RYM - Ryman Healthcare

[Waltzing]

"accountant for just over 40 years and I have never seen anything anywhere near as egregiously unreasonable before."

Surely it tells investors that they can not assume that principles of accounting for capital can be relied upon when investing for the long term.

Imagine if that new precedence is extended to other sectors of industry.

A revolt to on going foreign investment that could cripple growth in an economy without higher rates of interest charged on capital to maintain it.

[Beagle]

I think overseas investors are very wary of this Government and who can blame them. It would seem almost anything is possible if it fits their extremist views of socialist or restorative justice which is why I am so wary of the pending review of this sector. The whole methodology of how the gains on occupation right agreements can be resold tax free comes under the financial arrangements provisions of the Income tax act wherein people lend a company some money interest free in exchange for a license to occupy and companies can resell those licenses to occupy for more money later on and the gains are tax free. One stroke of the pen to amend this "loophole" as Cindy and her mates like to call it and retirement villages will be paying their "fair share" and the vast majority of Labour supporters would be thinking, good job, about time that loophole for greedy capitalists was fixed.

If they can legislate to overturn such a basic principle as interest deductibility and deny people the right to claim mortgage interest on rental properties which has stood the test of time longer than I can remember then fixing this so called "retirement village loophole" is a very real and present danger. This key "socialism" risk and the real estate market falling like a stone together with the egregious deliberate underfunding choking the life out of care services are the three key reasons I am out of this sector completely and I may stay on the sidelines for quite some time. In my experience when the tide goes all boats fall with it and the tide does not change direction quickly. None are paying a yield anywhere near high enough to provide any meaningful counterbalance to the obvious and very serious risks.

[couta1]

I think overseas investors are very wary of this Government and who can blame them. It would seem almost anything is possible if it fits their extremist views of socialist or restorative justice which is why I am so wary of the pending review of this sector. The whole methodology of how the gains on occupation right agreements can be resold tax free comes under the financial arrangements provisions of the Income tax act wherein people lend a company some money interest free in exchange for a license to occupy and companies can resell those licenses to occupy for more money later on and the gains are tax free. One stroke of the pen to amend this "loophole" as Cindy and her mates like to call it and retirement villages will be paying their "fair share" and the vast majority of Labour supporters would be thinking, good job, about time that loophole for greedy capitalists was fixed.

If they can legislate to overturn such a basic principle as interest deductibility and deny people the right to claim mortgage interest on rental properties which has stood the test of time longer than I can remember then fixing this so called "retirement village loophole" is a very real and present danger. This key "socialism" risk and the real estate market falling like a stone together with the egregious deliberate underfunding choking the life out of care services are the three key reasons I am out of this sector completely and I may stay on the sidelines for quite some time. In my experience when the tide goes all boats fall with it and the tide does not change direction quickly. None are paying a yield anywhere near high enough to provide any meaningful counterbalance to the obvious and very serious risks.

Costs will always be passed onto the end user at the end of the day, if the gains suddenly become taxable then you just crank up the purchase price to compensate along with increased service fees to boot. If the Govt continue to severely underfund the sector then you just reduce the size of the care operation and pass the problem to the Govt to deal with (Wonder how they would cope with thousands of homeless hospital level elderly on their doorstep)

[Waltzing]

Clement Attlee socialism is here and where as UK housing needed rebuilding after the war the labour governments of the UK got carried away and tossed the baby out with the bath water..

wait till the greens demand that land taxes apply and all those revaluation on P&L account must be Taxed at some rate.

The accounting working papers for these companies and every other company that has property of any kind will mean there will be a shortage of Accountants!!!


https://www.newyorker.com/news/daily...or-these-times



A game where the goal post's can be moved at any time.

[Biscuit]

I've been an accountant for just over 40 years and I have never seen anything anywhere near as egregiously unreasonable before.

It could be worse, if the Greens had their way, we would now have rent control.

[Beagle]

Costs will always be passed onto the end user at the end of the day, if the gains suddenly become taxable then you just crank up the purchase price to compensate along with increased service fees to boot. If the Govt continue to severely underfund the sector then you just reduce the size of the care operation and pass the problem to the Govt to deal with (Wonder how they would cope with thousands of homeless hospital level elderly on their doorstep)

All good in theory but you can't magically transform care beds into ILU units and interestingly I noted that RYM's average price for an independent living unit in Auckland is already $1.4m ! They creatively try and show that this is less than the cost of the houses in the suburbs their villages are in but there is very little headroom to come and go on and RYM's units are generally, already very expensive. They have to do this because they only take 20% DMF fees as you know and try and have cheap weekly fees.

Any way you slice and dice it the radical activists that are after socialist and restorative justice are on the rampage in Wellington and there's no chance to get rid of them until Nov 2023. Scorched earth as you put it a while back is a genuine worry.

[Beagle]

It could be worse, if the Greens had their way, we would now have rent control.

That's a different subject but looking at all the recent changes to the Tenancy Act and tenants new rights this sector is now very, very tightly controlled.
I wouldn't want to be a residential landlord in the current environment.

[couta1]

All good in theory but you can't magically transform care beds into ILU units and interestingly I noted that RYM's average price for an independent living unit in Auckland is already $1.4m ! They creatively try and show that this is less than the cost of the houses in the suburbs their villages are in but there is very little headroom to come and go on and RYM's units are generally, already very expensive. They have to do this because they only take 20% DMF fees as you know and try and have cheap weekly fees.

Any way you slice and dice it the radical activists that are after socialist and restorative justice are on the rampage in Wellington and there's no chance to get rid of them until Nov 2023. Scorched earth is the worry....

You don't have to transform them for quite some time, just shut down the hospital section and pass the hot potato to the Govt (Hospital side of the business is not making any money anyway) Your last paragraph is unfortunately right on the mark. (It actually makes me really angry that this Govt have no heart or concern for the aged care sector as evidenced by the latest budget)

[Biscuit]

That's a different subject but looking at all the recent changes to the Tenancy Act and tenants new rights this sector is now very, very tightly controlled.
I wouldn't want to be a residential landlord in the current environment.

Yes, you have to be very selective of tenants. I sometimes wonder why I still do it, but it is another form of diversification.

[BlackPeter]

Anybody could point me to the Ryman thread?