Capital Gains Tax? Keep related posts in this thread, please.

[eri]

the tax working group first needs to be set up

then the tax changes suggested

then put into nz law

labour have a bit to spend on their promises when they repeal national's tax cut law

but sadly they will have already spent all that money and more before the next election

which is when any tax changes are supposed to be put in front of the people for voting on

[donna]

I reckon they'll do a 'Trump' and try to do too much too soon. Plus National will sit in opposition and run the Labour led Government haggard over the next 3 years.

cheers,

Donna

[CraigD]

CGT on new home

We intend to subdivide and build on new on the back of our section, but are unsure at this stage whether the new house would be sold or whether we would move in and sell our existing home. If we did end up selling the new build is there any loop hole around preventing it from being subject to CGT? Thanks

[Rosco]

Hi Craig,

There is some great exemption for a section sale in some cases, as long as truly your personal house. But if you build to sell and make a profit, the build part will still be taxable. Also would need to consider GST.

I suggest you get clear on what you want to do, then get some expert advice from a property accountant, to make sure you can get any exemption and to make sure you do it right.

Ross

[Perry]

If we did end up selling the new build is there any loop hole around preventing it from being subject to CGT?

Easy-peasy - no loophole required as NZ does not have a capital gains tax.

http://www.ird.govt.nz/yoursituation-bus/bus-aust-nz/tax-basics/comp-inctax/#06

[fuzzlevalve]

I assume he means income tax..........

[dax]

Capital Gains Tax

Need the tax expert’s valuable insight.

John Smith is GST registered and has a rental in his portfolio.
The rental burnt down during the tenants occupancy (overturned heater). (the tenants managed to get clear and safe)
John sold the property for section value. However he received an insurance pay-out (premiums paid for the cost of rebuild only)
Question: Is the Insurance pay-out subject to GST and CGT?
cheers
Dax

[Wayne]

GST I'd say no because rental is GST'd.
CGT - don't have Capital Gains Tax in NZ.
Brightline - depends on when purchased etc. I would have thought that you chose to sell rather than build so is a sale and if inside the brightline rules then income tax.

But I'm not an accountant :-)

[dax]

Thanks Wayne, Yes the section was sold off but John goes on a loss so I would say there is no income tax for that transaction, however with the insurance pay-out for the house, is there "income tax" to be paid?

[Perry]

When is a Cut Not a Cut?

Capital gains tax would cut house prices by 10%
19 June 2018

Westpac chief economist Dominick Stephens says a new capital gains tax of 10 per cent would reduce house prices by 10.9 per cent compared to where they would have been without it. That would not necessarily mean a sharp fall of 10.9 per cent - instead, prices could remain stagnant while other factors, such as New Zealanders' incomes, caught up.

Do people wonder about econo-mists as much as I do?

[Bluekiwi]

Need the tax expert’s valuable insight.

John Smith is GST registered and has a rental in his portfolio.
The rental burnt down during the tenants occupancy (overturned heater). (the tenants managed to get clear and safe)
John sold the property for section value. However he received an insurance pay-out (premiums paid for the cost of rebuild only)
Question: Is the Insurance pay-out subject to GST and CGT?
cheers
Dax

When your 7th rental property burns down a few people might start getting suspicious John


Yes Perry, Westpac have a long history of getting it completely wrong.

I made the mistake of listening to them in 2003 when they said the market was about to drop.

Instead prices went up 50% from 2003 to 2007.

[artemis]

Capital gains tax would cut house prices by 10%
19 June 2018


Do people wonder about econo-mists as much as I do?

i too wondered about that, Perry. Looked to me like he was talking affordability rather than price alone.

[Perry]

Well, as many more erudite than I, hereabouts, have observed:
How does increasing the price by adding a tax make the item more affordable?
Must need to be an econo-mist to know that answer.

[Bluekiwi]

Well, as many more erudite than I, hereabouts, have observed:
How does increasing the price by adding a tax make the item more affordable?
Must need to be an econo-mist to know that answer.

Simple, banks and council make it too hard to build houses, but Chinese money can come in to build apartments and rent them out.
No one can buy and sell real estate except these cheap shoe box apartments which then get taxed.

Ipso facto, the average price of houses sold in NZ goes down.
Its obvious.

[Perry]

Oh. Silly me. And there I was thinking that, Wesux being the gummint's bank, was doing the gummint's bidding of softening up the suitably dumbed-down constituents to a new levy, duty or tax (or whatever the reds want to call it) and the brain-dead media just reported it without disturbing any of the few, dusty greyed cells left remaining in their cranial cavities.