Ring Fencing Matters

[Courham]

From stuff: http://www.stuff.co.nz/national/9313...ortage-worsens

The nation's rental crisis appears to be deepening, with new figures revealing large reductions in available homes and significant rent increases in some areas.
Wellington was hit hardest. The number of rentals on the market plummeted 65 per cent while rent prices and viewings jumped 11 per cent, pushing average rents up to $450 a week in the capital, according to Trade Me's year-on-year figures from April.
Similar drops in rental stock were seen in many regions, including Auckland, Canterbury, Bay of Plenty and Otago.

So rents are up, number of houses being bought by investors to rent out is down across the country. Seems that FHBs are snapping up houses and squeezing out renters- those evil, unproductive FHB b#$tards!

Craig

[Don't believe the Hype]

Craig - We should introduce a FHB tax to protect those who would prefer to rent. This fund should go to helping renters pay their rent when they retire.

[Bobsyouruncle]

And the we could tax existing home owners for not selling their large homes and moving away to make room for immigrants....

[Perry]

I googled "the point of government"

Tut, tut, Eri. Government is not a productive business. Governments are simply tax-seekers.

[Don't believe the Hype]

Tax seekers - gold!!

[eri]

like labour are

control freaks

no matter how often labour control has led to disaster

surely a time will come

when people will do what they're told

for everyone one's best interests

without having to shoot lots of them

[Davo36]

Stalin was an unproductive loser, only killed 20 million or so.

Mao was much more productive. Killing 30 to 45 million (depending on who you believe) during peace time.

[Davo36]

Tax seekers - gold!!

How about Taxiers?

[Perry]

More BS from Labour & smokescreen from National. Talk about throw-up stuff.
Just 15 compliance officers to keep entire rental market in line
7 June 2017

Labour housing spokesman Phil Twyford, who had just finished grilling Smith about housing at a select committee, said the number of officers was ridiculously low. "It's a joke. It's a drop in the bucket. It's pathetic. There are hundreds if not thousands of boarding houses in Auckland alone and there is just no proper oversight or investigation," Twyford said.

He said Labour would set up a licensing scheme where boarding houses would have to register before operation. "We will set up a positive licensing scheme where boarding house operators have to apply to be one." A clear minimum standard would be set by MBIE and enforced by local councils.

[mick51]

It's just "vote buying" by a desperate shadow of a party, destitute of any realistic and/or practical ideas.

Look at the language. Why is offsetting income from one part of a taxable enterprise a tax "break?"

As for rents going up - it's been said before. "The market" decides, not the costs of the business.

When the scarlet party threw their lot in with the watermelon crowd, they probably put the last nail in their coffin.

Problem is: what's the alternative?

You miss the point. Rich taxpayers use losses on property to avoid paying the top rate of tax. Whilst this might be considered a business expense it is driving up property prices. Happening all over the western world. NZ has been pretty lucky so far but perhaps have a close look at what has been happening in Australia which is now in a property bubble which make Auckland look like child's play.
I can't see why using property losses to offset property gains is not a sensible idea. Of course changes in how we tax people is always feared and nobody trusts politicians not to game the system.

[Perry]

You miss the point. Rich taxpayers use losses on property to avoid paying the top rate of tax.

Populist BS. Right up there with Lanthanide's sophistry. No, I don't miss the point. Here's a post from a PT discussion thread on the topic. Here's an excerpt from that thread:

By comparison, the top 3 per cent of individual income earners, earning more than $150,000 a year, pay 24 per cent of all tax received.

[Bob Kane]

You miss the point. Rich taxpayers use losses on property to avoid paying the top rate of tax. Whilst this might be considered a business expense it is driving up property prices.

Got anything to back your claim that landlords are driving up prices - and not a shortage of houses and record immigration levels?

[PC]

Easier to blame-shift the problem onto investors than address the issues the politician have caused themselves.
Gets a little tedious.

[simongu]

I would like to come back to the original post in this thread (rather than talking about bathroom attendants), and in particular the policy statement that "Use the estimated $150 million in increased taxes for $2000 grants toward insulation and heating". I havent read the whole 48 pages of 'discussion' for obvious reasons so this point may have been covered, but I cant see where the increased taxes come from. Presuming losses will still be able to be carried forward to offset against property income, then all this does is create a timing difference in the first few years until later profitability or sale, and claiming that this can be used to fund e.g. heating grants is fundamentally misleading. Am I missing something?

[elguapo]

You miss the point. Rich taxpayers use losses on property to avoid paying the top rate of tax. Whilst this might be considered a business expense it is driving up property prices. Happening all over the western world. NZ has been pretty lucky so far but perhaps have a close look at what has been happening in Australia which is now in a property bubble which make Auckland look like child's play.
I can't see why using property losses to offset property gains is not a sensible idea. Of course changes in how we tax people is always feared and nobody trusts politicians not to game the system.

Negative gearing is a very limited incentive in NZ compared to Australia, it drives the market here, but is a very small influence here. The tax offset is simply not big enough to create any advantage from the actual losses.