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

[XYZ-Man]

Maybe they buy the papers.

Human nature to support the "butlers" or "underdogs".

However, the average jono's salary and the lavish lifetyles they love (or their jobs dictate) do not match and so most of them would be struggling to get into their first homes.

[PC]

The papers are mostly supported by the real estate industry.
Just count the number of ads.

Perhaps they should take more care not to bite the hand that feeds them?

[Jalice888]

Maybe they buy the papers.

Then again take a better look at this!
The media are a selfish bunch of bull-media lies that use facts which in turn they change to their own benefit just the same as liars in drug companies do. To run reports against landlords is guaranteed to get a lot of heated reaction which if they supported landlords the news would remain quiet. I wonder what tax all the media people pay, maybe someone should investigate the whole organisation as I'm sure there's a lot of tax avoidance aswell as total ripoffs from media toward us public middle income earners that have tried to provide for our retirement.
Note the part of Mrs baker being a widower which is so often what happens to middle income earners, more and more people are getting fatal disease around the time they expect to retire and too many don't make it to retirement! Is that fair or that we pay for a fat arse on the couch to live free on the dole?
How come Conrad properties built so many apartments under subsidiaries & trusts then took all their profits away off-shore?? Whose pocket do you think smug John Key has got his hands in? Lets have an early election to put a 3rd rate party in control where everyone would get a fairer deal than the 2 main idiots of National & Labour only fight against themselves and do no good at all for the people of this country!
Capital gains tax in relation to how short of time a property is owned is the only just way to go and control inflation while taxing those like Blue Chip mostly who have formed all those bad figures that get used - just the poor secondhand buyers of property get hit again by a greedy government while they get away with using taxpayers money all the time.
Depreciation is a long term buyers investment where they do pay for a large part of the economy in repairs and renovations while property speculation is pure profiteering so should attract Capital Gains Tax. This would better control inflation aswell which will jump with couch potatoes getting more tax relief!

[speights boy]

Keep taking the pills 888.

SB

[XYZ-Man]

Keep taking the pills 888.

SB

I have a terrible cough, please don't make my sides split with laughter.

[XYZ-Man]

Then again take a better look at this!
The media are a selfish bunch of bull-media lies that use facts which in turn they change to their own benefit just the same as liars in drug companies do. To run reports against landlords is guaranteed to get a lot of heated reaction which if they supported landlords the news would remain quiet. I wonder what tax all the media people pay, maybe someone should investigate the whole organisation as I'm sure there's a lot of tax avoidance aswell as total ripoffs from media toward us public middle income earners that have tried to provide for our retirement.
Note the part of Mrs baker being a widower which is so often what happens to middle income earners, more and more people are getting fatal disease around the time they expect to retire and too many don't make it to retirement! Is that fair or that we pay for a fat arse on the couch to live free on the dole?
How come Conrad properties built so many apartments under subsidiaries & trusts then took all their profits away off-shore?? Whose pocket do you think smug John Key has got his hands in? Lets have an early election to put a 3rd rate party in control where everyone would get a fairer deal than the 2 main idiots of National & Labour only fight against themselves and do no good at all for the people of this country!
Capital gains tax in relation to how short of time a property is owned is the only just way to go and control inflation while taxing those like Blue Chip mostly who have formed all those bad figures that get used - just the poor secondhand buyers of property get hit again by a greedy government while they get away with using taxpayers money all the time.
Depreciation is a long term buyers investment where they do pay for a large part of the economy in repairs and renovations while property speculation is pure profiteering so should attract Capital Gains Tax. This would better control inflation aswell which will jump with couch potatoes getting more tax relief!

On a more serious though 888. I do agree with some of your sentiments. I think many investors here on PT do e.g. on depreciation and subsiding those unwilling to put in a day's hard yard.

[fatfishandchipman]

Are you kidding me?

"My first property cost $31,500. [, ] she said. The place was now worth about $300,000.

Now the whole time she owned this property she claimed depreciation!

I see no depreciation here – I see appreciation only. A tax on this kind of appreciation is known as “Capital Gains,” and that is not what is being proposed.

The proposal is to allow claims on only those things that depreciate. This tax will not touch granny’s millions but will allow her to make a fair claim on what rightfully depreciates and that that appreciates!

A lot of Hoo-and-Ha over nothing.

[k1w1]

How much of that appreciation is on the land value, though. Her depreciation is on the house. How many homes have you seen that have gone to rack and ruin thru zero maintenance, being sold for the land value only. Way to twist the figure, Bernie.

[k1w1]

Plus, you're comparing two figures, like-for-like across how many decades? Capital gain has to take inflation into consideration. If she's made no improvements to the place over that time, then all things being equal, capital gain is nil.

[WGN ex-property manager]

Current depreciation is 3% DV on a building.

So, take one building, rent it out, and do ABSOLUTELY NO MAINTENANCE for 33 years. Then come back and tell me buildings don't depreciate.

Depreciation helps newbie Mom and Pop long term investors, is largely irrelevant to old timers only geared at 40% and is totally irrelevant to traders. Which property activity do you want to promote? The rich get richer, the speculators or the steady buy and hold investors who own 1-4 properties for the long term.

I'd favour a capital gains tax over ring fencing or cutting depreciation - but remember that would also pick up any property not the PPOR, so batches and holiday homes would get hit too (taxing luxury items doesn't seem so punitive somehow).

[fatfishandchipman]

How much of that appreciation is on the land value, though. Her depreciation is on the house. How many homes have you seen that have gone to rack and ruin thru zero maintenance, being sold for the land value only. Way to twist the figure, Bernie.

Then isn’t that kind of depreciation the responsibility of the property owner and no other? And either way, a real depreciable item would not be questioned.

The house granny uses as an example includes home and land which has increased in value by $268,500 since the 1980’s (judging by the 19.5% mortgage), I see no depreciation here.

And of that increase in value, provided by none other than the common community of tax payers in the Hamilton area -- which built schools, roads, public utilities, and services such as public transportation and garbage disposal systems, all of which, helped improved the common good of granny’s neighborhood and helped improve the value of granny’s property – of which granny paid not one red-cent towards that which produced the cause and effect that made her a millionaire. And now she complains?

What’s your point, Kiwi? What do you think taxes have done for the value of your properties?

Maybe, you just don’t understand the issue!

Maybe you are really Tony Alexander.

[whitt]

It does not matter anyway.
People should not be using tax refunds as a critical factor in purchasing a rental property.

As is proven ( well very soon) the government can change laws quickly and wipe out any tax refunds. If you stick to the basics and treat tax refunds as a bonus you will be safer.

I say go ahead tighten up on the tax rules. Too many people have been abusing it for sometime.

[k1w1]

You're right, Bern, I don't understand the issue. You said that this tax will not touch granny’s millions but will allow her to make a fair claim on what rightfully depreciates and that that appreciates. Surely that's what she's been doing for 33 years, no?

[k1w1]

The hoo-ha you mention has calmed right down from what it was when a land tax was on the table.

[Xav]

The property cost $31,500. Obviously land was a component of this but even if we assume it wasn't and she could claim depreciation on the whole amount, then she could claim $31,500 until it was fully depreciated. That is around $1,250 per year if she has had it for 25 years.

Anyone on here with a house of that era can tell you it is very likely that maintenance cost her more than that on average per year.

Why should the depreciation be the problem of the home owner when it isn't the problem of any other business with depreciable assets?

She has (presumably) contributed tax from her rental income for all those years, so your argument in that regard is overly simplistic.

Out of curiousity, do you think that the tax changes should apply to owner occupied homes or only rentals?