If National wins ...

[Daytr]

There are plenty of things that can be done. Namely reign in immigration, at least temporarily.
Tax the bejeebers out of foreign property ownership if need be.
& I think you will find a CGT will have some impact, but may take a while to filter through.
But a comprehensive CGT on all property targets the hottest markets.
i.e. if your property is going up 20% pa then you will pay more in tax.
Someone's property that hasn't moved wont pay anything.

I'm not too sure what you want the govt. to do. But be careful what you wish for - in case you get it. Think of Muldoon's rent freeze, and his claw-back tax; think also of Rowling's spec tax. All these things did more harm than good. And we know CGT doesn't work to lower prices. This sort of nonsense - runaway prices - happens from time to time in all markets, not just real estate. Panic not. The world will still be revolving for a few decades yet.

[slimwin]

Er what? You have no control if the value of your property goes up. That's decided by the council and sales in the area. Why should you pay more tax? This will force people to move if they can't then afford to live there.

[Daytr]

You pay the same percentage, but because your house value has gained more i.e. you are better off you will pay more in tax.
Its like any tax, the more you earn or consume the more you pay.
Currently people are using that capital gain to buy investment property heating up the market.
If a portion of that capital gain is paid in tax then it helps take the heat out & if the market.
It could also mean that other taxes could be lowered creating a fairer tax system.

[blackcap]

You pay the same percentage, but because your house value has gained more i.e. you are better off you will pay more in tax.
Its like any tax, the more you earn or consume the more you pay.
Currently people are using that capital gain to buy investment property heating up the market.
If a portion of that capital gain is paid in tax then it helps take the heat out & if the market.
It could also mean that other taxes could be lowered creating a fairer tax system.

Maybe, maybe not. I think you will find ultimately the tenants will bear the burden of this "tax" thus putting it on the people that can least afford to pay it. CGT in Australia has not taken the heat out of the market so I cannot see it doing so here.

[Sgt Pepper]

I'm not too sure what you want the govt. to do. But be careful what you wish for - in case you get it. Think of Muldoon's rent freeze, and his claw-back tax; think also of Rowling's spec tax. All these things did more harm than good. And we know CGT doesn't work to lower prices. This sort of nonsense - runaway prices - happens from time to time in all markets, not just real estate. Panic not. The world will still be revolving for a few decades yet.

Story of the little red (economic) hen

"Who will help me stop this housing bubble?" said the little red economist hen

"Not I "said the international speculator," for I can borrow 100% of the cost of the houses and make lots of money"

"not I" said the Government Minister, "for I know that despite having massive mortgages, the newly wealthy feel good, spend money and vote National, I will not help"

"not I" said the Real Estate agent," for I make buckets of cash flicking property, I will not help!"

And so the little red economist hen was very sad.

Some time later the Housing market crashed and all the people lost a great deal of money and they became sad and very, very, angry.

"Who is to blame for this?" said the property investor.

" Not I "said the Government Minister" for No one told me it was possible "

"Not I" said the real estate man," an inevitable market correction"

" Its all Labours fault" said Major Von Tempsky

[Bjauck]

Er what? You have no control if the value of your property goes up. That's decided by the council and sales in the area. Why should you pay more tax? This will force people to move if they can't then afford to live there.

Are you referring to council revaluations every few years? CGT would apply no doubt when the property is actually sold. If CGT applies on capital gains on property when sold, then the owners have no extra tax to pay until it is sold. Also A comprehensive CGT with no exemptions would likely be introduced with tax reductions in other areas. But if you are heavily invested in an expensive home, you would probably end up paying more tax when you sell it, especially if you have owned it for many years and have kept an interest-only mortgage. However I think owner-occupers will be safe, such a proposal would be deeply unpopular!

Capital gains tax will have the biggest burden on those who buy their properties with small deposits and enjoy the largest property price gains. In rising markets, their equity will increase the most and their capital gain will be large.

In addition, another tax advantage exists on owner-occupied housing: The benefit derived from buying one's own home - accommodation - is untaxed. Unlike the benefit derived from investing your money in a business, the stock market or lending your money to others.

[Bjauck]

Little Red Economist Hen:I wish I had that as my bed-time story when I was a child!

[fungus pudding]

Are you referring to council revaluations every few years? CGT would apply no doubt when the property is actually sold. If CGT applies on capital gains on property when sold, then the owners have no extra tax to pay until it is sold. Also A comprehensive CGT with no exemptions would likely be introduced with tax reductions in other areas. But if you are heavily invested in an expensive home, you would probably end up paying more tax when you sell it, especially if you have owned it for many years and have kept an interest-only mortgage. However I think owner-occupers will be safe, such a proposal would be deeply unpopular!

Capital gains tax will have the biggest burden on those who buy their properties with small deposits and enjoy the largest property price gains. In rising markets, their equity will increase the most and their capital gain will be large.

The same tax would apply whether fully paid for by owner's cash, or whether 100% financed. I've never heard of a CGT that applies only to equity.

[Bjauck]

The same tax would apply whether fully paid for by owner's cash, or whether 100% financed. I've never heard of a CGT that applies only to equity.

I agree. Sorry I did not express myself well.

[westerly]

opular!


In addition, another tax advantage exists on owner-occupied housing: The benefit derived from buying one's own home - accommodation - is untaxed. Unlike the benefit derived from investing your money in a business, the stock market or lending your money to others.

Ignoring the costs of owning a home; rates, insurance, maintenance, all of which are taxed at 15% And then why not extend this to all discretionary spending, which may have some benefit.
One of Gareth's ideas I cannot agree with. (happy to get rid of cats though. ) The neo right have succeeded in selling their low income tax mantra. Govts. now have to broaden the tax base or reduce expenditure to fund essential services.

westerly