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Steps no politician will take to control property prices

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  • #31
    What a CGT could do is reduce the impact of speculation by encouraging longer term investment. I think Norway(?) has a sliding scale over a 10 year period where the CGT is high for the first year but nothing in year 10. That makes sense to me.
    You can find me at: Energise Web Design

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    • #32
      It's some sort of naive way of punishing 'others'.

      You know, make some other people (not me) pay a bunch of money so it's easier for me to buy a house. Not much more though than that.
      Squadly dinky do!

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      • #33
        Originally posted by Davo36 View Post
        It's some sort of naive way of punishing 'others'.

        You know, make some other people (not me) pay a bunch of money so it's easier for me to buy a house. Not much more though than that.
        That's kind of the point.
        You can find me at: Energise Web Design

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        • #34
          Off Target

          Originally posted by Davo36 View Post
          It's some sort of naive way of punishing 'others'.

          You know, make some other people (not me) pay a bunch of money so it's easier for me to buy a house. Not much more though than that.

          Originally posted by drelly View Post
          That's kind of the point.
          But it totally misses the actual point that those penalised had nothing to do with creating the environment that created the problem.

          If it was indeed "the point," then (say) let the Auckland Council planners personally pay the CGT as they are the reason behind the reason for the CGT, in the first place. (Aside from more lolly for the W'gton woodenheads)

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          • #35
            Agreed Perry but I think a sliding scale CGT would still be a good thing to encourage longer term investing as preferential to shorter term speculation.
            You can find me at: Energise Web Design

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            • #36
              It will always fail. In OZ there are a number of mechanisms developers and investors use to circumvent it. It will potentially stop mum and dad investors from trying their hand at flipping but it won't slow prices.

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              • #37
                CGT and property prices:
                It is often claimed that a CGT would reduce property prices.
                I'd like to examine this claim.
                A CGT is imposed when a property is sold.
                To avoid CGT you simply don't sell the property.
                A CGT discourages properties from being sold.
                In no way does it influence the sale price - it just influences the number of sales.
                That's why a CGT in other countries has never reduced house prices.
                If you want to reduce house prices then you need to select something which focuses on prices.
                Perhaps supply?
                Last edited by Perry; 10-08-2016, 07:46 PM.

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                • #38
                  Would a stamp duty actually encourage traders?

                  Once the dust has settled and property prices have gone up by the amount of the duty, traders may be faced with lower margins.

                  To make money with lower margins, you need higher volume - hence more trading.

                  This assumes that the amount of trading remains the same - you may see some consolidation in to big players, but the amount of activity remains the same.

                  Successful traders have a type of personality that likes trading - maybe the focus should be giving them something else to trade with? Tulips, anyone?
                  DFTBA

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                  • #39
                    Article: Hit housing bubble through tax

                    Personally I don't think this would ever fly due to the large number of retirees who are asset rich and cash poor.
                    Also very unfair on those with property in Family Trusts due to protection from RPA.

                    Seems pretty poorly thought out to me and that there would be many unintended consequences.

                    COMMENT: As the housing bubble spreads out of Auckland, most New Zealanders understand that one of its underlying causes is speculation.
                    My blog. From personal experience.
                    http://statehousinginnz.wordpress.com/

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                    • #40
                      Communist Claptrap !!!

                      it never ceases to amaze me that idiots like "Susan St John and Alan Johnson are executive members of Child Poverty Action Group." and others purporting to look after the poor, have absolutely no understanding of the realities behind owning property, and that every envy tax they introduce simply goes to make rents higher and hence the poor suffer even more.


                      BTW- its not just old & retired that are now the asset rich / cash poor. With recent rapid inflation of Auckland properties, current property owners are amassing huge equity, but since rents & wages are not rising anywhere near as much, most are unable to use that equity except by buying more property !
                      There is a huge opportunity opening up for the equivalent of reverse mortgage
                      Last edited by Keithw; 12-08-2016, 12:41 PM.
                      Food.Gems.ILS

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                      • #41
                        Originally posted by Keithw View Post

                        BTW- its not just old & retired that are now the asset rich / cash poor. With recent rapid inflation of Auckland properties, current property owners are amassing huge equity, but since rents & wages are not rising anywhere near as much, most are unable to use that equity except by buying more property !
                        True. But I was thinking of that Boomer voting bloc that everyone wants on their dance cards.
                        My blog. From personal experience.
                        http://statehousinginnz.wordpress.com/

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                        • #42
                          There's no chance of this happening with our aging population.

                          Not sure how they think taxing equity is going to discourage investment in assets that can carry a lot of debt???
                          You can find me at: Energise Web Design

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                          • #43
                            I might be missing something but wouldn't this encourage people to put in the absolute minimum LVR as possible and stretch your borrowing as far as possible to get as many rentals as you can... and forget paying principal off when you could go interest only because hey... All that rental income will be tax free! Sounds like the absolute worst thing you could come up with in this environment? Unless of course you wanted to make a lot of money very quickly.

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                            • #44
                              TJC hit it on the head.
                              Free online Property Investment Course from iFindProperty, a residential investment property agency.

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