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Steps no politician will take to control property prices

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  • Nick G
    replied
    TJC hit it on the head.

    Leave a comment:


  • Tjc
    replied
    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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  • drelly
    replied
    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???

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  • sidinz
    replied
    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.

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  • Keithw
    replied
    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.

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  • sidinz
    replied
    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.

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  • cube
    replied
    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?

    Leave a comment:


  • Bob Kane
    replied
    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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  • Bobsyouruncle
    replied
    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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  • drelly
    replied
    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.

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  • Perry
    replied
    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)

    Leave a comment:


  • drelly
    replied
    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.

    Leave a comment:


  • Davo36
    replied
    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.

    Leave a comment:


  • drelly
    replied
    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.

    Leave a comment:


  • Perry
    replied
    Originally posted by Keithw View Post
    How can adding in additional cost ever reduce a sale price ?
    Another question that remains ever-unanswered, like the one posed by FlyerNZL

    Leave a comment:

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