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

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  • No

    202 100.00%
  • Yes

    60 58.25%
  • Goff is just an idiot

    2,147,483,655 100.00%
  • Epic fail for Labour

    1,930 100.00%
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  1. #271
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    The key to exempting CGT on the personal residence is the fact people need to have a roof over their head. It goes along the lines why Australia and Canada have exempt GST on fresh foods because these taxes are punitive to the low income families. Clearly not an issue about tax equalisation or for efficiency but rather, more to tax those that have $ FOR investments. We have 'Income" taxes. Why can't we have taxes for those that have "Capital Gain" ????


    aaron: I just don't buy the argument that a CGT will cause capital flight and cause the ruination of our society. If the well-off are threatening the rest of society because their wealth is so great they can destroy a country pandering to them and letting them become even more powerful won't make society any better.
    When you have a country where the top 5% owns like 80% of the wealth of the country, you can be sure they won't be stupid with their $. Brexit is a clear example. Yes NZ won't be destroyed but when you look across the seas how other nations have prospered, i'm in no doubt people in NZ don't have the same living standard as my friends that left to the USA or stayed in Canada or moved to Australia. I know there are exceptions but when I can see my friend that dropped out of highschool (growing up in Canada), moved to the US, he's amassed more wealth and lives in a far better house, driving the latest Tesla Model S P100, (and his wife an anesthetic RN at a hospital in Cali - she also dropped out of highschool) than any of my highly educated cousins that grew up in NZ with all the degrees. But you don't even have to look at the academic aspect, I look at how much timber costs to buy in NZ to build a house vs to buy at Home Depot in Canada or in the US ? It's very clear these differences in price are due to difference in standard of living. What we pay in taxation for social gov't health care is comparable to the Cadillac health care plans my friends pay in the US. Anyways i'm mumbling off topic.

    re minimoke: any improvements like your irrigation and landscaping can be valued independently if you feel the CCC GV doesn't fully reflect your home property value. There's no need to keep receipts of how much hoses and pipework costs. But why let the accountants be busy? Exempt the family home and that's 1 easy way to say you've earned it. As for those that venture to owning several houses for rental properies, slap the CGT on them in every way.

    The Asian investment in Auckland's market is nothing unique. I'm very well aware of it and being quite familiar with the Vancouver housing market in BC, Canada, I do feel the NZ Labour gov't is going a bit too aggressive but simply banning non-residents. When Trudeau was elected PM in Canada, one of the things he did was tacking the house prices in Vancouver and it's worked (not by banning them.. but by simply taxing the hell out of them). By no surprise, a lot of $ from China went into the real estate market ($ from questionable sources - laundering, etc). So rather than the Cdn gov't trying to enforce anti-laundering laws, they attacked these wealthy migrants parking their 'black' money into the real estate by using the "residency clause" in the Cdn ITA. You could say Canada is being half hearted when it comes to anti-laundering laws but IMO, I see no harm in the gov't taking that $ - ?? Why couldn't the NZ gov't do the same? Just send out investigations on these real estate investors from abroad and slam them tax on the gain or CGT. Because in Canada, what these rich migrants were doing is buying the house and claiming the house as their "personal residence" to be tax free, while their high income overseas was not taxed in Canada (like NZ residents are taxed on a world wide basis). Furthermore Vancouver slapped on a "Vacancy Tax" aiming at foreigners buying houses and leaving them empty (as vacation homes for the rich). Can you believe in the 1st year of introduction of that tax, the municipal gov't raked in over $30 MILLION !!!! That's not chump change and the NZ gov't could of done something similar. After all Winston Peters did visit Vancouver shortly after winning the coalition election in NZ so he should of learned some ideas.

  2. #272
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    Quote Originally Posted by SBQ View Post
    The key to exempting CGT on the personal residence is the fact people need to have a roof over their head. It goes along the lines why Australia and Canada have exempt GST on fresh foods because these taxes are punitive to the low income families.....
    People do need accommodation but we live in a dynamic society these days, where home ownership is not necessarily the best way to secure accommodation for every person. People have to move for work; there is not the same social inevitability of marriage and having children.

    For example,some single people may wish to invest in their own businesses and shareholdings rather than having their own home. So why should they pay tax on capital gains as opposed to the single people who invested and earned capital gains on their capital invested in their own home instead, helping to beat up the price of land so that some families are priced out of the market?
    Last edited by Bjauck; 12-02-2019 at 08:30 PM.

  3. #273
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    One (maybe small part) of why lots of things are cheaper in other countries like the US, Canada etc is population, what we may buy in 6 months of say timber is boughr every other week - somethiong along those lines
    So a little less margin maybe all along the chain to the retailer???

    Not a silly idea about taxing foreign investments as you mention sbq especially homes that are vacant for a certain period
    Last edited by Jay; 12-02-2019 at 09:13 PM. Reason: added extra comment

  4. #274
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    Quote Originally Posted by Bjauck View Post
    People do need accommodation but we live in a dynamic society these days, where home ownership is not necessarily the best way to secure accommodation for every person. People have to move for work; there is not the same social inevitability of marriage and having children.

    For example,some single people may wish to invest in their own businesses and shareholdings rather than having their own home. So why should they pay tax on capital gains as opposed to the single people who invested and earned capital gains on their capital invested in their own home instead, helping to beat up the price of land so that some families are priced out of the market?
    I get that not everyone needs to own a home. That's why there are 1 bedroom apartments for rent in major cities. I also understand it may not be fair for the single person renting, to pay CGT or other taxes on their shareholdings or investments. The reason for such exemptions or concessions of CGT is because not ALL asset classes are the same. The person that owns a home as a primary residence shouldn't be owning to make a profit. This is the distinction I learned in NZ where if a person wants a better house, they sell their existing and buy a newer one vs spending $ to IMPROVE the house they live in. Then there's the other issue of mortgaging. The person wanting to buy their 1st home can get a mortgage and typically, their goal is to pay it off. The person that chooses to rent and invest their earnings CAN NOT simply leverage into their shareholdings ; and it's difficult for self employed small business owners to borrow from the banks if the risks are high. Typically real estate has a much lower risk than all other investments. Don't believe me? Go to the bank and ask them why mortgages are easy to obtain vs borrowing for corporate ventures, building projects, etc.

    [QUOTE Jay: One (maybe small part) of why lots of things are cheaper in other countries like the US, Canada etc is population, what we may buy in 6 months of say timber is boughr every other week - somethiong along those lines
    So a little less margin maybe all along the chain to the retailer??? [/QUOTE]

    Not particularly. I had some friends visit from Singapore to do a short tour around NZ. they could not believe how expensive things are here and the biggest shocker was paying $10 for a Starbucks coffee. He simply could not believe it. In Singapore with a population of 1M more than NZ, food is quite affordable and they have to import most of everything. Why is this so? Yes car ownership is more expensive in Sg but that's a given considering how small the country is. But public transport is so good in Sg you really don't need to drive.

    A more probable reason why everything is so expensive in NZ is their marketing approach. Stuff like at Briscoes and Katmandu where the retail price tag is marked up x 10 times. Then they have a big 50% or 70% sale discount and they're STILL making a profit on the item. That kind of model just doesn't work forever as people have fled to online buying from overseas ; but in usual fashion the NZ gov't put on GST at a much lower threshold as to discourage online buying and support local retailers. A big difference to say Costco in N. America that work on a consignment + 5 or 10% markup approach.

  5. #275
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    I agree that not all asset classes are the same. The fact that it is relatively more secure and easier to raise finance makes home ownership so appealing even for those whose circumstances would otherwise not make home ownership the optimal way of securing accommodation. Exempting it from a CGT would make it even more appealing and reduce the appeal of investment in business and shares.

    In NZ Home ownership has often been the default investment or pension scheme. The aim being to leverage capital profit, to trade up so that on retirement there is the ability to trade down to release retirement capital. For most NZ home owner-occupiers capital profit is an important if not the overriding goal of home ownership. It should not be given further preferential tax treatment from other investments unless you want to further encourage people into investing their capital into their housing and away from businesses and financial investments.

    As home ownership rates continue to fall, CGT exemption would be a tax break for those on higher incomes and the wealthier - Unlike the example of GST exemption on some foods
    Last edited by Bjauck; 16-02-2019 at 08:43 AM.

  6. #276
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    Not particularly. I had some friends visit from Singapore to do a short tour around NZ. they could not believe how expensive things are here and the biggest shocker was paying $10 for a Starbucks coffee
    I reckon that anyone buying Starbucks coffee, let alone paying $10 for it, deserves to be fleeced!



    (Sorry, nothing to do with the argument for or against a CGT.)

  7. #277
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    Quote Originally Posted by macduffy View Post
    I reckon that anyone buying Starbucks coffee, let alone paying $10 for it, deserves to be fleeced!




    (Sorry, nothing to do with the argument for or against a CGT.)

    Haha! well, not if that's the only place for coffee in a, high traffic, tourist riddled place
    Let's not forget, minimum wage is on the rise so it won't be long that $10 coffees will be the norm. Plenty of ristos and food eateries closing up in downtown Christchurch because they can't make ends meet (fault of high regulation -> high building costs + higher wages). Bring on the inflation!!

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    Quote Originally Posted by SBQ View Post
    Haha! well, not if that's the only place for coffee in a, high traffic, tourist riddled place
    Let's not forget, minimum wage is on the rise so it won't be long that $10 coffees will be the norm. Plenty of ristos and food eateries closing up in downtown Christchurch because they can't make ends meet (fault of high regulation -> high building costs + higher wages). Bring on the inflation!!
    Yep accommodation costs gobble up so much after tax income.

    Minimum wage may be on the rise but accommodation costs have risen so much more quickly owing to the fact that residential building has not kept up with the population increase.

    In addition development profits have been made by catering for investors (who seek leveraged capital gains) by building upper quartile big houses on small sections. So the market for accommodation for those who earn minimum or near minimum wage has not been catered for and the low-paid rely on government subsidies. These subsidies (from tax revenues) are not paid for by those property investors whose leveraged returns have been from untaxed capital gains.

  9. #279
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    Quote Originally Posted by SBQ View Post
    I don't have a problem with CGT in NZ. But I do have a problem when CGT erodes and discourages investment in NZ. Without investments, you lose jobs, it's that simple. If you disadvantage those that have the $, then you will have what many other nations experience, a 'flight of capital' (Brexit is a good example)
    I guess the very well off will go where ever they get the best deal.
    https://www.msn.com/en-nz/news/world...cid=spartandhp

  10. #280
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    Quote Originally Posted by Aaron View Post
    I guess the very well off will go where ever they get the best deal.
    https://www.msn.com/en-nz/news/world...cid=spartandhp
    It's not just the UK. The world is full of places where the rich can choose to reside.
    This is what I mean about a slow exodus of capital flight. The gov'ts don't understand the benefit rich people have to their economy.

    Look what's happening in NY. Fortunately the US has plenty of other states. In NZ, our NZ1st/Labour coalition needs to understand what motivates the rich to leave?

    https://www.marketwatch.com/story/ch...hq2-2019-02-15

    The video of Munger says it all. “They’re old. They keep your hospitals busy. They don’t burden your schools, the police department, your prisons. They give a lot. Who wouldn’t want rich people?”

    Yet somehow in NZ, if you own a lot of houses or some asset, you're frowned upon and the gov't is just trying to find ways to take that wealth away citing "it's not fair!!!".

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    However If you bend over backwards to try to appeal to the globalised rich business people, who are prepared to travel from country to country, you may well end up with a backlash from the general population - and Brexit and Trump situations.

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    Quote Originally Posted by SBQ View Post
    Haha! well, not if that's the only place for coffee in a, high traffic, tourist riddled place
    Let's not forget, minimum wage is on the rise so it won't be long that $10 coffees will be the norm. Plenty of ristos and food eateries closing up in downtown Christchurch because they can't make ends meet (fault of high regulation -> high building costs + higher wages). Bring on the inflation!!
    THey are closing down because of competiion, just too many of them. No other reason

    westerly

  13. #283
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    Quote Originally Posted by westerly View Post
    THey are closing down because of competiion, just too many of them. No other reason

    westerly
    There are far fewer eateries and restaurants in downtown Chch today than pre-earthquake era. Far fewer businesses in the downtown core too = less workers = less meal plates and coffees to dish out.

    However If you bend over backwards to try to appeal to the globalised rich business people, who are prepared to travel from country to country, you may well end up with a backlash from the general population - and Brexit and Trump situations.
    I know this may be a bit off topic but what is exactly the cause of Brexit? From what I recall it's the mass invasion of migrants destabilizing the general population? Perhaps UK wanted to avoid the issues that Greece, Spain, & Italy experienced? In Trump's case, as Munger mentioned you have pro-democrat states in the US that have failed by turning their backs against wealthy businesses that create jobs. I mean you don't need a lot of common sense to see who generates the employment? or perhaps would the economy (and country) be in a more healthy state if the only jobs available was from the gov't?

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    Quote Originally Posted by SBQ View Post
    I know this may be a bit off topic but what is exactly the cause of Brexit? From what I recall it's the mass invasion of migrants destabilizing the general population? Perhaps UK wanted to avoid the issues that Greece, Spain, & Italy experienced? In Trump's case, as Munger mentioned you have pro-democrat states in the US that have failed by turning their backs against wealthy businesses that create jobs. I mean you don't need a lot of common sense to see who generates the employment? or perhaps would the economy (and country) be in a more healthy state if the only jobs available was from the gov't?
    ‘Mass invasion?”....’destabilisation” only if you believe the screaming tabloid headlines. Lots of causes and there are separate threads for those topics. Briefly many of the poorer people and communities who had been promised ‘Trickle down’” benefits from giving tax breaks to the wealthy, were left further behind by government policies. Many consequently were encouraged by populist politicians who urged the disaffected to vote for them with beguiling slogans such as “make America great again” and “bring back control”.

  15. #285
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    First homes in Auckland only for wealthy buyers or from wealthy families who can contribute toward deposits?

    Would exempting the family home from a CGT amount to a tax break for the wealthier?

    Why not boost income tax thresholds, KiwiSaver tax breaks or introduce a tax break for those who earn up to a certain level of fixed interest?

    https://www.nzherald.co.nz/business/...ectid=12205655
    Last edited by Bjauck; 21-02-2019 at 08:23 AM.

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