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We know what is squeezing the life out of the rental market

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  • #31
    Is it not those with a mortgage to pay that would be borderline with bank returns?

    A person with no mortgage could - as part of 'positioning' their rental in the market - offer a slightly lower rental rate when there is no debt, yet still have an above average return.

    I'm not saying that should happen.

    The dilemma is how one goes about calculating the average.

    Thinking of your Auckland vs Galatea example.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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    • #32
      Originally posted by Perry View Post
      But who or what defines average? Be that rent, driving ability or sense of humour? ....
      No such thing as an average sense of humour. Only good ones, ever and always. Self selection, admittedly.

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      • #33
        Galatea - the costs of increasing compliance are much the same here as anywhere else. Maybe higher. Property values and rents are very very different to, say, Epsom.

        I see a few hay and equipment sheds in their future. One bright spot might be sale of low priced properties to owner occupiers.

        Pity about the tenants.

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        • #34
          Many years ago there was a trope that most men would describe themselves as 'above average' drivers and women would describe themselves as 'below average'.

          Don't know if that would still be true, though.
          DFTBA

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          • #35
            That is because the new leasings are market rental and that is only a small fraction of the total market
            The existing rentals are the bulk of the market

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            • #36
              Originally posted by RollingCloud View Post


              Air BNB is definately a very easy tool to use and made that part easy. But I am not sure how people make more money than a tenancy? Maybe not for a studio apartment anyway.
              I am in a FB group of Airbnb owners. We all do it because you make considerably more than with a regular tenancy, even after taking all extra expenses into account. My place, in a lowish socio-economic area, grossed over $30K in the first year of operation. As a regular rental it might have brought in about $18K. I've just nudged into my second year and February bookings are up on last year.
              Experienced operators say they double their income by going short term. By employing cleaners and charging a cleaning fee, you just take care of the bookings.
              My blog. From personal experience.
              http://statehousinginnz.wordpress.com/

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              • #37
                CGT? What CGT?

                15 Feb 2018
                More investment property sales to be stung with capital gains tax

                Originally posted by Stuff
                Government is extending the amount of time for which investment properties must be held before their owners can avoid capital gains tax - despite a warning that it could be bad news for renters. "The extension of the previous government's bright-line test from two years to five in legislation working through Parliament will help dampen property speculation and make homes more affordable," Nash said.

                But in an impact assessment, Inland Revenue and Treasury officials warned there was a risk of "lock-in" as a result of the change, which could reduce the number of dwellings for sale.
                What bunch of morons: the media and parliament.

                If the story is even partly right, people selling houses may be subject to INCOME TAX on any gains.
                Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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                • #38
                  I agree that it is income tax but Capital Gains Tax sounds more emotive and suits their narrative.
                  I don't get why people think this will affect renters though?
                  If you are buying a property to rent and have less than 5 years time frame you are not doing it for the rent I think - so should pay tax on any gain.

                  If you find, due to unforseen circumstances, that you need to sell then any gain (even after paying tax) is a bonus I'd think.

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                  • #39
                    Surely this CGT should also apply to shares, businesses, art works etc.
                    It's only fair...
                    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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                    • #40
                      Originally posted by PC View Post
                      Surely this CGT should also apply to shares, businesses, art works etc.
                      It's only fair...
                      Of course it should, but there are no media stories about those asset owners. The expert tax working group will almost certainly recommend a comprehensive CGT, excluding the family home (whatever that means) which is out of scope. The current government has said tax changes will be published before the 2020 election. CGT did not work well for them in the past. I predict a scramble not to alienate Kiwisavers, famers, business and bach owners, classic cars, boats, and yes art.

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                      • #41
                        Originally posted by PC View Post
                        Surely this CGT should also apply to shares, businesses, art works etc.
                        It's only fair...
                        Trade any of those and you pay tax!

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                        • #42
                          Originally posted by artemis View Post
                          I predict a scramble not to alienate Kiwisavers, famers, business and bach owners, classic cars, boats, and yes art.
                          I don't know how many boats appreciate in value.
                          Generally they are a hole in the ocean to pour money into.

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                          • #43
                            Originally posted by Wayne View Post
                            I don't know how many boats appreciate in value.
                            Generally they are a hole in the ocean to pour money into.
                            Heh, like private planes. But they should still be included in a CGT policy even if tax payable is nil in any particular instance.

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                            • #44
                              I doubt that any forumite sees the idea of income tax being paid on income from trading properties as unfair.

                              But how many traders hold stock for five years before selling it?

                              First, it was two years; then it's five. Next . . . . . ?

                              No matter: Labour will have to wrought a miracle to persuade the electorate to both accept a CGT and re-elect them.
                              Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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                              • #45
                                I have long proposed that anyone who buys a property, rents it out, and then eventually sells it without actually making any profit at any time from the renting should, in the absence of any strong and logical reason why they have done that, should be assumed to have gone into that deal with the capital gain and only the capital gain in mind and thus should be assessed for tax on that gain.

                                (A horrible sentence, I know, but you get the idea).

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