What change will we see to property taxation?

[POSSUM THE CAT]

Steve he could do the same with trusts As they do in Aussie. Australian Trusts pay no tax it all has to flow through to beneficaries & maximum tax rates if the benificary is a minor. Plus a few other little quirks if a very low or no income earner

[beacon]

Looks to me that Labour just has to sit tight to see National occupying the Opposition front bench again next term...

[tricha]

The most simplistic change would be to not allow depreciation on rental properties and this may be politically acceptable...

Imm, just sold one rental property, phew, OZ verus NZ, OZ verus NZ, OZ verus NZ, it's becoming very clear.

[beacon]

Imm, just sold one rental property, phew, OZ verus NZ, OZ verus NZ, OZ verus NZ, it's becoming very clear.

Yes, clear to the investors, but clear as mud to Government in power. have posted it elsewhere too, but here is an update:
listings in Waitakere since jan 09 up 27% now
listings in Waitakere since jan 09 up a whopping 52% now (M&D and small landlords)
listings in Manukau since jan 09 up 15% now
listings in Manukau since jan 09 up 30% now (M&D and small landlords)

[beacon]

Confidence down. Let's see what remedies are on offer...

Prescription offered for small fish: Put the money in the bank and go to sleep. The bankers are smart enough to know what to do with your dough....

http://www.landlords.co.nz/read-arti...rticle_id=3685

Prescription offered for big fish: Invest overseas. The way we are going you can forget NZ for the next half century ....

http://www.goodreturns.co.nz/article...-offshore.html

Gee, that's a thumbs-up to the policy makers of the nation. But let me not be too negative. There are some positives occuring. White collar criminals look like they'll begin to see the world more often from behind the bars after all.

[beacon]

So is Mr. Whitehead suggesting that the pool of private landlords be now replaced by increased social housing funded by tax payer dollars (since tax regime has created wrong incentives),
or is he suggesting that private landlords raise rents (because rentals are irrational as an investment currently),
or is the suggestion that property would be justified to crash to make rentals a more profitable investment on revenue yield ratios or to become more affordable to first-home buyers.

http://www.stuff.co.nz/business/3542...acks-tax-plans

Capital like water, follows the path of least resistance. When wealth or people become just numbers, the fact that market dropped by x% appears just as an interesting but painless number ...

[loofa]

A good point to be made in reference to property depreciation allowance compared to other investments.
In the main all other investment items do depreciate do to wear and tear of opertaing the business. Buildings generally do not as they are protected by inflation as well.
Maybe owners should be allowed to depreciate their property but have a compulsory independent valuation every fifth year. If they have overdone the depreciation they should pay back the difference plus a penalty tax. That would give them a message.

[loofa]

If Bill English would telegraph future actions the market would take care of any problems.
As an example the budget could easily get rid of depreciation over more than one year - eg only 2/3 of the current allowance this year and 1/3 next year with a zero level in the third year.
Similarly the LAQC allowances could be removed with advance notice into a future year rather than the current year.
The RB directive that forces banks to source more of their mortgage money from local deposits will have a beneficial effect next year both in restricting lending which will see lending rates rise and much of that rise will end up in the pockets of local individuals on fixed incomes.

[fungus pudding]

A good point to be made in reference to property depreciation allowance compared to other investments.
In the main all other investment items do depreciate do to wear and tear of opertaing the business. Buildings generally do not as they are protected by inflation as well.
.

Inflation and depreciation are two different things. Buildings certainly depreciate. That is as they age they fall below their replacement costs. Infltion masks this in nominal terms, but it's a very real cost to lanlords.

[loofa]

Inflation and depreciation are two different things. Buildings certainly depreciate. That is as they age they fall below their replacement costs. Infltion masks this in nominal terms, but it's a very real cost to lanlords.

Absolutely but maintenance expenses are tax deductible as with all businesses. What most businesses contend with is the higher cost of equipment which normally lasts only a limited time and then is obsolete.
Buildings have a much longer lifespan of in excess of 100 years.
Tenants of residential property are often prepared to accept lower standards for less rent or for local convenience/services unrelated to the building.
In the case of non-residential buildings they do become obsolete and get replaced or totally refurbished because the market is less tolerant of poor condition.