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Well done Andrew King and NZPIF

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  • Well done Andrew King and NZPIF

    There is often much negative comment about what the Property investors associations are doing to dispel incorrect information.

    I think we should recognize good work when it's done. Here is a piece in the NZ Herald that covers off the ongoing myth of tax advantage in property. Well done Andrew.

    Now the challenge is to ensure the PR around this message is maintained.

    Latest breaking news articles, photos, video, blogs, reviews, analysis, opinion and reader comment from New Zealand and around the World - NZ Herald


    The one element i think was missed - which might become phase 2 of the story is that all the work paid from by property investors attracts a GST payment (tax paid) that is not claimable due to rents not including GST. While this is not a push for rents to include GST it shows a further TAX disadvantage to property investment over other businesses.
    Last edited by donna; 05-07-2018, 05:52 PM.

  • #2
    Yep, but unfortunately I bet not 1 in 100 people will read all of that article and take that message on board.

    People like the narrative: "It's hard to buy a house because those rich investors buy them and don't pay any tax".

    Any longer or more complicated statement than that - explaining why that is not the case will probably be ignored or not believed.

    And yet, it has to be done i.e. action like that needs to be taken and articles like this need to be written.

    And hopefully it will have an effect on policy makers who should know better.
    Squadly dinky do!

    Comment


    • #3
      So westpac have an idiot economist representing them and the working group have been called out on heading in the pre-determined direction the puppet masters have demanded.

      All is right in the world.

      Well done NZPIF, this is exactly what needs to be done and credit to them for doing it.

      Comment


      • #4
        On the idiot economist they’re paid to spout the agenda of their leadership group who are 3 knuckles up the ministers (or vice versa)


        I went to an ANZ breakfast 6 or so months ago with their then head economist Cameron Barbie making similar statements. He was challenged by someone on the floor asking for him to clarify the tax advantages housing and landlords had. He fumbled around for a moment before coming to the conclusion that they don’t have an advantage. It was very funny to watch.

        Comment


        • #5
          An Opportunity Missed

          Originally posted by Davo36 View Post
          Yep, but unfortunately I bet not 1 in 100 people will read all of that article and take that message on board.
          Who actually wrote that article?
          As in was responsible for its structure?
          Basic PR skills were totally absent.
          The heading should have gone something like:


          Tax Working Group Admits Property Investment Has No Tax Advantage

          The Tax Working Group today admitted that rental property isn't under taxed compared to other assets as their background paper had originally claimed.

          Officials confirmed that there were serious flaws in the study that it had used to reach its original position, saying that study's assumptions about the allocation of returns between taxable income and tax-free capital gains were hypothetical and arbitrary.

          They also said rental property was modelled differently from other assets when it shouldn't have been.

          Then on with the rest of the details . . .

          Comment


          • #6
            “Investment houses do not have an unfair tax advantage” – well, people read what they want to believe, and Parry hit the nail on its head – the headline doesn’t indicate that the public has been misled with dedicated false information or investors used as scapegoats for terrible housing politics. By now too little to late.

            Comment


            • #7
              It fell on deaf ears. I read the comments underneath. I don't know why I put myself through the aggravation.

              Here is a sample of the sheer ignorance of Joe Public.

              One person with some common sense submitted the following:
              Just done an exercise on return, $400k 3 b/room home freehold renting for $400 /week, after rates insurance and accountant fees, then tax , less than $180 week in the hand. Good return. I think not. That doesn't include maintenance and repairs or general wear and tear. You get better return on your money on term at the bank and no head aches.
              Mom & Dad investors are the No1 national provider of rental properties in NZ. If they don't get looked after, they will leave the market in droves. nearly 1/3 of NZ'ers are in rentals.
              Only for someone to counter with:
              Accounting 101 - Expenses are deductible, income tax is the only actual outgoing at the end of the day so a 400k/wk freehold will net you $310/wk or $16,155/yr which is 4% - to make that from a bank they'd have to be offering a interest rate in excess of 5.5%
              I've come across this before: people who for some bizarre reason think that 'deductible' means that you don't actually pay it. And the spelling, grammar and maths of this particular respondent suggests someone reasonably educated! I've seen the same argument for insulation, repairs etc. Apparently as it's deductible, it's all free.
              My blog. From personal experience.
              http://statehousinginnz.wordpress.com/

              Comment


              • #8
                Yep, the stupidity is astounding.

                AfterKiwibuild we need Kiwidrive so we can all drive new cars and when everyone is in a state house we all deserve a state steak cause being hungry is worse than being homeless

                Comment


                • #9
                  Originally posted by sidinz View Post
                  I've come across this before: people who for some bizarre reason think that 'deductible' means that you don't actually pay it. And the spelling, grammar and maths of this particular respondent suggests someone reasonably educated! I've seen the same argument for insulation, repairs etc. Apparently as it's deductible, it's all free.
                  Very common - PIs do it also.

                  But that aside even 4% (as the 2nd poster asserted) is pretty poor for the risk incurred.

                  Comment


                  • #10
                    Originally posted by Wayne View Post
                    But that aside even 4% (as the 2nd poster asserted) is pretty poor for the risk incurred.
                    What if you count the inflation hedge offset?

                    (Presuming no property price crash and no bank 'haircut')

                    Comment


                    • #11
                      I wonder . . . .

                      1) Did the NZPIF write that piece like that? Or did granny Herald abridge it to make it boring and obscure the facts?

                      2) Is the admission by the TWG a smokescreen for something else?

                      Let's hypothesise on that second option for a bit . . .

                      Suppose the W'gton woodenheads have come to realise the damage likely to private residential provision of ring fencing and a CGT? I.e. the visible cost to their 'housing initiative plans' if too many private PIs sell. Suppose that a back-down would look too embarrassing?

                      Hhhmmmm: scapegoat required.

                      Aha! Blame the TWG!

                      The principal W'gton woodenhead can then say: we thought it was a good idea, but the TWG says it's not, and we now accept that.

                      Done! Whew! Potato passed successfully.

                      Comment


                      • #12
                        Originally posted by Perry View Post
                        What if you count the inflation hedge offset?

                        (Presuming no property price crash and no bank 'haircut')
                        I think with a inflation hedge that, hopefully, property would give 4% is still to low for the risks you take (and the hassle).
                        Outsiders think it is a cash cow -I don't think it is.

                        Comment


                        • #13
                          Agreed - the return is better than the cash in the bank but it's not cash cow by a long way.

                          cheers,

                          Donna
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                          Comment


                          • #14
                            Originally posted by Wayne View Post
                            Outsiders think it is a cash cow -I don't think it is.
                            Agreed 100%. However . . . .

                            Outsiders - aka the terminally ignorant and profoundly stupid - are to be avoided, as are their opinions.

                            Comment


                            • #15
                              Originally posted by Perry View Post
                              Agreed 100%. However . . . .

                              Outsiders - aka the terminally ignorant and profoundly stupid - are to be avoided, as are their opinions.
                              It could be (and often is) that they just aren't informed.
                              If everyone who is informed avoids the un-informed they will never become informed.
                              So I let them know when I get the opportunity.

                              Maybe that is part of the problem - too many PIs think they are superior.

                              Comment

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