I think craic was suggesting he could trade down.
Printable View
Surprise surprise someone else thinks a capital gains tax is a good idea. I should have checked him out first in case he turns out to be a nutcase.
https://www.stuff.co.nz/business/ind...-oecd-official
Sensible and fair he suggests. Although the article suggests that "The idea remains unpopular with many New Zealanders, in part because of concerns it could discourage investment in new housing and push up rents, and because of compliance costs." In small part maybe but the main reason must be that they don't want to pay more tax.
"The Treasury has previously estimated that a broad-based capital gains tax, that excluded gains on owner-occupied housing"
https://www.stuff.co.nz/business/industries/104262446/capital-gains-tax-sensible-and-fair-for-nz-says-oecd-official
Apart from the backlash from entitled home owners (increasingly becoming a wealthier minority), Why should owner-occupied housing be excluded? Excluding it will only continue the shift of investment into residential land,and in the absence of wealth or estate taxes, it will perpetuate the deveopment of a shrinking landowning elite who find it is tax efficient to over-capitalise their homes...
Personal circumstances including singles, childless couples and where people have to shift frequently, may mean home-ownership is not the optimal form of obtaining accommodation. In such cases their equity may well better be deployed in creating businesses or investing in income-generating share investments. Yet if they invest all their capital in such vehicles as opposed to their own homes, they would be liable to capital gains.
https://www.stuff.co.nz/business/106...--is-that-fair
More envious people trying to make the world a better place?
True "fairness" is subjective and is determined by those in a society who have the power and control. I guess the tipping point will be when what is "fair" increasingly advantages only a shrinking minority (of politically active people) and a new "regime of fairness" will be ushered in. The beauty of a functioning democracy is that regime change occurs peacefully and comparatively gradually.
Does anyone know what date the TWG interim report is actually due to be reveled this month?
I don´t think there is a fixed date, just "before the end of September". The Government already has the interim report so I assume as soon as they´re comfortable with answering all the questions it´s release will prompt, they will release it !!
Apparently they´re not as enthusiastic about CGT as they were when they started this process !!
Well that's one good thing to come out of it ! Tho the devil will no doubt be buried in the detail...
It'll be about trade-offs and political spin, like:
"Hey Michael, we can't have a CGT in our first term, so if you want to keep sucking the hind tit you'll park that for consideration when we get a second term, but in the meantime I want you to legitimise all the new taxes and tax hikes that we put in place when we said there'd be no new taxes, and find a few more that we hadn't thought about. There's a good lad."
This from Sir Michael Cullen today : "We have come out with a more general conclusion that taxation has only a limited effect on the housing market and the [housing] problem remains one of supply."
Grant Robinson could have taken a momentary glance at countries that have CGT to come to this conclusion, rather than this very expensive and waste of time (I suspect) Group.
NZ is one of the few OECD countries without CGT. They must therefore be wrong and we are right. ?
As for housing, the market is always right so how come we have a supply problem?
The old saying the rich get richer and the poor get poorer certainly applies to NZ
westerly
The point is that Labour has been selling a half arse form of CGT as a fix for the housing market, or rather high house prices. They are starting to realise that is complete humbug. I have a couple of rentals in a country where there is a 20% CGT and that country has exactly the same problems with housing becoming out of reach for young people, mainly due to Air BNB and lack of supply in the biggest city. Sounds familiar ?
For the record, I am not against a comprehensive CGT if it was part of a restructure of the tax system, but I am against a half arsed attemt that is nothing more than extra tax grab.
Doesn't take a genius to look up electoral results for well off areas like Epsom , Tamaki to see that they are decidedly right voting.
http://www.stuff.co.nz/national/poli...nked-to-income
Fom MSM reporting of todays announcements
"The TWG's interim recommendation is that if the Government was to widen the taxation of capital gains, it should do so by extending income tax to more forms of capital gains – rather than introducing a new tax as such, he said.Tax could apply either when people sold assets such as investment properties or shares, or a second option was that people could be required to pay tax more regularly on the value of money they had invested – in a similar way to how some investments in foreign shares is currently taxed – he said.
In either case tax would only apply to assets bought after the tax came in, Cullen said, rather than assets they already owned."
So just hinting at normal income tax for capital gains. Then the question will be what, if anything, will be excluded ? Private homes, inheritance etc etc
IN the Netherlands you are taxed each year from memory 4% on the value of your assets outside your home on anything over 25k Euro. That is a killer if you want to invest in equities or anything for that matter like a second home. I hope the COL do not get stupid ideas like that.
Does any body has link to how to work out WACC with share trading please?
I think a CGT on shares (without a CGT on the family home or PIEs) would further reduce NZers share investments in favour of building up the nest eggg of an expensive home. It is not as though share investment is prevalent in NZ in the first place.
The TWG should also address the fact that investors in fixed interest are currently taxed on the inflation aspect of their returns whilst other investments currently have tax free capital gains due to the impact of inflation.
However - realistically - in NZ the interests of individual investors who invest in shares will be given scant attention as there would not be many votes in it. Whereas the treatment of real estate will have greater electoral impact.
"However - realistically - in NZ the interests of individual investors who invest in shares will be given scant attention as there would not be many votes in it. Whereas the treatment of real estate will have greater electoral impact."
This is very depressing , but also so true :scared:
Interesting points. I think Cullen has good points. viz:
Even though most people in NZ support a capital gains tax, it is generally not a burning issue for its supporters. Also, with the ageing population it is likely that support for a capital gains tax will diminish - oldies being more reliant on investments.
I think 777 just confirmed Michael Cullen's concern that it might be now or never for a capital gains tax.
Although some of the headlines I've skimmed sounds like the tax working group can only come up with half arsed proposals that are politically palatable.
Don't worry 777 I see Simon Bridges has promised to repeal any capital gains tax.
He won't need to as IFRC a capital gains tax won't be enacted this term and they won't get a second unless they get away with less than the 5% bar for the other losers. And then that may even be a struggle. Mind you I don't think Simon will be the one having to make the decision.
Definitely if he doesn't win the next election. although he is popping up a lot in the media which is always good for a politicians standing. A bit like Judith Collins was popular in the media for a while but she comes across as a nasty bi*ch to me and maybe one of nationals strong links to china and the Chinese voters in nz.
TWG expected to deliver their recommendations this month https://www.stuff.co.nz/business/109...-it-would-work
Haven't seen much discussion of the most relevant outcome for this forum, which is that CGT will affect all local equity market investors.
It seems like the PIE fund regime will now incorporate a deemed rate of return tax for local equities, much like the FDR regime used for foreign shares.
Meanwhile all shares held on a segregated basis will be subject to a CGT on realised gains.
I guess the implication is you want your growth stocks held in a PIE fund, and dividend stocks held in their own account.
Well as nothing definite has come from the TWG then it is all speculation on what could happen.