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Originally Posted by Billy Boy
I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...
BB
Simply because it's income, and if you exempt one form of income then you've sure opened the floodgates. There's no reason to do that with earnings from interest rates anymore than there is for wages for pouring gas.
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Well my index of rental property has hit a low which contradicts all the negativity about property investment. My index is "the number of 2 bedroom apartments available to rent in mt eden as advertised on trademe". Today it is down to three and only two of them are available right now. Of the hundreds of these apartments in the suburb the supply and demand are almost equally matched, the closest I have seen for a long time. This usually means rents will increase....
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Originally Posted by fungus pudding
Simply because it's income, and if you exempt one form of income then you've sure opened the floodgates. There's no reason to do that with earnings from interest rates anymore than there is for wages for pouring gas.
Yes I see your point
But Govnt's can do what they like, how they like, and if they want people so save (and they do) then give
the plebs a chance to save by making it worth their while. Kiwi saver ??? and the strings attached. .... well ??
BB
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Member
Originally Posted by Billy Boy
I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...
BB
That you will not get.
But the new emphasis that the Reserve Bank is forcing on to the lenders will help out.
By increasing the percentage of funds that must be raised in NZ rather than from Japanese housewives pressure is on to raise deposit interest rates.
You may still pay tax but on a larger income.
Further into the future I wonder if Basel III will force the bank lending ratios to move against lending on housing and thus make houses cheaper by reducing speculative investments for capital gain because mortgage money will be restricted.
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Originally Posted by loofa
Further into the future I wonder if Basel III will force the bank lending ratios to move against lending on housing and thus make houses cheaper by reducing speculative investments for capital gain because mortgage money will be restricted.
I have given some thought too this aspect as well.
I think it could come about, but will it come about quick enough coz of the politicial aspect.
It appears to me the our average "Polly of today" is more interested in keeping his/her arse in a behive seat than serving the greater good of NZ. One could blame MMP and argue that FPP should return as it allows for the hard decisions to be made as and when needed.
BB
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Originally Posted by Billy Boy
I often wonder why a tax break is not offered to various type of saving accounts
i.e. Bank deposits, debentures, coy notes etc etc...
PIE's for high income earners are a tax break.
My view: while technically rentals have no tax advantage to other investments, structurally they do due to high debt and deprecation. The real issue is the alternative. People dont understand shares. People thought they understood fixed interest but how much money has been lost there.
I hoe the government doesn't disincentivise the one investment normal people can do well at and push them into investments they will do worse at. peopel will move into managed funds and we all know they are not the best investment
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Originally Posted by Steve
The FDR regeime is taxing someone on something they may not have got too. People squeeled at the start and now they have adapted to the nusience that it is.
Possibly there needs to be some form of ringfencing as just not allowing depreciation will not generate enough to cover any worthwhile reduction in tax rates. Ringfencing losses is workable, and it won't bankrupt too many investors as they shouldn't have been relying on the marginal tax benefit to make their property investment viable...
Not so. Ringfencing is like taxing the grocer for the proofit he makes on cabbages while ignoring what he loses on lettuces. It's simply not the way the world or any accounting system works.
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Originally Posted by fungus pudding
Not so. Ringfencing is like taxing the grocer for the proofit he makes on cabbages while ignoring what he loses on lettuces. It's simply not the way the world or any accounting system works.
Hmmmm ....But, How else does one acheive the needs in our case ???
With due respect "any accounting system".... accountants do not have the finial say, bless them.
To much borrowing for the wrong reasons is our problem. eg 18yr old s with 20K on their credit cards.
Buying houses for spec purposes or cap gains only... etc
Cheers BB
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Originally Posted by Billy Boy
Hmmmm ....But, How else does one acheive the needs in our case ???
What needs are they? This nonsense flares up every time there is a property boom. It was rife in the Rowling/Muldoon era, and always forgotten when the inevitable crash comes. The current income tax laws are sufficient to clobber those who buy for profit on resale as opposed to investors. Trouble is the IRD gave up enforcing the rules a couple of decades back. No change is needed- the answer is already there.
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