like Canada have made great efforts to address affordability while at the same time, discouraging the incentive to use houses as a profiting tool. Because having grown up in Canada, only very few people i've come across make big $ from owning real estate; the vast majority have made their wealth on the sharemarket. But as i've said before in another thread, NZ's tax structure clearly discourages direct investment in foreign shares that fall under the FIF regime. Those living abroad wanting to reside in NZ would be hit with FIF on their overseas investments - yielding the only migrants that come to NZ are the poor ones that have no significant assets abroad.