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  1. #251
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    https://www.interest.co.nz/opinion/1...sing-continues

    All talk and no substance.

    All spin and no delivery.

    That is Cindy - running out of excuses, and spin.

    “The current housing debate has a pathetic sense of déjà vu about it. Before the 2017 election Labour successfully hyped the then housing situation into a crisis and implied it had all the answers if elected to government.

    But now, one term of Labour-led government later, the situation is worse than ever. Housing prices have sky-rocketed, nowhere near enough houses are being built, and waiting lists for public housing have soared. And the responsibility for this deteriorating situation apparently lies with everyone else.”
    Last edited by Balance; 23-11-2020 at 08:36 AM.

  2. #252
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    Quote Originally Posted by dobby41 View Post
    For a owner-occupier the gain is largely irrelevant when the realise the gain (sell) as they will probably buy another house at a similarly inflated price.
    If you have more than one property then you are onto a winner.
    A fast rising market, tends to make progressing up the property ladder more difficult too?

    It becomes particularly relevant when the home owner sells their last residence and decides to invest elsewhere or pass their assets to beneficiaries they have selected. Then bias of the tax system becomes entrenched.

    It is an arbitrary distinction to tax gains from capital more leniently than gains from personal effort and other income. It is political expediency (currently anyway) and also an arbitrary distinction to treat financial equity (and annual benefit derived therefrom) in owner occupied housing differently from financial equity in taxable income producing assets. With the pricing of land currently, It boils down to an implicit government benefit for the wealthier.

  3. #253
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    Quote Originally Posted by Bjauck View Post
    A fast rising market, tends to make progressing up the property ladder more difficult too?
    Not sure if that is a question or not but you are correct - it does make it more difficult.
    By way of example, if your house was worth $500k and the house you aspired to was $700k you'd need an extra $200k to bridge the gap.
    If all houses doubled in value you'd now need $400k to bridge the gap.

    It becomes particularly relevant when the home owner sells their last residence and decides to invest elsewhere or pass their assets to beneficiaries they have selected. Then bias of the tax system becomes entrenched.

    It is an arbitrary distinction to tax gains from capital more leniently than gains from personal effort and other income. It is political expediency (currently anyway) and also an arbitrary distinction to treat financial equity (and annual benefit derived therefrom) in owner occupied housing differently from financial equity in taxable income producing assets. With the pricing of land currently, It boils down to an implicit government benefit for the wealthier.
    Generally most people sell their last residence AFTER they die but I agree with the rest of what you suggest.
    I can live quite happily off the capital gain and pay no tax - sell a bit at a time (obviously the assets aren't property).

  4. #254
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    Quote Originally Posted by dobby41 View Post
    ...Generally most people sell their last residence AFTER they die but I agree with the rest of what you suggest.
    I can live quite happily off the capital gain and pay no tax - sell a bit at a time (obviously the assets aren't property).
    Yep, the executors act on the deceased's orders. So it may be your last sale - unless you had already sold up to buy an ORA in a retirement village! Some emigrants also sell their last NZ residence prior to migrating with their gains.

    Reverse mortgages are also an option for releasing equity for those who overcapitalise their main residence for tax efficiency.

  5. #255
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    https://www.interest.co.nz/opinion/1...ly-thing-do-so

    Mahuta’s first foray into foreign affairs - siding with a declining empire to offend our biggest trading partner.

    Good one!

  6. #256
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    Quote Originally Posted by Bjauck View Post
    Yep, the executors act on the deceased's orders. So it may be your last sale - unless you had already sold up to buy an ORA in a retirement village! Some emigrants also sell their last NZ residence prior to migrating with their gains.

    Reverse mortgages are also an option for releasing equity for those who overcapitalise their main residence for tax efficiency.
    What does 'overcapitalise their main residence for tax efficiency' mean, and how can I do it?

  7. #257
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    Quote Originally Posted by fungus pudding View Post
    What does 'overcapitalise their main residence for tax efficiency' mean, and how can I do it?
    Buying as expensive a main residence as you (think you) can afford - including raiding Kiwisaver (for first home buyers), getting stonking mortgages at many multiples of income, diverting income that may have gone into a financial pension fund into payments for a house.

    The reasons seem obvious with respect to the owner occupied main residence. Capital gains (often/usually leveraged too) and imputed annual net rent are tax free. These are politically untouchable. Whereas financial pension funds face annual income tax charges, and cannot be leveraged to boost capital gains. Taxable income also seems to be fair game for being taxed harder to fund covid and other expenses - so that untaxed annual benefit of home ownership will look increasingly appealing.

    So worth pouring as much as possible into your house, after all you could always downsize or reverse mortgage in retirement?

    In the meantime those, who are priced out of home ownership and have a term deposit in the bank earning way below the inflation rate, are taxed on that puny return.
    Last edited by Bjauck; 25-11-2020 at 07:49 AM.

  8. #258
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    Quote Originally Posted by Bjauck View Post
    Buying as expensive a main residence as you (think you) can afford - including raiding Kiwisaver (for first home buyers), getting stonking mortgages at many multiples of income, diverting income that may have gone into a financial pension fund into payments for a house.

    The reasons seem obvious with respect to the owner occupied main residence. Capital gains (often/usually leveraged too) and imputed annual net rent are tax free. These are politically untouchable. Whereas financial pension funds face annual income tax charges, and cannot be leveraged to boost capital gains. Taxable income also seems to be fair game for being taxed harder to fund covid and other expenses - so that untaxed annual benefit of home ownership will look increasingly appealing.

    So worth pouring as much as possible into your house, after all you could always downsize or reverse mortgage in retirement?
    Yes. Thanks. Sounds great; think I'll do that.

  9. #259
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    Quote Originally Posted by Bjauck View Post
    In the meantime those, who are priced out of home ownership and have a term deposit in the bank earning way below the inflation rate, are taxed on that puny return.
    Also in the meantime, upgrading own home delivers a nicer place to live. Maybe much much nicer.

  10. #260
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    Quote Originally Posted by artemis View Post
    Also in the meantime, upgrading own home delivers a nicer place to live. Maybe much much nicer.
    If you can afford it that is true. A rapidly rising market can also stymie many homeowners who want to upgrade or get a larger house.

    Compared to other OECD countries, NZ houses tend to be less insulated, less double glazed, less likely to have a central heating/air conditioning*. So residential real estate is very expensive for what you get...in my opinion.

    * in my opinion. Are there any OECD studies available?
    Last edited by Bjauck; 25-11-2020 at 10:19 AM.

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