nz shares or property

[Bjauck]

I'm amazed that the government (or councils) make bugger all from property sales. Imagine how much a graduated stamp duty tax would bring in! Starting at 2% at $500,000 and over and gradually moving up to 5% on $1,000,000 .... Auckland could have that new harbour crossing paid for in weeks ;o)

very little tax is made from residential property investment as most gains are untaxed capital gains. Even when tax is paid in the form of rates, they are often paid grudgingly,,,At the very least perhaps, stamp duties could be paid on investor and foreign purchases.

By my rough calculation it works out out at 20% compounding return/yr
Infratil is close to that

IFT is definitly one of my better investments, However it was floated in the 1990's whereas Skid bought his house in 1984. It would have been interesting to see how IFT would have coped with the 1987 meltdown.

Your right its a great return,although there has been no return,except managing tenants--It started out as our family home and something I could put my energy into--I didnt leverage as some do--and agree with some of your points,but so far Ive been taxed just like with shares--but the market HAS gone a bit crazy and it cant continue --Thats why at this point its a much harder decision(although at the time we didnt know this was going to happen with prices)--It could also crash as well..who knows.
I got lucky with prices ,but if you saw the house before ,you wouldnt recognize it --there are still places where houses are relatively cheap,but you would have to adjust your lifestyle to be in a different area....well..gotta go ..Ive just lost a tenant,and the other one doesnt knoiw how to change a light bulb.

A great investment and amazing that you could do it without leveraged finance. You put in hard work to turn it around - and have got a good return for your efforts. Most of that return has added value - mostly capital value - to your property, which will not be taxed when you sell. Similarly you have enjoyed periods of increasing land values. Other people work hard and their effort is rewarded by earning a high income, all of which is taxed. Society needs to determine if that is fair.

As you say maintaining a rental property, if you do it yourself, does require hard work and there can be periods when you do not have a tenant.

As property has increased in value so much more than inflation and incomes since 1984, I wonder if people could do what you did, without needing to borrow.

Certainly unleveraged landlords could pay more in the way of income tax as they do not deduct interest charges from rental income. However rental returns would still be a minor part of their total investment returns and the expectation of capital appreciation must be a dominating motivating factor especially in a market like Auckland where average gross rental return is about the same as a 1 yr term deposit interest rate.

[skid]

very little tax is made from residential property investment as most gains are untaxed capital gains. Even when tax is paid in the form of rates, they are often paid grudgingly,,,At the very least perhaps, stamp duties could be paid on investor and foreign purchases.

IFT is definitly one of my better investments, However it was floated in the 1990's whereas Skid bought his house in 1984. It would have been interesting to see how IFT would have coped with the 1987 meltdown.

A great investment and amazing that you could do it without leveraged finance. You put in hard work to turn it around - and have got a good return for your efforts. Most of that return has added value - mostly capital value - to your property, which will not be taxed when you sell. Similarly you have enjoyed periods of increasing land values. Other people work hard and their effort is rewarded by earning a high income, all of which is taxed. Society needs to determine if that is fair.

As you say maintaining a rental property, if you do it yourself, does require hard work and there can be periods when you do not have a tenant.

As property has increased in value so much more than inflation and incomes since 1984, I wonder if people could do what you did, without needing to borrow.

Certainly unleveraged landlords could pay more in the way of income tax as they do not deduct interest charges from rental income. However rental returns would still be a minor part of their total investment returns and the expectation of capital appreciation must be a dominating motivating factor especially in a market like Auckland where average gross rental return is about the same as a 1 yr term deposit interest rate.

I have real doubts that it could be done today,especially in Auckland --which makes the original question hard to answer--The fairness of it all is another debate (Ive just been a lucky bystander in many ways)--to me the whole capital gains thing would most likely work better if they determined the value of props when the law came into affect and work from there--trying to go retrospective would just be to hard and most likely wouldnt work--so at the moment Ive got big gains on paper--not a very big cash flow--high rates-and tenants--and then perhaps a tax to come--9Ive been pretty much buy and hold---those that flick are a different animale.
Im also perfectly aware that this (what I believe)crash thats coming to the share market may well spill over to the housing market and reset values(but not rates)

I still cant figure out why they dont use the existing tracks to Huntley and Hamilton for a decent commuter train into Auckland(thus opening up lots more affordable properties in those areas for those working in auckland.

[kiora]

I have real doubts that it could be done today,especially in Auckland --which makes the original question hard to answer--The fairness of it all is another debate (Ive just been a lucky bystander in many ways)--to me the whole capital gains thing would most likely work better if they determined the value of props when the law came into affect and work from there--trying to go retrospective would just be to hard and most likely wouldnt work--so at the moment Ive got big gains on paper--not a very big cash flow--high rates-and tenants--and then perhaps a tax to come--9Ive been pretty much buy and hold---those that flick are a different animale.
Im also perfectly aware that this (what I believe)crash thats coming to the share market may well spill over to the housing market and reset values(but not rates)

I still cant figure out why they dont use the existing tracks to Huntley and Hamilton for a decent commuter train into Auckland(thus opening up lots more affordable properties in those areas for those working in auckland.

There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
https://www.facebook.com/HamiltonCommuterTrain

[Bjauck]

There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
https://www.facebook.com/HamiltonCommuterTrain

The distance from Hamilton to Auckland, would be commuting distance for many people going into London. If Auckland does not get its act together to meet demand, a fast motorway and train service to Hamilton (and not forgetting potential development of Mercer and Huntly en route) may be a solution.

[trader_jackson]

The distance from Hamilton to Auckland, would be commuting distance for many people going into London. If Auckland does not get its act together to meet demand, a fast motorway and train service to Hamilton (and not forgetting potential development of Mercer and Huntly en route) may be a solution.

Its a good idea, but they can't even get a train to the North Shore (which is just a few km from the CBD), which is in desperate need of one, and has been in desperate need for several years... so I doubt they can build one to Hamilton

[skid]

There was a commuter train Hamilton - Auckland that was shut down 5? years ago due to lack of patronage.It may be better patronized now & be time to bring it back.
https://www.facebook.com/HamiltonCommuterTrain

Probably the key to that would be an efficient and relatively rapid train(which is probably no easy feat)

Just a note on my earlier post about property--When I said I didnt do it like some investors (over leveraged) I did have mortgages,but just made sure I had a high amount of equity--(none of this 95-100% of value borrowing)

I think the whole thing would work better these days in a place more like Hamilton or somewhere out side Auckland where the prices were more affordable--unless of course there is a crash.

[beetills]

In my opinion their are 2 main problems for a commuter train from Hamilton to Auckland.
It would have to leave Hamilton around 6am which is when a lot of freight trains are arriving in the area from south and freight would get preference.
2nd the Whangamarino swamp has only 1 line so thats where all the hold ups would be.

[Bjauck]

In my opinion their are 2 main problems for a commuter train from Hamilton to Auckland.
It would have to leave Hamilton around 6am which is when a lot of freight trains are arriving in the area from south and freight would get preference.
2nd the Whangamarino swamp has only 1 line so thats where all the hold ups would be.

It would cost a lot of money to make the line into a higher speed double track. However it could be worth it, if Auckland prices remain high and new builds remain below what is needed.