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  • Greens Wealth Tax?

    anyone knows how they will calculate wealth tax for those "with a nett worth over $1 mil" ... ?!

  • #2
    The net wealth tax will be set at 1% on net wealth over $1 million and 2% on net wealth over $2 million.

    Trusts are punitively taxed, with zero threshold and 2% tax of all assets in the trust.

    Assets held offshore are included in the calculus.

    Net wealth is assets minus liabilities.

    Assets for the purposes of the calculation include the family home, rental properties, kiwi saver, bank savings, shares, bonds, business assets, valuable artworks and any other asset – where its value is greater than $50,000. A car or boat worth more than 50,000 would be considered an asset for wealth tax purposes.


    An Example

    Bill, a retired meat worker owns a family home with no mortgage in Eketāhuna currently worth $447,000.

    Bill saved hard through his working life and progressively purchased a few local properties as rentals for his retirement income. The properties which were purchased for prices of between $50,000 to $100,000 each many years back now have a combined valuation of 3 million dollars with an outstanding mortgage of $30,000. Bill has accumulated $53,000 in his kiwi saver.

    Bill’s net worth is $3.47m of which $2.47m is taxable as an annual wealth tax.

    Bill’s wealth tax bill for the year is $29,400.

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    • #3
      About "Wealth Tax". Wealth means wealthy or rich. It cannot be said that people who own a house over 1 or 2 million are wealthy or rich. The so-called wealth tax is an assets tax.

      Comment


      • #4
        Who do the watermelon party and the other socio-commie reds think they're kidding?

        It's a CGT in disguise.
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        • #5
          Originally posted by Sandie View Post
          About "Wealth Tax". Wealth means wealthy or rich. It cannot be said that people who own a house over 1 or 2 million are wealthy or rich. The so-called wealth tax is an assets tax.
          I'd argue that someone with a $1M freehold house is rich. If someone was renting, but had $1M sitting in their bank account, would you consider them rich? I would. It's the same situation.

          It's certainly not an asset tax, because you can deduct your debt. If you have a $1.5M house but you have a $800k mortgage, your wealth is under $1M, and under the threshold.


          Originally posted by Perry View Post
          It's a CGT in disguise.
          Got to argue with you there I'm afraid Perry! This is much much worse than a CGT.

          A wealth tax would be levied on imaginary unrealised wealth, and hit incredibly hard in our asset-rich-cash-poor aged sector. Plenty of couples in their 60s and 70s with a freehold $2M house, and a couple rentals worth $1M each so their total wealth is $4M, but the rentals are only earning them 2-3% gross yields; a $100k or less per year before tax. Where are they going to find an extra $20k cash every year for a wealth tax?

          This is without even mentioning the massive administrative overhead to keep this thing running.

          It's ludicrous. At least when you get a million dollars in taxable capital gains you have the cash available to pay your $200-300k tax bill.
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          • #6
            Originally posted by Anthonyacat View Post
            Got to argue with you there I'm afraid Perry! This is much much worse than a CGT.
            Agreed. I was too glib. Sorry. It's a Draconian variant.

            It allows comrade socialist Cindy to say, "I've kept my word, it's not a CGT," even though it's that and so much more.

            When / if things go bad, she can blame the watermelon party.

            Any CGT that did not factor in inflation would also be a gain that was "imaginary [and] unrealised."
            Last edited by Perry; 12-10-2020, 06:52 PM.
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            • #7
              Originally posted by Anthonyacat View Post
              [...]

              This is without even mentioning the massive administrative overhead to keep this thing running.

              Yes, assets have to be valued annually for an annual net wealth tax. This would create compliance costs and complexity in a tax system which is largely lauded for its simplicity.

              Complexity would quickly create a tax riddled with exemptions and it is such exemptions that have rendered wealth taxes ineffective in other countries.

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              • #8
                Am I correct in saying the Wealth Tax will be close to 30% of rent income?
                If AK average rent is 650 pw. (33800 PA) and Average house price is just under 1 million. The wealth tax at 1% or 2% of a home is 10 to 20000 or around 30 to almost 60% of the rental income. This assumes your already over the 1 million or 2 million net wealth threshold with no loans on the house. This seams very oppressive? Or am I wrong?

                Comment


                • #9
                  On the 15th of October, Green party co-leader James Shaw has once again said that its "not credible for Labour to rule out wealth tax discussions." [1]

                  While it is not outside
                  realm of possibility that Labour could govern alone, current polls indicate Labour will need the Green Party of Aotearoa New Zealand for support to form Government and the Labour party will have to relent in order to obtain an parliament majority - assuming the Green's hit the 5% threshold. Labour will happily blame the Greens for "forcing them" to introduce the new tax which is expected to impact Auckland (in particular) where the average house price is projected to be $3 million by 2040. [2]

                  I wonder how many voters look at the wealth tax today and say they are not impacted - without considering how debt reduction and house price increases over time will?


                  Source: [1] https://www.rnz.co.nz/news/political...-credible-shaw
                  [2] https://www.oneroof.co.nz/news/avera...-by-2040-37028
                  Last edited by Sanya; 16-10-2020, 05:53 PM.

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                  • #10
                    I doubt any "substantial" new taxes will be introduced in the next term of government.
                    The recession and resulting increasing unemployment will will be the determining factor in any left leaning or democratic politicians here or USA to raise taxes.
                    There number one primary goal will be to reduce unemployment ,increasing taxes on businesses or individuals will cause the opposite effect.
                    The next government will introduce more stimulus into the economy so makes little sense to take it back in taxes because you will arrive at square 1 with higher unemployment.

                    In 3 or 4 years when the country is back to "full time " employment and not "part time " like we are at now and asset prices have increased 50% that is when you may see new taxes.
                    I suppose it is whoever wants to get elected and how wealthy the center voter is or isn't.

                    Interestingly the Labour government in England 40 or 50 years ago * introduced a death tax on the wealthy aristocrat landlords of 80% .
                    The next generation could not afford to maintain mansions and castles so had to tear them down, oddly enough the same Labour government set up trust with taxpayer funded money to protect and restore the few remaining mansions as apart of saving English history.
                    Last edited by Jeffa; 16-10-2020, 06:57 PM.

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                    • #11
                      Well it may not have been the outcome we all wished for but it's Goodbye to the Greens Weath Tax - yaaaaooh!

                      cheers,

                      Donna
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                      • #12
                        I do hope you're right, Donna.

                        Don't overlook comrade socialist Cindy's undertaking to bring some Watermelons into parliament. Just what form that would take and how much influence the Watermelons would have is the concern.

                        I hope ACT do better than Winston First ever did. Not sorry to see that slippery fellow slip away.
                        Last edited by Perry; 18-10-2020, 09:18 AM.
                        Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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                        • #13
                          More tax and tenants "rights" we go.
                          Sir Robert is absolutely right about never owning residential rentals!!
                          I hear Australia's nice.
                          The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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                          • #14
                            Originally posted by PC View Post
                            More tax and tenants "rights" we go.
                            Sir Robert is absolutely right about never owning residential rentals!!
                            I hear Australia's nice.
                            So what is the alternative? Mass exodus of mum and dad investors, homes flood the market, first home buyers take up the slack,(those that can be bothered} BUT cause and would be huge slump in prices?

                            The puppeteers would not like that, huge losses for residential banks.
                            "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

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                            • #15
                              Originally posted by donna View Post
                              Well it may not have been the outcome we all wished for but it's Goodbye to the Greens Weath Tax - yaaaaooh!

                              cheers,

                              Donna

                              Hope you are right Donna.

                              Will Jacinda include the Greens and perhaps even lone Māori Party MP Rawiri Waititi in her new government, either in Cabinet or in a confidence and supply agreement? She has spoken of her desire for consensus-building - so perhaps.

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