Land tax for oversea based Kiwis as well?

[Palmtree]

Just read the article and my heart is sinking..

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11628459

[Rosco]

It is always hard to comment until their is some draft legislation to really look at.
- it might never happen
- the % might be very small
- there might be a period before it comes in
- there might be easy ways around it for NZers abroad. Trusts etc

I don't think any NZ government wants the property market to completely crash, but if a % of the property value was charged as an annual tax, this could stall the values in the rest of NZ overnight and maybe even stall Auckland. Depending on the % applied it could cause a large number of overseas owners to sell, and therefore cause a drop in values.

If you are a short term speculator, or with negative cashflow properties, you should pay particular attention.

Ross

[Beano]

Just read the article and my heart is sinking..




http://m.nzherald.co.nz/business/new...ectid=11628459

The article says it would not be 10pc of the property value but 9pc annual land tax in NZ certainly dampen the property market and probably many landlords would exit the market

[Anthonyacat]

The article says it would not be 10pc of the property value but 9pc annual land tax in NZ certainly dampen the property market and probably many landlords would exit the market

My god yes. I doubt there would be many people wanting to own property at the current market levels if they had to pay 9% of its value in tax each year.

But it's all speculation at this point.

[Wayne]

I don't see a problem from my perspective - but then I live and pay tax in NZ.
The news has grabed comments Shonkey has made and turned them into fact.
A 3 yr threshold for Kiwis overseas was mentioned.
If you are not tax resident then you pay - you may get 3 years grace.
Or nothing will happen.

The 1st results of the 'who is buying from overseas' info will be out soon.
My pick is it will show few foreigners as the info gathering started in October and with the change in rules few complied.
So last 6 months low and picking up.

[Nick G]

If you own it in an entity that also has a local director (i.e. per recent law changes) I don't think this can affect you. Can you imagine the mess if it did?

All this seems like a lot of work to avoid CGT.

[Wayne]

All this seems like a lot of work to avoid CGT.

A CGT only gets you when (if) you sell - land tax gets you every year, even if you can't afford it.

[PC]

Just another tax for the tenants to pay.

[Wayne]

Just another tax for the tenants to pay.

People always say that but rents aren't really related to costs - they are related to supply and demand, coupled with what they can afford.
You do hit a ceiling - people bunch up, they live with Mum and Dad, they live in their cars or even leave the city or town for somewhere cheaper.

[Habitat Property Services]

Land tax... lets see... how might that affect rental profits?
The land tax in Akl will be a higher percentage of the over-all rental income?
So places where land is cheaper, like Eketahuna, will have an increase in the rental profit?

[Wayne]

Land tax... lets see... how might that affect rental profits?
The land tax in Akl will be a higher percentage of the over-all rental income?
So places where land is cheaper, like Eketahuna, will have an increase in the rental profit?

Why will the profit increase in Eketahuna?
You may pay less land tax (if you are overseas) but why does that increase profit?
Cause and effect correlation missing I think.

[Learning]

it won't happen. Key says he'll consider it if a commissioned report finds foreign investors responsible for inflating property prices.

[investorak]

Do we know when the data for the overseas buyers will be out?

[Habitat Property Services]

I'm thinking the percentage of the land value for the whole property, is more in Auckland than Turangi desertside : )

[Bobsyouruncle]

The government would be overwhelmed by homeless people as us investors found a better vehicle for investment and exited property if this silliness ever got out of the driveway.