Capital Gains Tax

[peat]

One thing certain with real estate is the banks have no quarrels at lending on those assets. But go and try to borrow the same amount (by going margin) in a brokerage account ? to invest in shares? Not a chance.

Ya reckon
I can easily leverage in shares , maybe not 95% as many would with property , but certainly enough to lose it all haha

[JBmurc]

Ya reckon
I can easily leverage in shares , maybe not 95% as many would with property , but certainly enough to lose it all haha

Yes but as an asset to leverage off NZ RES homes Property just about as good as cash in the bank 80%+ ... aka why the property is priced so high to average to low yields now.. and asking prices well over GV-RV

commercial property around 50% prices much closer to RV

Shares / Bullion 5% (even if you own shares in the bank your trying to lend from)

[minimoke]

and asking prices well over GV-RV

GV (??) / RV are totally meaningless numbers. The only people who can use RV are your local council. And it has nothing to do with value but all to do with how much to charge you for rates.

Which is why RV cannot be used on Valuation Day.

[JBmurc]

GV (??) / RV are totally meaningless numbers. The only people who can use RV are your local council. And it has nothing to do with value but all to do with how much to charge you for rates.

Which is why RV cannot be used on Valuation Day.

Well, they are not meaningless even though I've heard the same from R.E Agents .... they certainly are not exact ... but I've had Banks use them in the past sometimes over reg. valuation as they didn't trust the valuer ... then using the banks approved valuer they would come in very closely to what sold over R.V in the area the property was listed ....

looking to buy another commercial property recently I was looking over sales to RV of the 5 most recent sales in the town all sold within 5% of the RV..

To date I've had 21x NZ Property transactions

[minimoke]

looking to buy another commercial property recently I was looking over sales to RV of the 5 most recent sales in the town all sold within 5% of the RV..

That is coincidence.

Rating valuations are done each three years. So for a start you have a +/- between the time of the last valuation and the time of latest sale. Then add the time it takes for the valuation process to run - that may add another 6 months to your total cycle

Now add in the problem that the RV does not include the value of Chattels such as carpets and curtains.

Now add in anomalies in sales. For example an area may not have had any sales.

Now add in the problem with clerical errors - council staff not properly recording details (for example in my renovation they missed of 40sqm of additions)

Now add in natural variance of say +/- 10% for any desktop process.

All this adds up to a number that can be way removed from actual market value.

Add in a lack of back checking. For example two of my neighbours have exactly the same size of land. But there is a $50,000 difference between their two land values. I have 50% more land than these two and my land value is only 10% more.

My RV is about $500k less than current market value. Do I complain. No. Because I am happy paying rates based on this lower level.

But I do have another valuation - and that is for insurance purposes. That's my Sum Insured Value and is much closer to market value

Disc - cant comment on commercial property - But I would think same principles apply

Edit. Just checked Christchurch rates. Last exercise was done with effect from 1 August 2016. New valuations were released on 30 November 20i6. So it took the valuer 4 months to value 167,000 properties. That's going to be accurate. Yeah right!

[JBmurc]

That is coincidence.

Rating valuations are done each three years. So for a start you have a +/- between the time of the last valuation and the time of latest sale. Then add the time it takes for the valuation process to run - that may add another 6 months to your total cycle

Now add in the problem that the RV does not include the value of Chattels such as carpets and curtains.

Now add in anomalies in sales. For example an area may not have had any sales.

Now add in the problem with clerical errors - council staff not properly recording details (for example in my renovation they missed of 40sqm of additions)

Now add in natural variance of say +/- 10% for any desktop process.

All this adds up to a number that can be way removed from actual market value.

Add in a lack of back checking. For example two of my neighbours have exactly the same size of land. But there is a $50,000 difference between their two land values. I have 50% more land than these two and my land value is only 10% more.

My RV is about $500k less than current market value. Do I complain. No. Because I am happy paying rates based on this lower level.

But I do have another valuation - and that is for insurance purposes. That's my Sum Insured Value and is much closer to market value

Disc - cant comment on commercial property - But I would think same principles apply

Edit. Just checked Christchurch rates. Last exercise was done with effect from 1 August 2016. New valuations were released on 30 November 20i6. So it took the valuer 4 months to value 167,000 properties. That's going to be accurate. Yeah right!

No seems to be different for Commercial as they haven't had the same price growth like RES has i.e I'm currently looking at one property 20k under RV .. asking price the same as what it sold for 4yrs ago .. R.V has increased asking price has not ..can't say I've come across many commercial way over like RES property in the AREAS I'm looking

we purchased property here in central otago during 2016 RV 550k we paid 560k now worth over 850k etc so yes old RV way off now ..but its all relative no doubt when next RV come out it will be much higher ... just like your property will be ..

I never have thought RV are accurate as like we know they only do them every so many years.. but I still like to see what it is when looking at property to compare to other properties R.V and then of course how high over sales have been recently ...

End of the day value is what someone is willing to pay .... I think many overpriced RES properties with hyped up REG valuations will come unstuck soon enough as the Building bOOM runs its course...

[minimoke]

we purchased property here in central otago during 2016 RV 550k we paid 560k now worth over 850k etc so yes old RV way off now ..but its all relative no doubt when next RV come out it will be much higher ... just like your property will be ..

Your RV will be higher as there will be actual sales data for that property. Where as mine has no sales data - so all they can do is tweak it by whatever % they reckon is right.

Edit. Heres a wee test. Flash house opposite me has just got a "sold" sign put on it. RV = $900,000. Went on the market Oct 2018 under auction - didn't sell. Then listed for $845,000 (around what I thought it would go for) and didn't sell. Now advertised at $798,000. I'll keep an eye out for actual sale price

[couta1]

Ya reckon
I can easily leverage in shares , maybe not 95% as many would with property , but certainly enough to lose it all haha

I've had an interest only loan at 80% of our house value for many years now to use in the market, can't get a margin call either.PS-Would not use a margin account for the share market, too risky IMO.