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  1. #11
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    I am a renter - and have no intention of ever living in my own 'home'. Which is not to say I will not own property at all, I am currently looking for investment property opportunities - though am still disappointed by the yields that are on offer. But that decision is more a desire to diversify my overall portfolio of investments, than any eagerness to get into property investment.

    My decision to rent is both financial (I prefer to live in areas where owning doesn't stake up - my weekly rent is considerably less than what the weekly cost of buying would be) and non-financial. I like the relative freedom of renting - it is relatively easy for me to up and move somewhere else (and have done so). I also like to live a lifestyle free of the burden of significant mortgage repayment costs or tieing up my equity into a single investment.

    So not surprisingly, I do find Macdunk's comments somewhat condescending - not that I mind/care. I find NZer's unbending belief in property ownership amusing, as well as lacking of any imagination - but I do not begrudge anyone's desire to own their own 'home'. Though I am often in disbelief at the price some people are willing to pay to obtain this.

    I just do not have any emotional attachment to own a few bricks topped with a few tiles. However, contrary to Macdunk's opening post, along with having various equity investments, I am also involved with a start-up company, as well as holding down the "day job". I would think this is more enterprising than most property owners. Maybe of concern to us renters is that many property owners become a "burden on the community" as they find they have over-extended themselves to obtain the "kiwi dream".

    I love the debate though.
    If I am not for myself, then who will be for me? And if I am only for myself, what am I? And if not now, when?

  2. #12
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    I am slightly bemused by the way this thread has become to rent or not. I would have thought that all things being roughly equal, that someone would have pointed out that it is clearly beneficial, taxwise, that if you owned property, that you should rent it out, and then rent oneself.
    This way one gets all the tax benefits of owning a rental property, eg depreciation, interest costs, home office, car, etc etc, and one can live in an upmarket property that one could never afford if one took into account things like rates, interest, and maybe body corp fees if it was say, an apartment. All the time being in a position to get capital appreciation if it occurred.
    Normally I am prepared to listen to another side of most arguments, perhaps excluding dopey religious ones, but to me, this particular discusion is a no brainer.
    Forgive me in advance if it is the wine talking, but I have never understood arguments to the contrary, except that women want a nest that they can call their own.

  3. #13
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    Quote Originally Posted by stanace View Post
    I am slightly bemused by the way this thread has become to rent or not. I would have thought that all things being roughly equal, that someone would have pointed out that it is clearly beneficial, taxwise, that if you owned property, that you should rent it out, and then rent oneself.
    This way one gets all the tax benefits of owning a rental property, eg depreciation, interest costs, home office, car, etc etc, and one can live in an upmarket property that one could never afford if one took into account things like rates, interest, and maybe body corp fees if it was say, an apartment. All the time being in a position to get capital appreciation if it occurred.
    Normally I am prepared to listen to another side of most arguments, perhaps excluding dopey religious ones, but to me, this particular discusion is a no brainer.
    Forgive me in advance if it is the wine talking, but I have never understood arguments to the contrary, except that women want a nest that they can call their own.
    I'll second all that (though I've got a big hoppy IPA and not a wine in my hand)
    If I am not for myself, then who will be for me? And if I am only for myself, what am I? And if not now, when?

  4. #14
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    You guys prove my points I think - you can do all that IF you
    have the required financial education - most people do not and
    theoretically would be better to lock their hard earned in bricks
    and tiles rather than fritter it away as most surely do.

  5. #15
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    Quote Originally Posted by stanace View Post
    I am slightly bemused by the way this thread has become to rent or not. I would have thought that all things being roughly equal, that someone would have pointed out that it is clearly beneficial, taxwise, that if you owned property, that you should rent it out, and then rent oneself.
    This way one gets all the tax benefits of owning a rental property, eg depreciation, interest costs, home office, car, etc etc, and one can live in an upmarket property that one could never afford if one took into account things like rates, interest, and maybe body corp fees if it was say, an apartment. All the time being in a position to get capital appreciation if it occurred.
    Normally I am prepared to listen to another side of most arguments, perhaps excluding dopey religious ones, but to me, this particular discusion is a no brainer.
    Forgive me in advance if it is the wine talking, but I have never understood arguments to the contrary, except that women want a nest that they can call their own.
    You're right - upmarket properties are not worth owning as the rental always represents a bargain for the tenant. So own 3 dunger rentals and live in a palace, but only if living in a palace is important to you. But you need to have a reason in case the taxman asks why you're doing it. The laws of income tax state that any action taken for the sole purpose of avoiding tax (a scheme) can be overturned by the IRD.

  6. #16
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    Quote Originally Posted by George View Post
    You guys prove my points I think - you can do all that IF you
    have the required financial education - most people do not and
    theoretically would be better to lock their hard earned in bricks
    and tiles rather than fritter it away as most surely do.
    I love frittering it away - it's fun. Can never understand the appeal of spending weekends and holidays "doing up the house".

    Each to their own...
    If I am not for myself, then who will be for me? And if I am only for myself, what am I? And if not now, when?

  7. #17
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    Quote Originally Posted by funguspudding View Post
    You're right - upmarket properties are not worth owning as the rental always represents a bargain for the tenant. So own 3 dunger rentals and live in a palace, but only if living in a palace is important to you. But you need to have a reason in case the taxman asks why you're doing it. The laws of income tax state that any action taken for the sole purpose of avoiding tax (a scheme) can be overturned by the IRD.
    There is no tax rule that says that you have to live in a property you own. And certainly you do not have to live in a property that is too small for you and your family. What I have suggested is not tax avoidance, the very opposite, if you have a rental property that is positively geared you will pay tax on the profit. And nobody pays tax by living in their own home, so there is nothing to avoid.

  8. #18
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    Quote Originally Posted by stanace View Post
    There is no tax rule that says that you have to live in a property you own. And certainly you do not have to live in a property that is too small for you and your family. What I have suggested is not tax avoidance, the very opposite, if you have a rental property that is positively geared you will pay tax on the profit. And nobody pays tax by living in their own home, so there is nothing to avoid.
    True that you do not have to live in a property you own, and certainly not one that is too small, which is what I said - make sure you have a reason - real or imagined. The IRD have in the past disallowed expense claims where they have deemed the owner has arranged his accomodation affairs merely to avoid tax. It's a minor point though, because normally they would not be aware of such circumstances unless you wave a flag under their nose. Many years ago when I was foolish enough to invest in residential property I organised with a fellow landlord to swap houses and pay each other rent. My accountant talked me out of it because he thought it was devised for tax advantages - and looked like it; but looking back we should have done it anyway.

  9. #19
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    In my view, you are either into property investing or you're not (a bit like share investing). I was a landlord for 8 years and hated every moment of it. Even though I've lost a lot through the GFC, I love investing/trading shares, and would never go back to property, no matter how lucrative the deal.

    Each to their own, as they say.

  10. #20
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    Quote Originally Posted by funguspudding View Post
    True that you do not have to live in a property you own, and certainly not one that is too small, which is what I said - make sure you have a reason - real or imagined. The IRD have in the past disallowed expense claims where they have deemed the owner has arranged his accomodation affairs merely to avoid tax. It's a minor point though, because normally they would not be aware of such circumstances unless you wave a flag under their nose. Many years ago when I was foolish enough to invest in residential property I organised with a fellow landlord to swap houses and pay each other rent. My accountant talked me out of it because he thought it was devised for tax advantages - and looked like it; but looking back we should have done it anyway.
    Well that would mean that half of the national government would be avoiding tax! They wouldn't do that would they?
    Last edited by Ptolemy; 20-08-2009 at 10:14 AM. Reason: typo

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