Which way will the property market go now?

[Bjauck]

What is the stamp duty for then? It's expensive enough for people buying a home without a 'just because they can' tax?

It is expensive enough to buy food, clothing etc. even without paying GST.

[fungus pudding]

It is expensive enough to buy food, clothing etc. even without paying GST.

And depleting your spending money by taxing income doesn't help either. But GST and income tax are the systems that fund govt. expenditure. An extra 5% stamp duty on a house purchase simply sounds opportunist. What is it for if they do not fund their weird titles system?

[Bjauck]

And depleting your spending money by taxing income doesn't help either. But GST and income tax are the systems that fund govt. expenditure. An extra 5% stamp duty on a house purchase simply sounds opportunist. What is it for if they do not fund their weird titles system?

It is arbitrary to rely on those types of taxes. It warps the economy and investment decisions. It is logical to extend the tax base to include realised capital gains and those who buy land as well as those who buy goods and services. Maybe stamp duties and GST should be levied at the same rate?

it seems illogical not to tax those activities whilst taxing income from personal effort. How much does it warp decision making?

For those who push for a flat tax rate, would it be fair if all net capital gains and income were taxed at the same rate? In addition would it be fair if all land, goods and services purchases were taxed at the same flat rate?

If I were creating a tax system, I would contemplate having a receipts tax system. In other words, if a taxpayer receives an inheritance, income or capital gains, then they should be treated the same, accumulated and taxed at a flat rate (with a tax-free threshold.) That would mean taxpayer outgoings would not be taxed - so no GST or stamp duties.

[Aaron]

Hey FP you never answered my question. Always interested to hear your view.

I have already agreed denying interest deductibility on a specific investment is inconsistent and unfair, but if you are allowed to claim interest on a new build and the bright line test gets cut back to 5years instead of 10yrs for a new build, this is using policy to address the main issue which in your view is a lack of supply. Good idea? Bad idea? Discuss....

[fungus pudding]

Hey FP you never answered my question. Always interested to hear your view.

I have already agreed denying interest deductibility on a specific investment is inconsistent and unfair, but if you are allowed to claim interest on a new build and the bright line test gets cut back to 5years instead of 10yrs for a new build, this is using policy to address the main issue which in your view is a lack of supply. Isn't this a good idea to encourage building new houses?

The supply problem is largely a result of the RMA and planning regulations. Sort that out, and a free market will provide the necessary accomodation.

[Aaron]

The supply problem is largely a result of the RMA and planning regulations. Sort that out, and a free market will provide the necessary accomodation.

Labour is going to look at rejigging the RMA, I won't pretend to understand the RMA but along with encouraging landlords to actually build new houses Labour seems to be taking some positive steps to address the issue around house price rises don't you agree?

Although personally I think monetary policy is at the heart of the matter just trying to see if I can coax a positive response from you towards any Labour initiatives. I don't think it is possible but thought I would try.

[fungus pudding]

Labour is going to look at rejigging the RMA, I won't pretend to understand the RMA but along with encouraging landlords to actually build new houses Labour seems to be taking some positive steps to address the issue around house price rises don't you agree?

Duplicated reply.

[fungus pudding]

Labour is going to look at rejigging the RMA, I won't pretend to understand the RMA but along with encouraging landlords to actually build new houses Labour seems to be taking some positive steps to address the issue around house price rises don't you agree?

Although personally I think monetary policy is at the heart of the matter just trying to see if I can coax a positive response from you towards any Labour initiatives. I don't think it is possible but thought I would try.

No. I do not agree. The bright line test increase to ten years is fair enough, because as I have said, IRD have never been able to sucessfuly apply the intention policy, leaving the impossible situation of having to ask vendors if they sold for the monetary gain, or did they have another reason. You may recall the standard form with the little squares to tick that were sent out to every vendor of a property that had been rented out. But this will have little or no effect on prices. Taxing landlords' outgoings will make no difference to real estate prices either, except for an increase in rents as the rental pool dries up, but of course the offset is some tenants will become owners, even if that is not their preference. I'm not sure that investors will be encouraged to build new rental units. Too marginal at the best of times. I expect many will come to their senses and get into the far better investment - commercial or industrial. Along with the new 39% top tax rate I expect a to see a rise in the listed property trusts so investors can benefit from the 28% PIE tax rate. So overall the world will tick on - but Labour cerainly have not found the answer to rising house prices.
I gather from your last comment you think I am anti labour. I am not. I am anti-stupidity and stupid policies. I have voted for Labour at times, but at present I would not vote for either major party.

[Aaron]

I gather from your last comment you think I am anti labour. I am not. I am anti-stupidity and stupid policies. I have voted for Labour at times, but at present I would not vote for either major party.

Correct I was just being an ahole because I assumed it would cause you pain to ever admit anything Labour does was a good idea.

Time will tell if they are good ideas or not but it is a step further than just making noises such as asking the NZRB to consider house prices. They will probably have already lost the National swing voters with the latest policies so they might as well get rid of targeted inflation while they are about it. Personally I think that would be politically much easier and over the long term have a greater effect.

[SBQ]

Labour is going to look at rejigging the RMA, I won't pretend to understand the RMA but along with encouraging landlords to actually build new houses Labour seems to be taking some positive steps to address the issue around house price rises don't you agree?

Although personally I think monetary policy is at the heart of the matter just trying to see if I can coax a positive response from you towards any Labour initiatives. I don't think it is possible but thought I would try.

I sure hope the RMA gets a major makeover and will trend towards how the supply is made overseas. Today I was reading what Vancouver is doing ; converting corner lot petro stations into high density urban living:

https://dailyhive.com/vancouver/3668...couver-raphael

and if you have not noticed, the streets are grided and residential houses don't place high fencing around the front of their homes - this makes driving easier as it reduces the risk of accidents from cars backing out, children cycling too quick out of the driveways, etc.

I have the only empty lot where I live in a sub-division built 10 years ago. All plans to build 2 new houses fell through as some of the neighbours would not grant me a resource consent. Everyone asks me, "What are you going to do with that prime empty piece of land?" - I said hopefully one day, the NZ RMA may change and allow more effective / efficient building for me. It was not expected that we ended up buying the neighbouring house (and thus didn't need to build new).

Monetary policy isn't the key issue of the housing crisis as the NZ Reserve Bank follows similar criteria that overseas central banks follow (and where their housing prices have not seen no where near the rise NZ has experienced in the past 40 years). Kind of like which came 1st, the chicken or the egg example. Why are we blaming banks because they lend to wealthy landlords and property investment consortiums? - when the banks also need to service the 1st home buyers? Are you implying that if the banks didn't have the $ ; that these landlords wouldn't have the ability to leverage their investments? IMO, it's the behaviour of these wealthy people buying too many residential houses is the root problem just as Jacinda has outlined.

Like high powered sports cars - do we blame deaths caused because the cars are too powerful and fast or do we blame the drivers?