Originally posted by Bluekiwi
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You can find me at: Energise Web Design
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The author Neville Shute pointed out in his autobiography back in the 1930s/50s that it was largely the profits derived from property development in the outskirts of a city that then financed the growth of industry and the subsequent growth in employment within that city.
(Shute, in his business life, was involved in a startup aircraft manufacturing business).
The money made from the property business is not, as the do-gooders would have us believe, simply stacked up in used fivers under someones bed gathering cobwebs.Last edited by flyernzl; 26-04-2015, 05:21 PM.
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Capital Gains Tax - The Lazy Solution
Jo Doolan
26 April 2015
Originally posted by StuffA capital gains tax is a lazy solution to the complex problem of
Auckland's housing issues and when the Reserve Bank's Deputy
Governor starts advocating for it, one wonders what he was served
at lunch. This is clearly outside the bank's area of responsibility.
It is also perplexing. Why would a capital gains tax on housing
resolve what seems to have been identified as a supply-side problem?
The issue I find difficult to understand is the unexplained fact that
other countries with a capital gains tax on housing have the same
property affordability issues we face.
Then there is the question of who will be brave enough to introduce
such a tax. It was clearly a very unpopular issue with the voters
during the last election, and was one of the reasons Labour found
itself again sitting in the opposition seats. There is a constant as-
sumption that property speculators are not taxed, or that if you buy
a property with the intention of doing it up and selling it, you are
not taxed. This is nonsense. This type of self-centred thinking seems
unfortunately to form the basis of most people's opinions on the
merits or otherwise of a capital gains tax. It is also contrary to our
tax legislation. And it is an insult to the IRD which does a fantastic
job of tracking down and imposing tax on property owners who try
to rort the system.
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Nicely written and an enjoyable read - now we just need more of the same so the message gets through.
Cheers,
DonnaEmail Sign Up - New Discussions, Monthly Newsletter, About PropertyTalk
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It is quite frustrating though, and IRD would agree, that the general public have no idea that the trading tax exists.
Many of them do trade property with the full intention of doing so and they all think they are being smart and dont have to pay tax.
They either think its the amount of houses they buy and sell, or some other rule.
And they often just buy and sell willy nilly and GET AWAY WITH IT.
So its frustrating when you play by the rules and yet others are not.
Without pointing the finger of blame racially, I do know quite a few chinese and indian people who do this.
Chinese tactic in particular is to hold for a year or 18 months, while renting it out, and then sell.
Often making 150k to 200k gain in auckland.
I know as I am sometimes buyin off them, under my GST reg. trading entity, and they are most certainly not GST reg.
So they are also avoiding GST as well as income tax.
Maybe because some of them are based outside of NZ, or have chinese accountants, they feel they dont need to pay tax.
I dont know.
In my trading trust GST reg.
I am paying 33% Income tax, and 15% GST on profit.
So 48%, plus you arent claiming GST on the interest which can be the largest bill if you are selling yourself.
So pretty much 50% Tax on Profits.
I dont see any mention of that in the media.
50% TAX ON TRADERS / SPECULATORS - Lets see some headlines around that !!!
Tighter application of existing rules was what the RB deputy was calling for.
Some evidence for properties sold, that they are not speculative / trading buy and sell.
Would even up the playing field.
As I dont want to be competing in the auctions against people who are not being hit by 50% tax like me.
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Originally posted by Bluekiwi View PostIt is quite frustrating though, and IRD would agree, that the general public have no idea that the trading tax exists.
Many of them do trade property with the full intention of doing so and they all think they are being smart and dont have to pay tax.
They either think its the amount of houses they buy and sell, or some other rule.
And they often just buy and sell willy nilly and GET AWAY WITH IT.
So its frustrating when you play by the rules and yet others are not.
Without pointing the finger of blame racially, I do know quite a few chinese and indian people who do this.
Chinese tactic in particular is to hold for a year or 18 months, while renting it out, and then sell.
Often making 150k to 200k gain in auckland.
I know as I am sometimes buyin off them, under my GST reg. trading entity, and they are most certainly not GST reg.
So they are also avoiding GST as well as income tax.
Maybe because some of them are based outside of NZ, or have chinese accountants, they feel they dont need to pay tax.
I dont know.
In my trading trust GST reg.
I am paying 33% Income tax, and 15% GST on profit.
So 48%, plus you arent claiming GST on the interest which can be the largest bill if you are selling yourself.
So pretty much 50% Tax on Profits.
I dont see any mention of that in the media.
50% TAX ON TRADERS / SPECULATORS - Lets see some headlines around that !!!
Tighter application of existing rules was what the RB deputy was calling for.
Some evidence for properties sold, that they are not speculative / trading buy and sell.
Would even up the playing field.
As I dont want to be competing in the auctions against people who are not being hit by 50% tax like me.
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Originally posted by Bluekiwi View PostIt is quite frustrating though, and IRD would agree, that the general public have no idea that the trading tax exists.
Many of them do trade property with the full intention of doing so and they all think they are being smart and dont have to pay tax.
They either think its the amount of houses they buy and sell, or some other rule. And they often just buy and sell willy nilly and GET AWAY WITH IT..SNIP... 50% TAX ON TRADERS / SPECULATORS - Lets see some headlines around that !!!
Tighter application of existing rules was what the RB deputy was calling for. Some evidence for properties sold, that they are not speculative / trading buy and sell. Would even up the playing field. As I dont want to be competing in the auctions against people who are not being hit by 50% tax like me.
Hon JO GOODHEW: Last Budget this Government actually provided an extra $132 million to Inland Revenue to bolster its tax compliance activities, and, boy, has that been good value for money. Targeting the hidden economy, tax avoidance initiatives returned nearly $50 million—$5.51 for every dollar spent. Targeting property speculators returned $52 million, a return of $7.88 for every $1 invested.
With that level of return I would expect there to be even more funding made available in this year's budget. What isn't said is whether that is actual tax paid, or whether there is any account taken of future tax paid by these people who now know IRD is watching them.
Bluekiwi, you should be passing information on to IRD. I'm picking they will investigate ...
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English says election result last year ended debate on Capital Gains Tax; IRD may get more funds to crack down on property traders
Quote:
"Finance Minister Bill English has directly rejected the Reserve Bank's call for a fresh debate about removing tax incentives for landlords, saying two official Tax Reviews and the public in two elections had decided against any such widening of taxation of landlords."
I think we can end the (pointless) discussion on Capital Gains Tax in New Zealand. Basically it's a vote (and government) losing proposition that no winning political party is dumb enough to implement.
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