Is Property tax important?
https://www.bloomberg.com/news/artic...-seattle-homes
Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes
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Is Property tax important?
https://www.bloomberg.com/news/artic...-seattle-homes
Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes
http://www.iexpats.com/luxury-house-prices...g-around-world/
Luxury House Prices Cooling Around The World
Property Tax.
Oh, please no. The IRD seems incapable of administering the plethora of existing taxes. Who knows how they'd cope with something new.
GTM 3442
There is a criticism if they can implement tax for stocks, employee earnings and other assets why not impose on property traders as well? Particularily New Zealanders are finding difficult to rent and buy houses now. New Zealand is one of the countries which doesn't implement capital gain tax on property.
Correct, and though not a CGT as such, it can be as high as the top marginal tax rate. which BTW is a lot higher than the CGT tax proposed by Labour. And it applies to any trader, not just in property.
From time to time IRD quietly announce their focus areas. Property traders have been on the radar for several years, supported by increased compliance budget.
Agree.
The only solution for complexity is simplicity ...
A few years ago there was a reform project and one member of the team said it was to revise the tax act and simplify it.
Laudable objectives.
It didn't happen.
The revised act was bigger and more complicated.
Then FIF, Pie Tax with no refunds if overpaid ...
Anti Terroism and Money Laundering Act made investment complicated for kiwis while overseas trusts not affected ....
If I am correct the Morgan Foundation has proposed the comprehensive capital income tax (CCIT) as a way of closing some loopholes. If you realize current property boom mainly limited to English speaking countries such as UK, Canada, UK and Australia. They say foreigners can afford to buy property but long term citizens cannot think about buying property. For example some employees in Auckland moved to other areas as they couldn’t afford to rent. They also say only way to stop this property boom is introducing capital gain for property traders excluding living home (first home). Is it making sense?
Robertson today said the government wants to address the issue where property speculators haven't paid tax on income from selling houses at a profit whereas salary and wage earners' incomes are captured.
http://www.scoop.co.nz/stories/BU171...tax-system.htm
I believe Sir Michael Cullen may propose tax proposals for the benefit of unaffordable New Zealand citizens. In addition, he may propose capital gain tax for trading houses which is similar to trading stocks and other assets. Sooner they implement it may be better for the economy. Otherwise there may be another banking and financial crisis.
In short this time is also not different. History should repeat in a different manner. I am very fearful on things happening in the overvalued property markets throughout the world.
Correct, but marginal income tax rate on profits is likely to be a lot more than any CGT - Labour's previous very messy policy was 15% CGT.
Can't see any proposed CGT being in the 28%-33% range, so traders will be very very happy.
Labour's CGT proved electoral poison at 15% ....
Really? Quote from "newsroom " article.
"Currently, regular 'Mum and Dad' investors know that leveraged investments in property are not subject to capital gains, unless they are in rental properties sold within two years of purchase. Given the doubling of house and land prices over the last 12 years and their ability to easily borrow to buy these assets, buying more property has been a no brainer. They know that investing their savings in a term deposit or an investment fund in the stock market would generate earnings that were taxed every year, either through withholding tax on interest or because income from buying and selling shares would be treated as income. They also can't borrow to invest in these assets. It's a simple choice that means households now have over $1 trillion invested in housing, while have just $163 billion in bank deposits and $56 billion in investment funds such as KiwiSaver."
westerly
Profit from rental income is taxable, just as dividend income is. Costs incurred in generating income does not form part of the profit (i.e they are deductible) The same rules apply to all income generating investments. It is incorrect to say they cannot borrow to invest in other assets.
Correct. I borrowed $100k to buy a share investment post GFC. I can deduct the interest charges against my income, but I pay tax on dividends received. This investment is now worth $220k (yes equity markets have gone up a bit) and I have sold and pay no tax on the $120k gain. I do not see how the property market has advantages. Just a lot more costs.
I do the "accounting" for my partners rental portfolio. The returns even with the capital gains are pitiful compared with equities.