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'It's not fair' - the landlady hits back

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  • 'It's not fair' - the landlady hits back

    'It's not fair' - the landlady hits back

    4:00 AM Saturday Mar 6, 2010
    Pat Baker owns properties in Hamilton East and Maeroa as well as the suburbs around Waikato Hospital and Waikato University. Photo / Christine Cornege


    Pat Baker, a $10 million landlady and grandmother, is bristling about being blamed for wrecking the economy.
    The Whangaparaoa retiree owns 53 Hamilton houses, bringing in about $700,000 a year in rent.
    Yet she feels persecuted for providing so richly for her retirement after Government moves this month to axe housing's tax shelter status.
    She wonders what will happen when PM John Key's May Budget changes the rules which could raise GST to 15 per cent, reduce the top tax rate and deny landlords rental building depreciation which could bring in an extra $1.3 billion tax annually.
    "It's said we don't contribute to the economy but I pay rates, insurance, bank interest, numerous tradespeople, merchants and a property manager."
    She is affluent, "but the 53 places could have easily been 250".
    She had 65 properties in Hamilton, but sold 11 that were costing too much to maintain.
    "My first property cost $31,500. I borrowed $21,500 at 19.5 per cent and that was not the top rate," she said. The place was now worth about $300,000.
    She is one of about 180,000 landlords with 451,965 houses and flats facing huge changes.
    Property investors have been accused of using depreciation rules to claim tax losses, resulting in $213 billion of property generating more than $500 million in tax losses two years ago.
    The Tax Working Group, which reported to the Government, said they were not paying their fair share.
    PricewaterhouseCoopers partner and working group member Geoff Nightingale said the property sector was getting big tax subsidies resulting in middle and high-earning PAYE taxpayers contributing more than they should be expected.
    He described the system as unbalanced.
    Revenue Minister Peter Dunne has also accused landlords of abusing the system and claiming Working For Families allowances.
    The working group's recommendations, and the Government's appetite to implement some of them, has upset Mrs Baker.
    "My husband and I worked hard," she says
    "We never had highly-paid jobs but we did have good opportunities to improve our situation. We saved and invested in something tangible which everyone needs.
    "Now I am a 73-year-old widow. I manage very well. I am not a poor old-age pensioner because I took steps when I was younger to invest and accumulate wealth.
    "But now property investors are maligned in the media. That's not fair.
    "How many of our detractors would be willing to save for a deposit, borrow money, pay interest rates and insurance regardless of whether the property is rented or not?"
    http://www.nzherald.co.nz/nz/news/ar...ectid=10630266
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    She is affluent, "but the 53 places could have easily been 250".
    She had 65 properties in Hamilton, but sold 11 that were costing too much to maintain.
    Doesn't 53+11 equal 64??


    Anyway good on her for planning own retirement and not relying on government super.

    However did she not get taught tax rebates and claims should be treated as icing on the cake. Dont rely on them as the governemnts can legislate them out at the drop of the hat. From memory Trass even warns against this in his books.

    Comment


    • #3
      As always, the years when PIs paid lots
      of tax get no mention. Three cheers for
      NZ's balanced reporting 'ethic.'
      Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

      Comment


      • #4
        Originally posted by whitt View Post
        However did she not get taught tax rebates and claims should be treated as icing on the cake. Dont rely on them as the governemnts can legislate them out at the drop of the hat. From memory Trass even warns against this in his books.
        I have spoken with Pat Baker about this, and how the tax changes will affect her own investing. While she will be adversely affected to a significant degree, I believe this is not the main reason why she has chosen to "go public".

        Her main concern, as I understand it, is that the media portrayal of property investors as tax cheats is unfair, and that Property Investors as a group are being unfairly treated by the Government, as compared with other businesses.

        A particular bugbear is the oft-repeated claim that Property Investment is an "unproductive" asset class:

        It's said we don't contribute to the economy but I pay rates, insurance, bank interest, numerous tradespeople, merchants and a property manager.
        Good on her, I say, for actually going to the media and standing up for those 180,000 landlords out there who stand to be treated unfairly by thios government.

        Paul.

        Comment


        • #5
          What they aren't saying is that it will eventually be an increased tax on tenants.
          Rents seem to be rising already.
          Great news for me.
          Keep up the good work Mr Government!
          The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

          Comment


          • #6
            Perhaps it might be compared to GST?
            It'll be a tax on the final consumer, one
            way or another.
            .
            Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

            Comment


            • #7
              Superdad
              yes good on her for speaking up.
              Amazing how the media can twist a story though from the original intent.

              "being unfairly treated by the Government, as compared with other businesses"

              Comment


              • #8
                10 Million dollars should sooth those bristles.

                Comment


                • #9
                  Well of course she does pose a real threat to the Government structure.

                  Think of all those Public Servants who are denied the chance to build interesting and well-paid careers by interviewing her, counseling her, arrange accommodation and supplementary income for her and generally care for her well-being if only she had spent the lot on fags and booze and was now homeless and destitute.

                  How dare she look after herself!

                  Comment


                  • #10
                    I can see it now:

                    Originally posted by nzmedia
                    Greedy Landlady puts hard working Kiwis on the Streets

                    Hamilton Landlady and de-facto tax cheat Pat Baker has revealed that, in light of the introduction of a fairer tax regime, she has sold her $10,000,000 portfolio of 53 investment properties.

                    In the process of liquidating her millions of dollars or property, Ms Baker will make homeless over 60 hardworking Kiwi families who will have nowhere to go except to join the lengthening Housing New Zealand list.

                    Tenant Chris Cringle(*), hard at work in his front yard replacing the engine in his classic car (a 76 Holden) said, "I don't know what me and the missus are going to do. We can hardly feed the kids as it is, 'cos I'm on ACC and my partner is pregnant with our fifth, and the new owner said that he'd have to put the rent up to cover his mortgage.".

                    New millionairess Ms Baker did not respond to our calls, but a Hamilton Property Manager who asked not to be identified told us that he believed that she is going to invest her millions, gained of the back of hard working Kiwi tenants, in a horse racing stud outside Cambridge.

                    (*) Identities changed to protect the innocent ACC Beneficiaries
                    DFTBA

                    Comment


                    • #11
                      So she is complaining that she won't get tax advantages any more, like nearly all other industries?

                      Comment


                      • #12
                        Good one Cube.

                        Why is the media so biased in favour of tenants I wonder?
                        Squadly dinky do!

                        Comment


                        • #13
                          Misquote
                          Originally posted by cube
                          I can see it now:
                          Originally Posted by Moonmedia
                          Greedy druglord puts hard working Kiwis on the Streets

                          Hamilton drug dealer and de-facto tax cheat Pat Ecake has revealed that, in light of the introduction of a harsh drug law, she has sold her $10,000,000 portfolio of 53 labs In the process of liquidating her millions of dollars or property, Ms Ecake will make jobless over 60 hardworking Kiwi homebak chemists who will have nowhere to go except to join the lengthening jobless list.

                          Baker Chris Cringle(*), hard at work in his front yard replacing the engine in his classic car (a 76 Holden) said, "I don't know what me and the missus are going to do. We can hardly feed the kids as it is, 'cos I'm on ACC and my partner is pregnant with our fifth.

                          New millionairess Ms Ecake did not respond to our calls, but a Hamilton Detective who asked not to be identified told us that he believed that she is going to invest her millions, gained of the back of hard working Kiwi addicts, in a horse racing stud outside Cambridge.

                          (*) Identities changed to protect the innocent chemists.
                          go figure....Every activity benifits someone..but does it benefit society as a whole ..that's the acid test.
                          Last edited by SuperDad; 07-03-2010, 07:15 AM. Reason: Fixed quoting

                          Comment


                          • #14
                            Originally posted by Contrail View Post
                            So she is complaining that she won't get tax advantages any more, like nearly all other industries?
                            Actually I think you'll find she's complaining about the possiblity of losing the right to claim depreciation, which currently all industries have and soon (it would appear) all but property will have.

                            Comment


                            • #15
                              Originally posted by Davo36 View Post
                              Good one Cube.

                              Why is the media so biased in favour of tenants I wonder?
                              Maybe they buy the papers.

                              Comment

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