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  1. #1
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    Default $37 Million a week

    A multi-million-dollar subsidy flows each week to landlords around the country – and the amount handed over is growing quickly.

    But this isn’t the stream of private market capital gains, which deliver a serious windfall to property investors in years like the one we’ve just had. This is taxpayer money delivered from the Government.

    The accommodation supplement bill is increasing rapidly: The supplement cost just more than $37 million a week in the September 2020 quarter, up from $27.1m in the June 2018 quarter and is nearly twice what it was six years ago.

    https://i.stuff.co.nz/business/opini...-for-its-money

  2. #2
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    Here’s where you go to get information on getting government (taxpayer) money to help pay your mortgage or rent -

    https://www.workandincome.govt.nz/housing/live-in-home/index.html

    Here’s where you go to get information on how to get government (taxpayer) money to pay your house deposit or get a home loan -

    https://www.govt.nz/browse/housing-a...ur-first-home/

    Woohoo!! How good is the property market!! A river of government (taxpayer) money flows forth!!

  3. #3
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    Link for the free government (taxpayer) money for rent and mortgages here -

    https://www.workandincome.govt.nz/ho...ome/index.html

  4. #4
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    What a mess!

    Meanwhile Joe Bloggs is scratching their head wondering why the "property market fire" keeps getting wider, deeper, and BIGGER, and wondering where & when this will all end.

    It's akin to the forest arsonist actually being a firefighter from the local station. But not only that, this arsonist keeps throwing more fuel on the fire, all whilst supposedly "fighting the fire". Plus to add extra insult to injury, this arsonist is actually quietly taking that fuel from the town locals.

    Finally, to really rub ash in the wound, the firefighter-arsonist is interviewed by the local media. They comment that it is a "totally tragic situation" for the locals and that the Fire Department promises to fix ALL the forest fire problems in 2021. They also state that the authorities would step in, taxing all forest & fuel owners further, & put more regulations in place; basically disincentivize folk from investing in & owning these assets where the fires are being lit.

    Meanwhile The National Firefighters Union has announced that they will be investing further into the forestry market, buying & planting the most number of forests that they have since the 1970's.
    Last edited by FTG; 15-02-2021 at 03:47 PM.
    Success is a journey AND a destination!

  5. #5
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    The property looting scheme runs on hundreds of millions of government subsidies yearly, interest rates so low that money is being given away virtually for free, a steady stream of immigrants pouring in....and you look around and see the comments on-line, and it’s all put down to “it’s a lack of supply!!”

    Totally disingenuous of the populace of this country; they know exactly the reasons why the property market is in the state it is in, but none of them want their interest rates to go up or their supply of cheap credit to be cut off. None of them want the river of government subsidies to cease. But why not be honest about it? Why be so lacking in integrity that you can’t admit that all the government and Reserve Bank are doing is pouring can after can of petrol on the conflagration with their ultra-loose monetary and fiscal policies?
    Last edited by Logen Ninefingers; 31-01-2021 at 10:40 PM.

  6. #6
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    “Ooooeeeerr...it’s a lack of supply!!!!!”

    What a total crock / outright lie.

    —————

    https://www.interest.co.nz/property/...ers-are-rising

    More than a 1000 new homes a month were built in Auckland in the year to November and the numbers are rising

    30th Jan 21, 9:02am
    by Greg Ninness

    The number of new homes being built in Auckland continues to increase at a cracking pace.
    The latest figures from Auckland Council show that it issued 1581 Code Compliance Certificates for new dwellings in November last year, up 41% compared to November 2019.
    That brought the total number of new homes completed in Auckland to 12,054 in the 12 months to November, up 15% compared to the previous 12 months (see chart below for the monthly trend).

  7. #7
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    Average taxpayer subsidy to private sector renters and mortgagors via Accommodation Supplement - $100 pw. Average taxpayer subsidy for social housing via income related rent - $300 pw. Main reason the social housing waiting list is rocketing up. Plus the changes in the rental sector that discourage landlords from taking on or even keeping less than ideal tenants.

  8. #8
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    So Artemis, the $37m pw Logen Ninefingers points to above is that just for the private sector, or is that total?

    If just private sector then you are indicating the social housing cost would be running at about $110m pw. Crazy stuff if true....but surely not?
    Success is a journey AND a destination!

  9. #9
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    Quote Originally Posted by FTG View Post
    So Artemis, the $37m pw Logen Ninefingers points to above is that just for the private sector, or is that total?

    If just private sector then you are indicating the social housing cost would be running at about $110m pw. Crazy stuff if true....but surely not?
    The $37 mill a week is just the private sector Accommodation Supplement for 360,000 households, and does not include other housing related subsidies like TAS ($6 mill pw) and a bunch of other subsidies. Income related rent (social housing) is $21 million a week for 70,000 households. Sep 2020 numbers from HUD.

    Very expensive business!

  10. #10
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    Quote Originally Posted by Logen Ninefingers View Post
    A multi-million-dollar subsidy flows each week to landlords around the country – and the amount handed over is growing quickly.

    But this isn’t the stream of private market capital gains, which deliver a serious windfall to property investors in years like the one we’ve just had. This is taxpayer money delivered from the Government.

    The accommodation supplement bill is increasing rapidly: The supplement cost just more than $37 million a week in the September 2020 quarter, up from $27.1m in the June 2018 quarter and is nearly twice what it was six years ago.

    https://i.stuff.co.nz/business/opini...-for-its-money
    Real estate owners are the country's most entitled beneficiaries, through these indirect subsidies and the effect of taxation policies. This Labour Government will not change that, and will probably further exacerbate it.

    Owner-occupiers are effectively subisidised too of course. The net returns on their leveraged equity invested is not taxed. Neither capital gains nor net imputed rent are taxed.

    Other countries have had a incentivised pension scheme with tax concessions. For NZ it was leveraged real estate investment, whether owner-occupied or rental property ownership. Comparatively recently Kiwsaver was introduced - with a few grudging minimal concessions.
    Last edited by Bjauck; 01-02-2021 at 07:51 AM.

  11. #11
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    Thanks Artemis. Indeed, VERY expensive!

    Politicians handing out money like it's candy. A big money-go-around. Short term economics that effectively kick the can down the road, but eventually the can will smash into a solid concrete wall.
    Success is a journey AND a destination!

  12. #12
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    Quote Originally Posted by Bjauck View Post
    Real estate owners are the country's most entitled beneficiaries, through these indirect subsidies and the effect of taxation policies. This Labour Government will not change that, and will probably further exacerbate it...
    Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

    Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg.

  13. #13
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    Quote Originally Posted by artemis View Post
    Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

    Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg.
    With expectations of capital gains, it is shocking that landlords are prepared to pay such high prices for houses so that the gross rent they earn becomes a net loss after deductible expenses.

    If so many landlords never earn taxable income, what is the current position in relation to being able to continually deduct costs under existing tax rules? How man landlords are deemed to purchase with the intent to sell at a profit?

    In the past what has been the average length of ownership of a rental property? How many landlords have actually paid tax under the brightline rules? How much tax has been raised and what percentage of total net gains is it?

    Ardern confirmed that residential real estate is the priority investment class in NZ:

    "Put to her that people who invest in shares, for example, don’t always expect the value of that asset to go up, so why should it be different for housing? Ardern responded: “This gets to the heart of the issue of why so many New Zealanders turn to the housing market.”
    https://www.interest.co.nz/property/...-when-it-comes

  14. #14
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    Quote Originally Posted by artemis View Post
    Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

    Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg.
    Poor landlords. If the hassles become too much for them they can always sell a house or two that they bought in the 70’s, 80’s, or 90’s for comparative peanuts. The mega-millions they will make out of the current hot hot hot government / central bank run Ponzi housing ‘market’ should soothe some of the pain caused by the ‘hassles’.

    Why would you want to be a landlord when you can sell the house for mega-millions?

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    The nation used to go beserk at farmers over ‘subsidies’ in the 80’s, and ‘subsidies’ became a dirty word in the NZ lexicon. And now here is the government paying out $37 Million *every week* in subsidies. And the people they are paying them to are crying foul / poor. I think landlords should stand on their principles, and refuse government subsidies. But I guess ‘it’s only a rort if you aren’t part of it’.

  16. #16
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    Quote Originally Posted by Bjauck View Post
    With expectations of capital gains, it is shocking that landlords are prepared to pay such high prices for houses so that the gross rent they earn becomes a net loss after deductible expenses.....
    Because time passes, principal is paid down, rents rise, values usually rise. Break even point is reached, tax is paid.

    But strangely there is apparently a shortage of rentals.

  17. #17
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    Quote Originally Posted by Logen Ninefingers View Post
    Poor landlords. If the hassles become too much for them they can always sell a house or two that they bought in the 70’s, 80’s, or 90’s for comparative peanuts. The mega-millions they will make out of the current hot hot hot government / central bank run Ponzi housing ‘market’ should soothe some of the pain caused by the ‘hassles’.

    Why would you want to be a landlord when you can sell the house for mega-millions?
    Is there a rental shortage?

  18. #18
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    Quote Originally Posted by Logen Ninefingers View Post
    The nation used to go beserk at farmers over ‘subsidies’ in the 80’s, and ‘subsidies’ became a dirty word in the NZ lexicon. And now here is the government paying out $37 Million *every week* in subsidies. And the people they are paying them to are crying foul / poor. I think landlords should stand on their principles, and refuse government subsidies. But I guess ‘it’s only a rort if you aren’t part of it’.
    thing is the the landlords dont actually receive the govt subsides do they. It goes to the beneficiary who pays the rent. So yes landlords are benefitting but they cant refuse the subsidy.
    What it points to is that too many people dont earn enough to pay rent (whether they actually work or not). So that means benefits AND wages are too low to sustain this level of rent/price for property (without accom benefit)

    So we could stop the accom benefit and there would be massive homelessness until the landlords found new tenants who could pay. Note that if they couldnt find new tenants at the (accom benefit inflated) existing level they would be forced to lower their rents. But the govt will never ever do that. Well certainly not Labour. Just too disruptive.

    So yes we have inflated our property market by paying poor people enough to live in a rental. Weird that doing good does bad though. Unintended consequences!!!
    For clarity, nothing I say is advice....

  19. #19
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    Quote Originally Posted by artemis View Post
    Is there a rental shortage?
    Huh?

    Why be a landlord when you can cash out and make mega-millions!

  20. #20
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    Quote Originally Posted by peat View Post
    thing is the the landlords dont actually receive the govt subsides do they. It goes to the beneficiary who pays the rent. So yes landlords are benefitting but they cant refuse the subsidy.
    What it points to is that too many people dont earn enough to pay rent (whether they actually work or not). So that means benefits AND wages are too low to sustain this level of rent/price for property (without accom benefit)

    So we could stop the accom benefit and there would be massive homelessness until the landlords found new tenants who could pay. Note that if they couldnt find new tenants at the (accom benefit inflated) existing level they would be forced to lower their rents. But the govt will never ever do that. Well certainly not Labour. Just too disruptive.

    So yes we have inflated our property market by paying poor people enough to live in a rental. Weird that doing good does bad though. Unintended consequences!!!
    Hey, they are not all ‘poor people’.
    The rents people are now being asked to pay are extraordinary. We should not just dismiss anyone struggling to pay these rents as a ‘poor person’.
    Often these are young professionals who now have no hope of ever owning a property - unless Labour increases the taxpayer paid deposit grant (subsidy) to ‘get them on the ladder’. And Labour will!

    When should a government subsidy ever be paid to someone struggling to pay their MORTGAGE!?! Don’t take on a mortgage if you can’t pay it!! We are now allowing people to make bad bets and then bailing them out. Slashing interest rates if it looks like property prices will fall - this is another bail-out.

    I hate what successive governments and the central bank have done. They have created a too big to fail bubble that they rapidly inflate further every time it teeters. They’ve totally ****ed up our country.

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