Land tax - what it could mean for you

[Perry]

And for a place that has a shop below
and a residential flat above, all on the
one title? Plenty of those around. Oh,
what of a farmer who rents a cottage
to a non-employee. What fun.
.

[tricky]

Yep, plenty of exemptions for those sort of situations.

The cross-hairs are on mum-and-dad residential rentals.
They have rorted the system for years, and by god, they're going to pay for it.

What's more, the tax changes will have no effect on rents!
(no media coverage so far about what tenants will be paying after the taxes have been introduced)

[Tucker]

It may take a year or two but things will get back to normal and you will see the Land Tax factored into rents and property prices.

[k1w1]

Maybe not so much on rentals in high-end locations, though.

[CJ]

There should be minimum exemptions. The report suggested no LT where the land is worth less than $50k per acre/hectare?? which excluded farms, foresty and maori land.

All others should paid. Old ladies can defer until sale of the property.

If they just target rentals, i am sure everyone will just say they have multiple boarders in their 10 PPOR.

[k1w1]

Great idea. Maintain a small space in each as a pied-a-terre.

[PC]

Us tangata whenua selling our traditional super juice must surely get an exemption for our base of operations?

(Even if I do - I'm still putting the rent up!)

[flyernzl]

Old ladies can defer until sale of the property.

But surely the problem is that the Government is short of cash now. Deferring a tax for 20 - 30 years is not going to solve that problem now.

There are three sorts of taxes:
- revenue raising taxes. The Government wants money, and will impose taxes on the public to get it. Examples are income and fuel taxes.
- moral taxes. The majority of the public look in dismay at certain behaviours, and taxes are imposed in an attempt to deter these activities. Examples are taxes on tobacco, gambling and alcohol.
- envy taxes. Certain people in society own things or do things that make other people envious. Since not every one can own a Rolls Royce, society may decide to impose penalty taxes on those who do. Others fly off for overseas holidays so we impose departure taxes. The money raised (if any) is not the point, we the public gain satisfaction by penalising a supposedly advantaged individual or group.

Right now, owing to an unlucky combination of external factors, residential landlords are the latest fallguys (and girls). Following along a historic trail after Jews, Chinese, Germans, Russians, Pacific Islanders and dog-owners we are about to be punished for being who we are, just as the Chinese were taxed 100 years ago.

The fact that the punishment is unfair, immoral or illogical is irrelevant. Given the current media and political beatup, I am certain that a new tax will be imposed specifically aimed at residential landlords (commercial landlords eg Bob Jones and Westfield are too well connected and organized to pick on). Short term there will be panic and chaos. Medium term things will sort out and adjust.

My own opinion is that the current residential rental market is illogical and unbalanced and is due for a shakeout. Maybe this is the trigger that will start this process. I do hope so, but that is another argument for another time.

[drelly]

My own opinion is that the current residential rental market is illogical and unbalanced and is due for a shakeout. Maybe this is the trigger that will start this process. I do hope so, but that is another argument for another time.

I tend to agree but don't you think that the shakeout has been happening quite alright on it's own? LOTS of investors going to mortgagee sale and more selling by choice. A friend of mine who bought a rental 2 years ago (against my endlessly patient, free and reluctant advice!) is now listing it for sale - at a loss, partly due to the talk of tax changes. If there are any tax changes, there will be even more sales and I honestly think there will be more problems created than solved.

[Viking]

340000 private rental houses each with a min9imum of one owner but more often two or more. Say 500,000 mostly right voters. Now do you think Blenglish and "Hone" John are going to attack that support base. I don't believe so.

[Hound]

Too right Viking. Many of them spend plenty of time on the net. They would launch a lengthy & blistering counterattack. The only horse National has scared so far is the teachers union.

[Viking]

Yep well I did notice Key stamp his feet at them yesterday.And of course they ran away to hide as well.Key will need much more grunt than that to suceed as he should in that instance. Trouble is that kids are human beings and if there is one thing politicans just cannot understand its human beings.

[muppet]

Teachers have to be careful because the Govt pays their wages.

[muppet]

I wonder how many National MPs are ex teachers(primary that is)?

[SmallBrain]

Teachers have to be careful because the Govt pays their wages.

Than the govt should be careful because we PIs pay taxes... oh or may be not according to the MSM and the tax working group...