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  1. #1426
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    Quote Originally Posted by Joshuatree View Post
    We are shifting away from a inflated price housing mkt
    At present that seems to be simple market forces. Lets put aside the suppression of our ability to find innovative sales solutions to our private property sales by banning foreign buyers
    Quote Originally Posted by Joshuatree View Post
    and immigration dependence
    To get work these foreigners need to show there are no skilled or trainable NZ'ers. Other than the ones on Student Visas - coming from one of our largest export industries.
    Quote Originally Posted by Joshuatree View Post
    to innovation and new ideas to export with our commodities.
    I might have missed them but where are the R&D tax breaks are innovative incubator grants - other than to US companies

    Quote Originally Posted by Joshuatree View Post
    ps i thought the martin jetpack was a grotesque joke promoted by a full blown narcissist but thats just my opinion.
    No disagreement from me there

  2. #1427
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    Quote Originally Posted by BlackPeter View Post
    I just said that high home ownership rate is not necessarily something desirable and the provided stats does support this.
    The policies and environment in each country do vary. In Germany I believe the banks require large deposits so that means there has been less leveraged capital gains for owners. German banks presumably have therefore lent a greater percentage of their loan book to business.

    In NZ owner occupation and private investment in rental housing has been tax effective and beneficial providing a greater leveraged tax-free capital gains for those who can afford to be owners.

    Re tax - efficiency: I don't know the Swiss tax rules, but your first owner occupied home in Germany (with a lower home ownership - rate than NZ) is much more tax efficient than a house in NZ ever will be - in Germany you can even write off parts of your purchase price from your other income.
    I believe property tax is based on value and can be 2% or more of the house value in big cities. Is that correct?

    ... On the other hand - most of the tenants in Germany or Switzerland would look anyway much better after their rental property than they would do here.

    Some things go both ways - and I don't think its all about laws, this is about culture and respect for other peoples property.
    Post-war I think there was a big push to quickly replace and provide housing. Both private and public housing was built with help from the German government. There was not the same stigma as in NZ attached to renting. With rent control and other tenancy protections and rights many people were happy to continue to remain as renters. In NZ those who could afford to buy could access the leveraged capital gains and greater security and not be beholden to unregulated rents and a looser rental market.

  3. #1428
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    Quote Originally Posted by Bjauck View Post
    The policies and environment in each country do vary. In Germany I believe the banks require large deposits so that means there has been less leveraged capital gains for owners. German banks presumably have therefore lent a greater percentage of their loan book to business.

    In NZ owner occupation and private investment in rental housing has been tax effective and beneficial providing a greater leveraged tax-free capital gains for those who can afford to be owners.

    I believe property tax is based on value and can be 2% or more of the house value in big cities. Is that correct?

    Post-war I think there was a big push to quickly replace and provide housing. Both private and public housing was built with help from the German government. There was not the same stigma as in NZ attached to renting. With rent control and other tenancy protections and rights many people were happy to continue to remain as renters. In NZ those who could afford to buy could access the leveraged capital gains and greater security and not be beholden to unregulated rents and a looser rental market.
    Not sure where this is supposed to lead ... absolutely - things are different in different countries. Still does not mean that a high home ownership rate is good or desirable in itself.

    Your information re "property tax" in Germany is wrong. First - it is no "property tax", but a tax on real estate (comparable to the NZ rates). The way it is calculated is admittedly quite complicated and not fair to home owners depending on where they live. It is calculated based on the value of the property in 1964 (if the property is in the Western parts of Germany or 1935 if its in the East) and this number is multiplied by a factor defined by the district / town and another defined by the country. However - even in one example where this tax is considered as very high (check attached link, just brush up your German) would it be an annual rate of Euro 456 for a property which in 1964 would have had a value of Euro 40.000 (and which now might be worth Euro 200.000 or more).

    https://www.sueddeutsche.de/wirtscha...land-1.3942988

    I.e. even if people live in areas where the rate is considered to be really expensive it is unlikely to be much more than 0.2% of the current property value per year (or one percent of the 1964 value) - not two percent of present value.

    But we better talk about the performance of the current NZ government and New Zealand (as per thread title) ... and lets face it - they promised to build plenty of houses and solve the housing crisis they talked up, but so far I don't see them delivering. Killing the construction industry, increasing everybody's wages (significant part of building costs) and diverting with all their xenophobic measures suitable construction workers as well as investors to other countries is hardly a constructive contribution to solve the problem. Most immigrants got by now that NZ under this government is not the right choice for them and vote with their feet, even if immigration service might still stamp that phrase "NZ the right choice" onto their more and more expensive visas.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  4. #1429
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    Quote Originally Posted by BlackPeter View Post
    Not sure where this is supposed to lead ... absolutely - things are different in different countries. Still does not mean that a high home ownership rate is good or desirable in itself....
    I agree it is not in itself desirable. However in NZ Home ownership is desirable as for many decades it has been the de facto retirement plan for those who have been able to afford to own real estate. The poorer have been increasingly shut out of home ownership. Until the modest pension scheme that is kiwisaver there was little to match the tax effective returns as could be earned from leveraged home ownership and investment property ownership. So to make home ownership less desirable would necessitate policy changes in several areas.

    It takes a while to tackle the problem of a failing housing and accommodation market (especially in Auckland) that is the result of inaction by previous National and Labour governments. With a housing market open to overseas investors and with Auckland's population suging, there have been winners and losers. There are landowners who have had windfall capital gains as a result; younger and poorer Aucklanders have increasingly been shut out of home ownership - resulting in many having to remain tied to Aucklands rental market with NZ rental conditions.

    The non-resident foreign buyer ban is a first step. When the housing and accommodation markets have been sorted out for residents, the ban on purchasing existing housing stock could be lifted by a future goernment. Australia has restrictions on non-resident purchases of existing residences. British Columbia currently has a non-resident purchase tax I believe. Some Asian countries have non-resident restrictions too.

    The Housing market, international comparisons and the current government's approach I think are pertinent to this thread.
    Last edited by Bjauck; 18-08-2018 at 07:22 PM.

  5. #1430
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    Quote Originally Posted by Bjauck View Post
    ..... Until the modest pension scheme that is kiwisaver there was little to match the tax effective returns as could be earned from leveraged home ownership and investment property ownership. So to make home ownership less desirable would necessitate policy changes in several areas.....
    You may like to mention this to IRD as they seem to think that property investment does not have a tax advantage over other investments. Well so they have said numerous times.

    In fact residential rental property is actually disadvantaged compared to other investments, including commercial property, since building depreciation was removed as an expense.

    And no good saying, well, leveraged. Plenty of leveraged investments around that are not property based.

  6. #1431
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    Quote Originally Posted by artemis View Post
    You may like to mention this to IRD as they seem to think that property investment does not have a tax advantage over other investments. Well so they have said numerous times.

    In fact residential rental property is actually disadvantaged compared to other investments, including commercial property, since building depreciation was removed as an expense.

    And no good saying, well, leveraged. Plenty of leveraged investments around that are not property based.
    Owner occupied residential property is the biggest investment many NZ households, who can afford to buy it, have. It is a separate class. The benefits of ownership - imputed rent - is not taxable.
    https://www.businessinsider.com.au/i...16-9?r=US&IR=T

    Perhaps they refer to the general tax rules, which are the same. In NZ, can you borrow the same percent of business valuation as you could from real estate valuation? In practice how many people could borrow the same amount of credit on a portfolio of shares as they could against real estate valued at the same amount? Hence the ability to leverage untaxed capital gains from NZ residential property, whilst being able to deduct the interest from taxable income (in the case of investor rental property).
    Last edited by Bjauck; Yesterday at 09:16 AM.

  7. #1432
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    Quote Originally Posted by Bjauck View Post
    Perhaps they refer to the general tax rules, which are the same. In NZ, can you borrow the same percent of business valuation as you could from real estate valuation? In practice how many people could borrow the same amount of credit on a portfolio of shares as they could against real estate valued at the same amount? Hence the ability to leverage untaxed capital gains from NZ residential property, whilst being able to deduct the interest from taxable income (in the case of investor rental property).
    Shares are not the only investment that can be leveraged. Plenty of secured and unsecured loans made every day.

    And the general tax rules are not the same, they disadvantage - building depreciation as mentioned, bright line rules, residential property restrictions on overseas buyers.

  8. #1433
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    Quote Originally Posted by artemis View Post
    Shares are not the only investment that can be leveraged. Plenty of secured and unsecured loans made every day.


    And the general tax rules are not the same, they disadvantage - building depreciation as mentioned, bright line rules, residential property restrictions on overseas buyers.
    General rules. As this is sharetrader, I was using shares as an example vis a vis real estate.


    For that matter dividends are not the same as rents. Demergers and take-overs need court rulings to stop a shareholder being taxed on the capital value of their investment, which otherwise could be deemed to be a dividend! Also a NZ resident can be taxed on unrealised capital appreciation of their overseas shareholdings under the FIF rules. Specific rules vary for each investment type.


    Average NZ dividend yield is higher than the average rent yield especially in Auckland....


    So, NZ capital is pumped into expensive residential land with the result that NZ dividend yields are high and for want of NZ investors, good NZ companies often need to relocate overseas or risk being swallowed up by overseas purchasers.


    The NZ share market is tiny for the size of the economy.
    Last edited by Bjauck; Yesterday at 11:54 AM.

  9. #1434
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    Prime Minister Jacinda Ardern has announced plans to freeze the salaries of MPs while a review of the pay-setting system is carried out. (Nz Herald)

    Hope the pay setting system recommends a big pay cut

    Jacinda must be worried about the polls .....taking such drastic action.

    This will give the populous the warm fuzzies ....won’t it?
    With so many bulls around these days you can expect a lot of bulls#@t

  10. #1435
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    Great stuff ,3% rise due. 2.5% last year. WTF should they get this year after year making the gap wider. School teachers for ex used to get the same pay in the 60's 70's and have been totally left behind hence a first strike in 24 years. Being cynical/sarcastic fits you like a glove w69. Guess we need some in the politics game
    Last edited by Joshuatree; Yesterday at 06:50 PM.

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