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  1. #16
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    I'm amazed that the government (or councils) make bugger all from property sales. Imagine how much a graduated stamp duty tax would bring in! Starting at 2% at $500,000 and over and gradually moving up to 5% on $1,000,000 .... Auckland could have that new harbour crossing paid for in weeks ;o)

  2. #17
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    Quote Originally Posted by BlackCross View Post
    I'm amazed that the government (or councils) make bugger all from property sales. Imagine how much a graduated stamp duty tax would bring in! Starting at 2% at $500,000 and over and gradually moving up to 5% on $1,000,000 .... Auckland could have that new harbour crossing paid for in weeks ;o)
    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.

    Quote Originally Posted by kiora View Post
    By my rough calculation it works out out at 20% compounding return/yr
    Infratil is close to that
    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.

    Quote Originally Posted by skid View Post
    Your right its a great return,although there has been no return,except managing tenants--It started out as our family home and something I could put my energy into--I didnt leverage as some do--and agree with some of your points,but so far Ive been taxed just like with shares--but the market HAS gone a bit crazy and it cant continue --Thats why at this point its a much harder decision(although at the time we didnt know this was going to happen with prices)--It could also crash as well..who knows.
    I got lucky with prices ,but if you saw the house before ,you wouldnt recognize it --there are still places where houses are relatively cheap,but you would have to adjust your lifestyle to be in a different area....well..gotta go ..Ive just lost a tenant,and the other one doesnt knoiw how to change a light bulb.
    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.

  3. #18
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    Quote Originally Posted by BlackCross View Post
    I'm amazed that the government (or councils) make bugger all from property sales. Imagine how much a graduated stamp duty tax would bring in! Starting at 2% at $500,000 and over and gradually moving up to 5% on $1,000,000 .... Auckland could have that new harbour crossing paid for in weeks ;o)
    In much the same way a financial transaction tax that imposes a fraction of a percentage point could yield the Government billions?
    Last edited by Zaphod; 03-09-2015 at 07:32 AM.

  4. #19
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    it is so easy to buy shares and so difficult to buy an investment property in this market. Everything is up for auction and you are competing with so many competitors.

  5. #20
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    it is so easy to buy shares and so difficult to buy an investment property in this market. Everything is up for auction and you are competing with so many competitors.

  6. #21
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    Quote Originally Posted by voltage View Post
    Everything is up for auction and you are competing with so many competitors.
    But that sounds like just like the sharemarket

  7. #22
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    Quote Originally Posted by voltage View Post
    it is so easy to buy shares and so difficult to buy an investment property in this market. Everything is up for auction and you are competing with so many competitors.
    Mistakenly you posted this twice, but the hog thinks that's just perfect as your observation is correct and merits being stated at least twice.
    warthog ... muddy and smelly

  8. #23
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    Quote Originally Posted by voltage View Post
    it is so easy to buy shares and so difficult to buy an investment property in this market. Everything is up for auction and you are competing with so many competitors.
    With real estate, all your purchases are for sizeable sums as you cannot accumulate small parcels in the same way you can with shares. Comparative transparency of pricing is an advantage about buying publicly listed shares over property, especially houses sold "by negotiation" or "auction". Buying a house through an auction is a nightmare, when you have to put in so much "due diligence" prior to making a bid, which is all wasted when you are out-bid on the day.

    However, with property, if you have deep pockets and are prepared to pay "top dollar", you will get the property. By definition, all bids under the winning bid are "at below market price". Just like if I put an offer with my broker to buy Share "A" for $1.00, when the market price turns out to be $1.05. The difference being that I would be able to see (more easily) the change of market price for the share, provided I had an account with access to immediate pricing and provided I was glued to my computer....

  9. #24
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    And, of course, shares in (say) Fletcher Building are traded daily, whereas the houses you want to buy are traded infrequently.

    Which makes price discovery for Fletcher Building quite easy. And which makes price discovery for 56 Grantham Road quite difficult.

    Especially when coupled with the need to physically inspect the property.

  10. #25
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    And, of course, shares in (say) Fletcher Building are traded daily, whereas the houses you want to buy are traded infrequently.

    Which makes price discovery for Fletcher Building quite easy. And which makes price discovery for 56 Grantham Road quite difficult.

    Especially when coupled with the need to physically inspect the property.

  11. #26
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    Quote Originally Posted by Bjauck View Post
    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.
    I have real doubts that it could be done today,especially in Auckland --which makes the original question hard to answer--The fairness of it all is another debate (Ive just been a lucky bystander in many ways)--to me the whole capital gains thing would most likely work better if they determined the value of props when the law came into affect and work from there--trying to go retrospective would just be to hard and most likely wouldnt work--so at the moment Ive got big gains on paper--not a very big cash flow--high rates-and tenants--and then perhaps a tax to come--9Ive been pretty much buy and hold---those that flick are a different animale.
    Im also perfectly aware that this (what I believe)crash thats coming to the share market may well spill over to the housing market and reset values(but not rates)

    I still cant figure out why they dont use the existing tracks to Huntley and Hamilton for a decent commuter train into Auckland(thus opening up lots more affordable properties in those areas for those working in auckland.

  12. #27
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    Quote Originally Posted by skid View Post
    I have real doubts that it could be done today,especially in Auckland --which makes the original question hard to answer--The fairness of it all is another debate (Ive just been a lucky bystander in many ways)--to me the whole capital gains thing would most likely work better if they determined the value of props when the law came into affect and work from there--trying to go retrospective would just be to hard and most likely wouldnt work--so at the moment Ive got big gains on paper--not a very big cash flow--high rates-and tenants--and then perhaps a tax to come--9Ive been pretty much buy and hold---those that flick are a different animale.
    Im also perfectly aware that this (what I believe)crash thats coming to the share market may well spill over to the housing market and reset values(but not rates)

    I still cant figure out why they dont use the existing tracks to Huntley and Hamilton for a decent commuter train into Auckland(thus opening up lots more affordable properties in those areas for those working in auckland.
    There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
    https://www.facebook.com/HamiltonCommuterTrain

  13. #28
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    Quote Originally Posted by kiora View Post
    There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
    https://www.facebook.com/HamiltonCommuterTrain
    The distance from Hamilton to Auckland, would be commuting distance for many people going into London. If Auckland does not get its act together to meet demand, a fast motorway and train service to Hamilton (and not forgetting potential development of Mercer and Huntly en route) may be a solution.

  14. #29
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    Just recieved the annual report for year ending 30/06/015 and the return before taxation is 9.30%.
    A return of 8.29% if you are using 28% PIR.

  15. #30
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    Quote Originally Posted by Bjauck View Post
    The distance from Hamilton to Auckland, would be commuting distance for many people going into London. If Auckland does not get its act together to meet demand, a fast motorway and train service to Hamilton (and not forgetting potential development of Mercer and Huntly en route) may be a solution.
    Its a good idea, but they can't even get a train to the North Shore (which is just a few km from the CBD), which is in desperate need of one, and has been in desperate need for several years... so I doubt they can build one to Hamilton
    Last edited by trader_jackson; 09-10-2015 at 01:14 PM.

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