I am Nervous, No I am Scared

[Rosco]

And this is where your statement deviated from reality

I wish there was a 'like' button sometimes! Thanks for the little laugh!

Ross

[Don't believe the Hype]

https://www.domain.com.au/news/new-z...171102-gzd5dv/

[flyernzl]

https://www.domain.com.au/news/new-z...171102-gzd5dv/

Hardly 'soared' according to them:
"Property values in New Zealand have soared 10.4 per cent in the past five years"

[Don't believe the Hype]

Yeah i saw that data point and was a bit surprised by it.

The point to posting it was to show that the JA Labour govt meddling is purely a replication of the Aus rules that have had not worked in improving affordability for Australian home buyers...

[SimonW]

I feel like that article was supposed to say year on year increases of 10.4%, but even that seems light for Auckland...

[Merlot Mike]

Thought I'd explain why I think 65% of property investors have negative cashflow. From the figures I last found, there were 130,000 property investors approximately . Of these 104,000 approx had 1 property. 23,000 had 2-5 properties. So only 3,000 or 2.3% of property investors had 6 or more properties.

The investors with 6 or more properties, are likely to be experience property investors, who have cashflow positive portfolio's. But this is only 2.3% of property investors!

Some of the investors with 2-5 properties will be positive and some will be negative. From my experience, there is still a large number of these investors will have negative cashflow. That is from talking to a lot of property investors through accounting as well as through property investor groups, and seeing a lot of posts on forums too!

But really its the property investors with 1 property that worries me. Often these are accidental landlords, or investors who have kept their personal home as a rental when they upgraded. Many are on interest only. Many have no strategy, no experience and no real knowledge. Some have been sold into negative properties by the various developers and advisors that recommend this. Many of these landlords also charge below market rent, because they don't want to lose the tenant. This group makes up 80% of property investors. From my experience, this group has not purchased well, and the majority are negative cashflow.

So putting this information together, is how I estimate/guess that 65% of property investors would be negative.

Ross

Thanks Rosco, your info is very interesting. As an aside... any idea what percentage of property investors in NZ do commercial/industrial rather than resi?

[Rosco]

no sorry. I've never heard or seen this percentage.

Ross

[d2ba]

Breaking news heard on TV3 The Nation this morning that the 2 year bright line test for capital gains on property is likely to be extended more than 5 years now. The panel were discussing this on air.
My guess 7 years ?

[Anthonyacat]

The bright line extension will be an interesting one. I wonder whether they'll backdate it, that would really be a problem for some.

The original test came in October 2015, so right now we're in the space where some bright line properties are out of their 2-year taxable lock. I have, for example, a property I bought in January 2016 that I may want to get rid of - I bought it with the intention to hold forever (as I do with all my rentals - I never thought I'd sell them) but it's too far away and been a hassle to keep tabs on. I plan to sell it in Feb/Mar 2018 avoiding Bright Line.

But what if they extend it to 5 years, in June next year? Will it backdate to affect all those properties sold after 2-year expiry from Oct17, where people thought they were selling with no tax? Will it affect people in the exact same situation, but who hadn't sold yet and were planning to selling August/September? Or will it be a 'new' 5-year test that only applies to properties purchased from that date. The latter would be most fair, but you can never guess what lawmakers will do.

[d2ba]

Would be unfair to backdate it , so i reckon unlikely.
My question is if you buy off the plans does the bright line test start from date sales agreement is signed with deposit or actual settlement date? ( a new build can take up to two years)

[Anthonyacat]

Would be unfair to backdate it , so i reckon unlikely.
My question is if you buy off the plans does the bright line test start from date sales agreement is signed with deposit or actual settlement date? ( a new build can take up to two years)

And I've never heard of a government being unfair before, have you? And given they're only hurting the evil investor and property flipper groups, most of whom don't vote left anyway, the backlash would be minimal.

The whole law is 'unfair' depending on your perspective. It's a silly catch-all pseudo capital gains tax, applying only to residential property when it really should apply to shares, art, gold...

Bright Line period starts from the settlement date when you take ownership of the property, and ends the date of the sales agreement (or it may even be, the date the accepted offer was put forward - I'd need to check the specifics. Effectively advantages the IRD at both ends.

[Wayne]

And I've never heard of a government being unfair before, have you? And given they're only hurting the evil investor and property flipper groups, most of whom don't vote left anyway, the backlash would be minimal.

Changing it to 5 years or longer for properties you still own could happen but unlikely.
Backdating and capturing properties already sold is very unlikely I think, very very unlikely.

[Davo36]

The whole law is 'unfair' depending on your perspective. It's a silly catch-all pseudo capital gains tax, applying only to residential property when it really should apply to shares, art, gold...

Or BitCoin?

Can't stand those BitCoin speculators! Lolling around making huge money - much more than your average hard working housing investor!

Should be stopped I tells ya. Totally not fair and increasing inequality.

[surfbluedog]

Hi there, can i just ask how you came to the figure $10,600 before tax refunds?
Just trying to get my head around it all.

[Don't believe the Hype]

Or BitCoin?

Can't stand those BitCoin speculators! Lolling around making huge money - much more than your average hard working housing investor!

Should be stopped I tells ya. Totally not fair and increasing inequality.

I'm running an 'investing in bitcoin' seminar next week, for $1000USD you'll learn how to become a bitcoin millionaire in 90 days tax free.

you should come along - first 50 people to sign up here will receive a 50% discount