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@rapido said in Housing hornets' nest:
In the 5 years previous the average net migration gain was 50 to 60k per year.
Most of them probably stayed as well. Getting residency, buying homes.
The Kiwi's can come and go as they please. Who knows what they are up to.
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@rapido said in Housing hornets' nest:
In the year March 2020 to February 2021. The most recent figures.
a provisional net loss of 1,400 non-New Zealand citizens and a net gain of 18,900 New Zealand citizens made up an overall net migration gain of 17,400.
In the 5 years previous the average net migration gain was 50 to 60k per year.
Thanks just curious as apparently one of NZ's fav sons (?) Mike Hoskins is worried about the brain drain to Australia (in the NZ Herald today).
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@kirwan said in Housing hornets' nest:
@snowy The rant above your post is a good example of the politics of envy.
I'm not envious at all mate, I think it is a terrible unproductive situation for NZ, which is going to essentially cause an intergenerational class system and drive a heap of smart young people out of the country. I'm well and truly on the rich side of that class situation.
Your post is a good example of how someone stuck in their dogma dismisses any points to the contrary without thinking about or being able to address them - just parroting soundbites eh "Taxinda"? -
Only read the last few posts but has anybody actually acknowledged the biggest factor of the house price boom?
The open policy of Jacinda to appease the Chinese and let them do whatever they want in New Zealand. They have taken full advantage of Auckland real estate. When I exited that market a few years ago (to buy my current house in UK ... ) I had 6 bidders on my place. 5 were Chinese, one Indian. I've not read a single article about the NZ property boom where the buyer wasn't Chinese.
History is repeating the same as it did in Hong Kong. Jacinda needs to stop being kind, and start being pragmatic.
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@snowy I wasn't having a go at you, I was having a go at the accountants' statements. Yeah I get a bit ranty on the subject, but it fucks me off because it is so bad for NZ.
The tax is not the same as any other investment. This is from the IRD website:Example: Joe and Gail buy a second property
What happens when there's more than one reason for buying a property?Joe and Gail own their own home. They buy a second property as a rental. While they hope that in the long-term, the property can be sold for a profit if needed, their reason for buying the property is for rental income. They had not decided to sell the property at the time they bought it.
They do have to pay tax on the rental income . However, any profit from the eventual sale of the property is unlikely to be taxable, unless it is within the applicable bright-line period.
i.e. not taxable. it's not a bloody myth, and maybe you need a new accountant.
The houses don't disappear, someone who was renting buys them, which frees up a rental property. The numbers basically stay the same whoever owns the property. The difference is that more people can own their own home, which I would have thought was obviously a good thing. Right now, despite the 'good deeds' of all these property investors, there are a shitload of people living in government paid motels. There's no difference.
Rental yields are low compared to the recently severely inflated house prices, yes. Which just goes to illustrate that people are doing it for the capital gains. You are happy to talk about your rental yields, are you happy to talk about your capital gains too?
Anyway, the swearing was directed (I thought clearly, but perhaps not) at property investors who are now whinging having just had everything go massively in their favour and reap huge returns - it is the whinging that gets me.
Yes, there are good landlords, and there are healthy homes - and I am totally in favour of people investing in building rental property - but out-competing people who want to live in an existing home when there is a shortage, because the system is rigged in your favour and you can is a shit thing to do. And crying about a change which goes some way to level that playing field directly after making unprecedented massive returns at lowest ever interest cost, which no person working for their income could hope to match, well that's fucked. There's a housing shortage, they should tax the fuck out of all but one home, they should tax the fuck out of unused property - and drop income tax and business tax by a commensurate amount to actually promote some productive economic activity instead of this bullshit selling houses to each other for ever increasing sums and pretending it is building anything. In any economic sense that is absurd. -
@majorrage said in Housing hornets' nest:
Only read the last few posts but has anybody actually acknowledged the biggest factor of the house price boom?
The open policy of Jacinda to appease the Chinese and let them do whatever they want in New Zealand. They have taken full advantage of Auckland real estate. When I exited that market a few years ago (to buy my current house in UK ... ) I had 6 bidders on my place. 5 were Chinese, one Indian. I've not read a single article about the NZ property boom where the buyer wasn't Chinese.
History is repeating the same as it did in Hong Kong. Jacinda needs to stop being kind, and start being pragmatic.
Foreign ownership is kinda llegal now (2018?), though there are ways around it.
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@reprobate said in Housing hornets' nest:
@majorrage said in Housing hornets' nest:
Only read the last few posts but has anybody actually acknowledged the biggest factor of the house price boom?
The open policy of Jacinda to appease the Chinese and let them do whatever they want in New Zealand. They have taken full advantage of Auckland real estate. When I exited that market a few years ago (to buy my current house in UK ... ) I had 6 bidders on my place. 5 were Chinese, one Indian. I've not read a single article about the NZ property boom where the buyer wasn't Chinese.
History is repeating the same as it did in Hong Kong. Jacinda needs to stop being kind, and start being pragmatic.
Foreign ownership is kinda llegal now (2018?), though there are ways around it.
If there is a way around it, it's not illegal.
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@majorrage said in Housing hornets' nest:
@reprobate said in Housing hornets' nest:
@majorrage said in Housing hornets' nest:
Only read the last few posts but has anybody actually acknowledged the biggest factor of the house price boom?
The open policy of Jacinda to appease the Chinese and let them do whatever they want in New Zealand. They have taken full advantage of Auckland real estate. When I exited that market a few years ago (to buy my current house in UK ... ) I had 6 bidders on my place. 5 were Chinese, one Indian. I've not read a single article about the NZ property boom where the buyer wasn't Chinese.
History is repeating the same as it did in Hong Kong. Jacinda needs to stop being kind, and start being pragmatic.
Foreign ownership is kinda llegal now (2018?), though there are ways around it.
If there is a way around it, it's not illegal.
Yes it is. Like speeding is illegal - but plenty of people do it and don't get caught.
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@reprobate said in Housing hornets' nest:
@majorrage said in Housing hornets' nest:
@reprobate said in Housing hornets' nest:
@majorrage said in Housing hornets' nest:
Only read the last few posts but has anybody actually acknowledged the biggest factor of the house price boom?
The open policy of Jacinda to appease the Chinese and let them do whatever they want in New Zealand. They have taken full advantage of Auckland real estate. When I exited that market a few years ago (to buy my current house in UK ... ) I had 6 bidders on my place. 5 were Chinese, one Indian. I've not read a single article about the NZ property boom where the buyer wasn't Chinese.
History is repeating the same as it did in Hong Kong. Jacinda needs to stop being kind, and start being pragmatic.
Foreign ownership is kinda llegal now (2018?), though there are ways around it.
If there is a way around it, it's not illegal.
Yes it is. Like speeding is illegal - but plenty of people do it and don't get caught.
No, thats not even close. Speeding is illegal. You just don't get caught.
If you setup a law to stop foreign ownership, but leave a way around it for foreign ownership then you've basically not made it illegal.
You think all the Chinese students in NZ on student visa's who stayed on and got citizenship & then suddenly at 23 years old had the cash to afford to buy property after property was due to the outstanding work they did being heavily rewarded in such a short period of time?
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@reprobate said in Housing hornets' nest:
@kirwan said in Housing hornets' nest:
@snowy The rant above your post is a good example of the politics of envy.
I'm not envious at all mate, I think it is a terrible unproductive situation for NZ, which is going to essentially cause an intergenerational class system and drive a heap of smart young people out of the country. I'm well and truly on the rich side of that class situation.
Your post is a good example of how someone stuck in their dogma dismisses any points to the contrary without thinking about or being able to address them - just parroting soundbites eh "Taxinda"?Mate, your demonising of landlords in your rant smells more like dogma to me.
These constant attacks on landlords is just reducing the number of available rentals and driving up the price. It’s the personification of the Travolta meme, with Labour MPs looking around wondering why rents have gone up.
A key part of the solution to the housing crisis is to build more affordable housing. Have Labour hit 1000 yet in four years? Or is it still around 500? Bit far to their 100000 election bribe/promise.
And if Taxinda didn’t keep introducing new taxes the nickname wouldn’t stick.
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@reprobate said in Housing hornets' nest:
i.e. not taxable. it's not a bloody myth, and maybe you need a new accountant.
Three different accountants, one of whom worked for the IRD for a long time. Actually four accountants, if I include my father. That was selective quoting by you from the IRD website. It also says on there that trading properties is taxable.
Then IRD question "intent" as well, they will come after you if the intent was to sell, you are a trader. Then that is when "tainting" comes into it as well. It is there and has been for some time. Brightline really just clarified it and make sure that some people evading tax fell within the net. Yes you can own property and rent it out as long as you don't intend to sell it. They made this enforceable with brightline. There are also other interpretations regarding number of times you buy and sell. It all becomes taxable. There is no set number but as I said any accountant will tell you that you are likely to have to pay tax (unless it is your home).
This makes it pretty clear:
WRT to interest deductions - this not leveling the playing field. All it is doing is making other investments more attractive as you can still claim interest expenses if you borrow to buy a business for example. They have created an inequitable taxation system where one sector is targeted which goes against the ethos of fair taxation. Whether anyone agrees that we have ever had that is debatable.
Yes, foreign ownership laws changed in 2018 and it more difficult, has to go through OIO and there is a section on the property Sale and Purchase agreement that covers it through OI consent. It is not illegal, you need consent if you don't have a permanent resident's visa or citizenship (the last bit from memory).
It also isn't overseas investors driving the market since the rules changed:
The comments about people being able to buy houses if investors didn't own them doesn't really wash. The vast majority can't afford to. They need to rent to keep a roof over their heads.
Everybody has seen what is happening to rents recently. Could be due to a reduction in supply (landlords bailing out due to government policy) or it could be landlords trying to get a yield commensurate with the value of their property (good luck with that). It is likely both.So back to my original discussion, what happens now? Purchase prices still going up, unaffordable rents and government / council policies that dissuade investment in the residential sector.
I paid over $7,000 yesterday to council for a building consent. This does not encourage me develop more residential properties.
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@dogmeat said in Housing hornets' nest:
introduced the brightline
That wasn't an increase in taxation, as I mentioned above. It was a clarification to stop tax evasion and repeated trading. A restriction, not an increase as such.
This is interesting regarding some comments from posters above about new builds not being applicable - they will be:
Please note that the government has indicated that new builds will continue to be subject to a 5 year bright-line period. Before this can be legislated, what is considered a 'new build’ is still to be consulted on. The Government intends for the legislation to be retrospective so that new builds acquired on or after 27 March 2021 will continue to be subject to a 5-year bright-line period.Again, how is this encouraging people to increase supply, reduce prices and help people into their own home, even if renting? Building houses isn't for the faint hearted in the first place and we have supply issues. This policy seems way off kilter, almost like an economic ploy to keep supply at a minimum and prices inflated to encourage spending. The psychological aspect of owning a home and what owners think it is worth (which is usually wrong when the market decides).
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@snowy I've never invested in property so I am even more ignorant on the subject than normal but didn't the brightline test introduce a new tax?
Yeah new builds not subject to the increase is how I read it, but you don't have to be the developer and take that risk, just the first owner?
I'm not here to defend Labour's housing policy BTW
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@dogmeat said in Housing hornets' nest:
@snowy I've never invested in property so I am even more ignorant on the subject than normal but didn't the brightline test introduce a new tax?
No, not really. It has always been there. I paid CGT tax on a place that I had in South Auckland and that was pre brightline. Even post brightline the tax still applies as it always has - from IRD:
"Selling residential property after the bright-line period endsThe bright-line property rule does not apply if you sell a property outside the applicable bright-line period. But other property sale rules will still apply when you:
bought the property and you had a firm intention to sell it
you have a pattern of buying and selling or building and selling your main home
or a person you’re associated with are in the business of property dealing, developing or building and the property was bought for the business."Intent is key, and very difficult to prove either way, but if you do 2 or 3 over a couple of years IRD would be justified in looking at your intent. So it is not a "new" tax, it was there already for developers, traders, etc, and even investors. Move to a new home too often, it is even in there. They just refined it.
The problem is at what point does a person become one of those things? I seriously cut down property transactions and had several accountants look at things for me to make sure that it was all legit. Which is why I have responded to the vitriol from a poster on here (even if not intended, it was ill informed) about "tax free" it isn't. Tax is paid on rental income, tax is paid on capital gains if you do it regularly, tax is paid within the brightline period (the period depends when you bought). Tax can be due after the brightline period as above.
@dogmeat said in Housing hornets' nest:
Yeah new builds not subject to the increase is how I read it, but you don't have to be the developer and take that risk, just the first owner?
I guess they will have to clarify that, but yes that does seem to be the angle. Buy a new house as a rental and you will likely need to own it for 10 years if you don't want to pay what is effectively CGT.
The whole intent thing is just a nightmare. I don't know what my intentions for dinner tonight are yet, let alone a property in 10 years time.If you want to avoid the taxman with property, good luck.
The Cobbler of Preston by Christopher Bullock (1716)
’Tis impossible to be sure of any thing but Death and Taxes -
@snowy I am actually considering buying a new CBD apartment. My thought was I can flick after 5 years if it is a new build. I'm unsure about whether I want to move into the CBD for my retirement. If so no issue that will be my home and I will flick or rent the house I've had 30 years.
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@dogmeat I'm not legally qualified to give tax advice, obviously, but you won't be in any of the categories if it is just one and you haven't done any other property trading.
Are you going to rent it and stay where you are for a while? Your current house is fine.Brightline will apply and yes you are correct, 5 years (as it stands).
You can only have one "main home" even if you aren't renting out the apartment. That is to get around the issue of empty homes that annoy both @reprobate and myself.
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@snowy said in Housing hornets' nest:
@dogmeat said in Housing hornets' nest:
@snowy I've never invested in property so I am even more ignorant on the subject than normal but didn't the brightline test introduce a new tax?
No, not really. It has always been there. I paid CGT tax on a place that I had in South Auckland and that was pre brightline. Even post brightline the tax still applies as it always has - from IRD:
The brightline test did bring in a new tax. It caught all the people who purchased residential property with the intention to rent, but then had to sell the property within the time limit set by the brightlines test. Previously people caught in this scenario would not have had to pay tax on the sale (provided they didn't have a history of doing this).
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@crucial said in Housing hornets' nest:
Genuine question. How do IRD treat the mum and dad investors that buy a second property, rent it out for 20 years then cash up when they retire.
They seem to be the 'tax free' ones that never get chased for a share of the capital gain.They pay tax on any rental profit they earn over the 20 years and then get a tax free capital gain upon sale (provided their intention was for it to be a rental property when they first purchased it).
Housing hornets' nest