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View Poll Results: Should there be a Capital Gains Tax on Property

Voters
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  • No

    213 100.00%
  • Yes

    74 56.49%
  • Goff is just an idiot

    2,147,483,658 100.00%
  • Epic fail for Labour

    1,935 100.00%
Multiple Choice Poll.
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  1. #391
    percy
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    Well I am certainly not going to put my assets in my Maori grand daughter's name.She has a lot of her father "Gunna" in her.
    Not going to buy a big flash house either.
    So not sure what I am going to do yet.
    Maybe sell my specs and add to my income stocks.
    Yet those specs are small companies that need capital to expand.But why bother?

  2. #392
    Senior Member
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    Quote Originally Posted by iceman View Post
    We are the only country in the OECD that does not have a formal CGT although we have the Brightline tax which of course is CGT in disguise. Most of other OECD have a CGT with many exemptions and lower rates than normal income tax. But it has not stopped them from having exactly the same issues as NZ with run away house prices and high rents. The idea that CGT will be a guarantee to lower house prices and lower rent is simply not supported by any evidence
    John Key (National) during his time when CGT was talked about, he said "I'm not convinced CGT would prevent housing prices from sky rocketing". He made references to places like Sydney where housing prices had gone out of control in the past.

    The brightline 5 year hold for real estate is a wash. I know of no person with a real estate portfolio having the intent of selling a house they've just purchased within 5 years. I would not be surprised if IRD gets much revenue from those that buy & sell within 5 years. It's similar to investing in equities or the ETF, the emphasis is long term holds.

    My stance has kinda changed on the view of CGT in NZ. I think NZ is too small of a country to have such equitable policies as our larger brother (Aus) or elsewhere. Accountants have told me when I 1st came to NZ about 20 years ago that NZ needed these "perks" for wealthy investors to keep $ in NZ. I questioned back then why a NZ resident didn't have to declare the gains from their overseas stock trading (of course that's changed now with FIF) but the trend i'm seeing is simple:

    More and more tax incentive BENEFITS that NZ had (which attracted many wealthy investors from abroad ; and don't forget, preventing local wealthy investors from moving their wealth abroad) is vanishing.

    I'm not buying the statement by Jacinda Ardern that NZ needs a "Fair tax system". Like what the hell was the tax system like for the past 20 or 50 years? Is she saying NZ's tax system was never fair to begin with? C'mon Labour Gov't. It reminds me the argument by the tax auditor told me when we were being audited back in Canada, "It's about paying your fair share...." And Canada has plenty of politicians with offshore trusts in numbered Swiss bank accounts.

    I'm more concerned that people get brain washed thinking that it's ok for NZ to have most of it's wealth dashed away abroad as they assume taxing those that can invest = not paying their fair share.

  3. #393
    Dilettante
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    Yes that's how it is SBQ. Labour is now backtracking full speed and promising "family home", "farmers", "small businesses", "Maori" and who knows what else, exemptions. This thing simply will not fly here in NZ.
    I do think agood, low, flat CGT has a part to play in a sensible tax system, but it would have to be like NZ's (world beating) GST, flat rate without exemptions. I have several properties in a European country that has a CGT, yet I've never paid any (except on bank balances and FX gains) because of all the exemptions on "homes" and the totally reasonable "repatriation" clauses.
    Here Labour wants to exempt the "family home". Just momentarily think how much that term and the definitions of it can be stretched. My idea would be to sell my shares and buy a couple of acres sections to build my home on with "extensions" (AKA different abodes) for the rest of my family and charge them rent.

  4. #394
    Legend minimoke's Avatar
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    Quote Originally Posted by iceman View Post
    Yes that's how it is SBQ. Labour is now backtracking full speed and promising "family home", "farmers", "small businesses", "Maori" and who knows what else, exemptions.
    Pretty much just leaves those of us who hold shares

    Quote Originally Posted by iceman View Post
    Here Labour wants to exempt the "family home". Just momentarily think how much that term and the definitions of it can be stretched. My idea would be to sell my shares and buy a couple of acres sections to build my home on with "extensions" (AKA different abodes) for the rest of my family and charge them rent.
    Thinking I might have to have a family home. My wife can have one two. And my kids

  5. #395
    Guru
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    Aug 2012
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    Quote Originally Posted by iceman View Post
    So on the 6 o’clock news we see Taxinda’s Chief Taxman Cullen say he agrees with Iwi they should be exempt from CGT. So Labour wants our tax system based on race. Can this get any worse ?
    Strengthening the NZ version of the apartheid system (“positive discrimination’”) will strengthen the opposition to the tax in other races?

  6. #396
    Guru
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    Quote Originally Posted by minimoke View Post
    [LEFT]Pretty much just leaves those of us who hold shares
    They may as well be done with it and just close the NZ share market and let overseas interests control all large NZ companies!

  7. #397
    Senior Member
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    If I owned a rental property and ran it from home, is that a small business, sounds like one to me, so I would be exempt as well

  8. #398
    Legend minimoke's Avatar
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    Quote Originally Posted by Jay View Post
    If I owned a rental property and ran it from home, is that a small business, sounds like one to me, so I would be exempt as well
    You would be subject to Brightline on the Rental and CGT on the home. Unless you are a Special Person - in which case Labour will be finding a way to exempt you.

  9. #399
    Senior Member
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    Quote Originally Posted by Jay View Post
    If I owned a rental property and ran it from home, is that a small business, sounds like one to me, so I would be exempt as well
    That's been tried well long ago in the past in Canada. Just as a comparison for conversation, Canada's tax system is extremely complex. After all, IRD did come to Canada in the early years to "copy their GST" system so I would not be surprised if they will copy most of their CGT system. Here's an interesting read how Canada dealt with 'loop holes':

    https://torontosun.com/2014/05/05/ti...8-562c33577d27

    "Now? The Income Tax Act is 3,206 pages — 1,038,162 words long."

    Have a think about it. We are in NZ. Should IRD go down this path? I'm not even sure the NZ laws books have that many pages or words? Over 1 Million words to interpret??? Is that reasonable for a population of 4.5M ? Remember, Canada's tax system was never that complex ; When I studied tax at uni our prof told us the reason why the Cdn ITA book is so big and complex is all to do with the "lawyers" & "accountants" fighting in courts, so the politicians had to re-word the writings in the tax act, by covering loop hole after loop hole. On most part, a lot of it has been modeled off the US IRS tax system. But that's not to say, NZ should follow the same regime?

    Jay: I'm well aware of the complexities of CGT in Canada. What you explained doesn't fly there and the way they treat things is IMO, very elaborate to say the least. As an example, my friend back in Canada bought a brand new Mc Mansion house in 2015. As you may not know, new construction Cdn houses are massive to say the lease (typically 1/2 in ground + 2 stories up = effective 3 living levels detached with garage, none of this single story stuff we see in NZ). They only have 1 child so the house was obviously big. The following year, he renovated the basement into a separate dwelling (as these new house have separate 'side door' entrance). His accountant told him that it would be a good $ stream however, my friend did not realise that the portion he rents out "you could say for business" will not be ACCOUNTED for as exemption from CGT. So basically 1/3rd of his house for as long as he owns it, will count as taxable in terms of CGT. He sold his house few months ago to move in a BIGGER house.

    Exemptions are one thing. But loops holes are another. Recent news about NZ IWI being exempt from CGT again, is nothing new in Canada. Their 1st Nations "on reserve" are exempt on most forms of taxation (income and sales tax). But when you look at over 90% of the 1st Nations in Canada, their reserves are run down, neglected, with countless of failed so called 'business ventures'. At least the Maori in NZ are by far, more business focused with far more successes. Perhaps it's environmental or genetics.

    I just want to say that SHOULD NZ have a complicated tax system like our big OECD nations? If so, then that path will be a nasty one and inefficient for our small level of population. Too many politicians and lawyers in the country but not enough for those that do anything.

  10. #400
    Legend
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    Quote Originally Posted by Jay View Post
    If I owned a rental property and ran it from home, is that a small business, sounds like one to me, so I would be exempt as well
    IRD does not classify property investment as a business.

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