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

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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%
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  1. #431
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    Quote Originally Posted by Vaygor1 View Post
    And that is how the current model works. Break-even your whole life, just keeping your head above the water making nothing, and then finally, finally, get your reward at the end when selling the asset. Applies to farmers and landlords alike, and it has never been a choice; it is a result of natural market forces.

    If CGT gets introduced the model will change as all landlords/farmers will need to acquire the eventual CG Taxable amount over the period of their ownership. i.e. make up for it by charging higher prices or charging higher rent to make bigger after-tax profits during the ownership period. So either (1) prices/rent will rise, or (2) the cost of housing and farms will drop. I wager 95% of the 'shift' will be seen in (1).

    Introduction of CGT will be grossly unfair to those who have had to operate under the existing model for the last 10-40 years, which will not and can not have taken the introduction and impact of CGT into account. CGT will strip current-day landlords/farmers of their reward, compounded by mechanism (2) a reduced sale price for their farm or house.

    You say 'some' of these farmers elZ... what about the rest of them... just collateral damage?
    Some farmers don't sell, the farm is passed on, so the CGT would roll over. I don't think this govt will bring in CGT without an allowance for inflation. Therefore the CGT should apply to all asset sales, businesses, property excluding the family home (limit on that value depending on location) and farms etc sold to an external party. Maybe the big difference between businesses and property/farming is that the land is a safe risk, it can't be tampered with generally, it doesn't become worthless over time if the business situation changes. So I'd agree with you that some business people break-even for a lot of the time, and at the end there might be no value left. That's not the case for land-owners. Hence they are a bit more aggro about a CGT than business people.

  2. #432
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    Quote Originally Posted by Bjauck View Post
    SBQ - is it a case of wealthy Global citizens choosing their country of residence according to how much tax they have to pay?
    Definitely No. If you didn't understand my last question, the issue is somebody has to be in the top 20%. When gov't policy erodes the incentive to perform because said left population says it's unfair, then what do you think will happen? You don't have to be a rocket scientist to realise that all the extra effort and stress to run a business, or make investments, for the sake of being rewarded will no longer apply - people will just simply give up, and then you would end up with a top the 20% that doesn't have anything to tax.

    Don't be concerned about the wealthy people moving $ around, they've already done so. Be concerned about the hard working businesses that employ people - when these owners are fed up and realise the gov't has slaved them with no reward, then watch out. It doesn't take much to go on the dole.

  3. #433
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    Quote Originally Posted by elZorro View Post
    Some farmers don't sell, the farm is passed on, so the CGT would roll over. I don't think this govt will bring in CGT without an allowance for inflation. Therefore the CGT should apply to all asset sales, businesses, property excluding the family home (limit on that value depending on location) and farms etc sold to an external party. Maybe the big difference between businesses and property/farming is that the land is a safe risk, it can't be tampered with generally, it doesn't become worthless over time if the business situation changes. So I'd agree with you that some business people break-even for a lot of the time, and at the end there might be no value left. That's not the case for land-owners. Hence they are a bit more aggro about a CGT than business people.
    As I mentioned before, all property sooner or later has to be sold (or exchanged hands). You can't "roll over a CGT" by passing on property. lol Upon death "Deemed Disposition" applies which is all assets are considered valued and eventually sold. This is why many OECD nations have exemptions to the CGT for farmland. It allows family members to pass on their land. Yes it's complicated but the reasons are clear.

    The real winners in all this mess IMO, is the banks. They've loaned out all these mortgages, collected interest and not to ever worry about a CGT or any form of taxation on the property. Interest compounding has made the banks rich, but we're not seeing the gov't going after banks.

  4. #434
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    Quote Originally Posted by elZorro View Post
    Some farmers don't sell, the farm is passed on, so the CGT would roll over. I don't think this govt will bring in CGT without an allowance for inflation. Therefore the CGT should apply to all asset sales, businesses, property excluding the family home
    If CGT is brought in there is absolutely no case for excluding the family home.

  5. #435
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    Quote Originally Posted by fungus pudding View Post
    If CGT is brought in there is absolutely no case for excluding the family home.
    Yes there is, the interest on private properties is an after-tax expense and not partly reclaimed in a set of books. Nor are any other costs like rates, insurance and upkeep/maintenance covered. Domestic and commercial rent/leases generally cover most or all of these costs. People living in their own homes may also spend any savings on house extensions or regular renovation, unlike rentiers. So their real capital gain will be minimal in most situations.

  6. #436
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    For Iceman https://www.pundit.co.nz/content/tax...s-for-a-change

    For SBQ https://www.mileiq.com/en-ca/blog/20...-tax-brackets/ Add on the provincial tax and NZ rates are low. Add on the state taxes in the USA also. The banks do exceedingly well as far as profits go in NZ
    I also doubt there will be a rush exodus to overseas tax havens. NZ has relatively low tax rates for higher earners.
    I don’t agree a farmer or business owner should be taxed on profits from selling but I prefer to wait and see the Govt. proposals.
    Most of the discussion on CGT seems to be politically motivated which is to be expected.
    There is a need for CGT particularly in the property area.

    westerly

  7. #437
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    Quote Originally Posted by elZorro View Post
    Yes there is, the interest on private properties is an after-tax expense and not partly reclaimed in a set of books. Nor are any other costs like rates, insurance and upkeep/maintenance covered. Domestic and commercial rent/leases generally cover most or all of these costs. People living in their own homes may also spend any savings on house extensions or regular renovation, unlike rentiers. So their real capital gain will be minimal in most situations.
    Their real capital gain has hardly been minimal. You know as well as I do that it would be political suicide to tax the prime residence - that's the only reason to exclude it. You also know that home owners have a massive advantage over those who rent over time. Of course they face costs while they have the tax free benefit of a roof over their heads, while landlords receive an income, but are taxed on their profits.
    A CGT that is poorly designed is no good to anyone. Properly designed and it would be hard to argue against, provided the revenue was used to lower income tax - the worst tax of all.

  8. #438
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    Who said the CGT impacts only on a small percentage of the population?

    https://www.kiwiblog.co.nz/2019/02/w...posed_cgt.html

    Think again ...
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  9. #439
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    Kiwiblog is a national spin site. . Extreme bias.
    I like the simplification of the Cullen cap gains tax it make s good sense but with all the misinformation and spin around it would be political suicide. Focus on property CGT is great start.

  10. #440
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    Quote Originally Posted by Joshuatree View Post
    Kiwiblog is a national spin site. . Extreme bias.
    Any facts you could contribute? What statement they made was wrong?

    But I than I suppose anything you don't like you seem to call biased. Doesn't matter whether the facts are on their side, it is just about pushing your view - isn't it?

    Labelling a publication "biassed" or worse just because you don't like the message is destroying any fruitful political discussion. Trumpesk.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

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