Labour / NZ First Government

[Jay]

Maybe ez, however again as an example if there are "traders" on trademe not declaring there "income" (surely not) then the Govt of the day via IRD needs to monitor it better and catch them. Might be cheaper than trying implement a bunch of new taxes
As I said it comes down to making a line in the sand, if you sell an asset within X timeframe your deemed a "trader" and pay tax accordingly, if there is a capital gain, i.e. income, even your own home, I knew of someone during the last property boom(before this one) moving house 3-4 times inside 2 years, , - didn't like the area after all or didn't like the house after all etc -

each time banking a large profit and moving up or sideways and keeping the cash.

Anyway not sure new taxes are needed , just close/tighten some of the loopholes - as has been discussed here previously, when are you deemed a trader (buying/selling shares) , there is no hard and fast answer, these are the types of rules that need attention not a bunch of new taxes, successive governments have talked about from time to time from memory

[elZorro]

Maybe ez, however again as an example if there are "traders" on trademe not declaring there "income" (surely not) then the Govt of the day via IRD needs to monitor it better and catch them. Might be cheaper than trying implement a bunch of new taxes
As I said it comes down to making a line in the sand, if you sell an asset within X timeframe your deemed a "trader" and pay tax accordingly, if there is a capital gain, i.e. income, even your own home, I knew of someone during the last property boom(before this one) moving house 3-4 times inside 2 years, , - didn't like the area after all or didn't like the house after all etc -

each time banking a large profit and moving up or sideways and keeping the cash.

Anyway not sure new taxes are needed , just close/tighten some of the loopholes - as has been discussed here previously, when are you deemed a trader (buying/selling shares) , there is no hard and fast answer, these are the types of rules that need attention not a bunch of new taxes, successive governments have talked about from time to time from memory

Yes, the loopholes are a mile wide on traders really. I have noticed that not many new (low cost) items bought on Trademe ever come with a tax invoice. Not to mention the traffic of goods sold through facebook. I just about fell over talking to an energetic older Labour Party member three years ago, he has bought and tidied up a cluster of rentals and had a lot of trouble getting a good tenant for one of them. So he sold it, well within the current brightline test interval. He had his solicitor write a letter to IRD, about how it was his intention to keep the property as an investment, that it didn't work out. He'd have received a capital gain, no tax to pay on it. Needless to say, he wasn't that keen on a CGT if it was going to apply to him, either.

So IRD are pretty powerless when an owner-occupier sells frequently, usually after doing up the house. A simple CGT levy at the point of each sale would stop that, but of course catch out all homeowners too, it's not politically acceptable. There is still a big difference in that sort of activity: to keep under the radar, frequent house/dwelling flippers can't claim their costs/interest against income, and in some cases I'm certain they spend more than they get back, even ignoring the value of their labour. So maybe they've done the country a service by upgrading housing stock at, or below, cost.

Even then, I know of a couple of enterprising brothers who started flipping properties a few years ago, that was going great guns until IRD spotted it, and their enthusiasm for the activity dropped away after that was resolved.

I think the real money in property is usually made by the smart investors holding onto rentals for a long period of time, ensuring upkeep costs are low and waiting for land values to go up while using the steadily rising rental income and inflation to pay off their investment for them. Like any business person that eventually has to sell, or decides to sell, that's when the real value of the enterprise starts to show, that's when the tax should be levied as a CGT.

[artemis]

IRD spends a lot of money and effort on compliance, including smart systems and access to a lot of data. IRD have also required purchase info from real estate agents in the past, not sure if they still do. Property has been a key compliance area for several years.

A few years ago IRD brought a court case against a family that bought, moved in, sold, repeated. Court agreed that the family were traders and liable for income tax.

[winner69]

Was giving Jacinda time to prove she was the real deal but now getting the feeling she isn’t.

I liked this comment I came across - Jacinda Ardern of course slogans all the pre election bribes as aspirational and not necessarily achievable. The term “White man speaks with forked tongue” would be an appropriate description of Jacinda Ardern’s ability to make quick slogans and communicate that to the general public as positive.

Texans call it all hat and no cattle

[elZorro]

IRD spends a lot of money and effort on compliance, including smart systems and access to a lot of data. IRD have also required purchase info from real estate agents in the past, not sure if they still do. Property has been a key compliance area for several years.

A few years ago IRD brought a court case against a family that bought, moved in, sold, repeated. Court agreed that the family were traders and liable for income tax.

But that only reinforces the argument for a CGT, Artemis. If that family were levied income tax on their house flipping, then presumably a CGT wouldn't also apply. But to catch the untaxed income from longer-term property holdings and the like, the only practical way is to levy a low-rate CGT at the time of each sale.

[fungus pudding]

But that only reinforces the argument for a CGT, Artemis. If that family were levied income tax on their house flipping, then presumably a CGT wouldn't also apply. But to catch the untaxed income from longer-term property holdings and the like, the only practical way is to levy a low-rate CGT at the time of each sale.

It actually reinforces the argument to include all property in a CGT, including the prime residence. Or better still - exempt all property from CGT, thereby avoiding all the negative unintended consequences, of which there are many.

[winner69]

Was giving Jacinda time to prove she was the real deal but now getting the feeling she isn’t.

I liked this comment I came across - Jacinda Ardern of course slogans all the pre election bribes as aspirational and not necessarily achievable. The term “White man speaks with forked tongue” would be an appropriate description of Jacinda Ardern’s ability to make quick slogans and communicate that to the general public as positive.

Texans call it all hat and no cattle

Mind you she pretty clever at smiling her way through telling the petitioners that want to ban off shore drilling and telling them I’m committed but just give us a bit more time and then a few hours later subtly telling the oil industry that won’t happen for some time.

[blackcap]

Mind you she pretty clever at smiling her way through telling the petitioners that want to ban off shore drilling and telling them I’m committed but just give us a bit more time and then a few hours later subtly telling the oil industry that won’t happen for some time.

That Cindy is one of the most duplicitous people I have ever come across. Though she really is caught between a rock and a hard place with the COL agreement. On one side, Winston and the oil and mining (regional development) and fishing (Talleys) people, the other the Greens who are anti anything NZF is. Gotta be a tough gig.

[Zaphod]

It actually reinforces the argument to include all property in a CGT, including the prime residence. Or better still - exempt all property from CGT, thereby avoiding all the negative unintended consequences, of which there are many.

I completely agree Fungus. Without a uniform approach to CGT it simply will not work as intended.

That comment however should not be taken as my support for implementing CGT, because I don't.

[Zaphod]

That Cindy is one of the most duplicitous people I have ever come across. Though she really is caught between a rock and a hard place with the COL agreement. On one side, Winston and the oil and mining (regional development) and fishing (Talleys) people, the other the Greens who are anti anything NZF is. Gotta be a tough gig.

I think NZFirst would be apoplectic over a ban on new oil & gas exploration as it runs contrary to their regional investment goals.