What change will we see to property taxation?

[Billy Boy]

What needs are they? This nonsense flares up every time there is a property boom. It was rife in the Rowling/Muldoon era, and always forgotten when the inevitable crash comes. The current income tax laws are sufficient to clobber those who buy for profit on resale as opposed to investors. Trouble is the IRD gave up enforcing the rules a couple of decades back. No change is needed- the answer is already there.

"What needs are they" - We gotta stop so much borrowing from O/seas for the wrong reasons.
"Trouble is the IRD gave up enforcing the rules a couple of decades back." --Yep !!
So why wont Billy Smurf start swinging the big boot at the IRD.? --- Politics !!!
There again maybe after the Budget ??? who knows.
I do not wear the argument "Too hard to administer"
BB
PS I was a young player in the property market in Wgton until Bill Rowlings put the skids under me/us, Bob jones was right miffed.

[JBmurc]

I agree,
Aways back I tried to have better financial education introduced (especially shares etc) at high school level. The educators just would not consider the idea. Wonder why ?
BB

Yeah just image if instead of the TV programs -Property ladder,home impovements,Locations they had one's to do with the Sharemarket LOL

-We really are a nation of Property sheep

[Billy Boy]

By the way Fungus
What bill Rowling did back in the 70's with his cap gain tax over 2 yrs.
Was'nt that a type of ring fencing ??
BB

[minimoke]

Yeah just image if instead of the TV programs -Property ladder,home impovements,Locations they had one's to do with the Sharemarket LOL

-We really are a nation of Property sheep

In the intersts of balanced TV it loks like the finance secotor is gettign its own show in the guise of a Conman show on one of the channels.

[fungus pudding]

By the way Fungus
What bill Rowling did back in the 70's with his cap gain tax over 2 yrs.
Was'nt that a type of ring fencing ??
BB

Not at all. Profits on sale within the first ten years were taxed on a decreasing scale starting at 90% for sales in the first six months. This was added to income and taxed at the appropriate rate, so it wasn't a cap. gain tax. Rather it was income tax applied to the capital gained - an important difference.
Rng fencing is quite different. If an investor loses 75,000 on property investmentds but makes 75,000 at his normal trade then under ring fencing he will be taxed on 75,000 although his earnings will be nil. Remeber these will be cash losses (depreciation is a non-cash expense, but if that is gone and ring fencing applies, then that scenario is quite possible) That is why it's a very harsh tax and will bankrupt some investors.
Back to Wallace Rowling's tax. It was at a time like the last few years when property was rapidly increasing. - over 20% annually. (It was great fun) Both parties waffled on about it as though it would never stop. They simply don't seem to realise that booms are simply a market correction, investors over-react and busts will follow. IOW words they come right without regulation and dopey schemes. Wallace's nonsense dried up listings - people stopped selling - and just as the heat was dying down, the market flared up agaain. Exactly the opposite of what was intended. (Dear Wallace - I am greatly indebted to you wherever you are - you gave me a wonderful start))

[beacon]

Becoming increasingly clearer where property investors are welcome... unless NZ at least postpones its current fetish to get a "fair share of tax".
"Fair" by standards that are looking increasingly debatable by the day ...

http://www.businessspectator.com.au/...ocument&src=ea

[beacon]

Aussies are crazy as ever. While Rudd seems to still have a good sense of timing (with his mining tax) as well as postponing Henry Tax recommendations pertaining to fine tuning tax in the current environment, Glen seems to have lost the plot altogether. Hope RBNZ is more circumspect...

National seems to not want to learn anything from the Aussies (funny how they keep talking about catchup, yet seem hellbent on doing the opposite by squeezing the property market) ...

[Tee]

There is a chance that depreciation on buildings will be not be disallowed, come end of May.

[fungus pudding]

Last minute bets called ! Tomorrow's the day when we might all be fighting for roof space on the tallest building in town. Or maybe not. I somehow think whatever they do won't be too harsh; the sun will almost certainly rise on Friday morning. Perhaps disallow depreciation on residential, and set a flat rate of depreciation on commercial and industrial. But a lower and flatter income tax rate will be most welcome.

[beacon]

BNZ wants OCR up, regardless of global events, citing local economy strength.
"There was a view the economy was going from strength to strength, but that was based on confidence and other surveys, rather than real economic figures." from the following.

http://www.stuff.co.nz/business/indu...agile-recovery

"But lending growth has been very soft and private sector credit sector growth was practically zero last month. That suggests the economy has not really started to heal yet," Mr Eaqub said.

As well as the prospect of higher official interest rates in the coming year, the Government would be trying to reduce its operating deficit.

"Together those two things will be sucking resources out of the economy and leaning against growth," he said. As well, the net migration gain would slow down as more people left for Australia.