Originally Posted by
SBQ
Still no excuse for NZ to have a limited range of investments. The reason is clear - past NZ gov'ts have successfully turned houses into a commodity for maximum profit, while other investment choices like Kiwi Saver / PIE funds are taxed at RWT. If you look at America (like Canada), the tax approach there is entirely the opposite of NZ. Own more than 1 house and you will pay CGT. Want to invest in the stock market via an education / disability / TFSA RothIRA fund - then you get the tax free or tax deferred benefits. The wealthy realise the cards are stacked against them if they use houses a as commodity to profit (even with mortgage leveraging). If you're a non-resident wanting to buy a house in Canada, you pay a 20% 1 off tax! (that's $200K for every $1M on a luxury house, not small change here). Leave it empty like a vacation home, and you'll be dong with a Vacancy tax every year. The message is clear over there just like the message is clear in NZ that houses has made the top 10 or 20% of NZ rich.
Remember, 20+ years ago NZ treated all asset classes the same - foreign shares or not, they had no CGT or taxes applied to them. Then FIF came along to penalize foreign share investments (interestingly FIF does not apply to houses overseas) ; all while capital gains on houses were not touched. What kind of message is the NZ gov't telling? The UN is certainly not fooled about this kind of approach.