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  1. #21
    Join Date
    Jan 2005
    Posts
    1,129

    Default

    Quote Originally Posted by JohnJackson View Post
    The rental property sector as a whole operates at a loss so receives tax payer dollars as opposed to paying a net positive tax revenue to the IRD.

    So if we draw a big circle around all rental owners and talk about them as one single entity, then NO, there is no tax paid. Worse still the net loss gets subsidized by the tax payer.
    I think you're wrong about this but I'm no tax expert.
    Any loss on a rental is offset against the huge tax bill that the owner incurs in their day job. So the rental owner is paying tax and simply reducing it by a small amount. Overall, we're all paying lots of tax.
    Or shouldn't we look at it this way?

    A business needs to have the intention to operate at a profit. This is not the case with the rental sector as a whole. Using business tax law on the rental sector is the problem, and this is what will be addressed in the next budget.
    Boy, you sound really peeved. I hope you aren't the one who is addressing this in the next budget.

  2. #22
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    14,879

    Default

    Quote Originally Posted by JohnJackson View Post
    The rental property sector as a whole operates at a loss so receives tax payer dollars as opposed to paying a net positive tax revenue to the IRD.

    So if we draw a big circle around all rental owners and talk about them as one single entity, then NO, there is no tax paid. Worse still the net loss gets subsidized by the tax payer.
    Very adroit evasion of the question.

    Are you aware of logical fallacies?

    Here's a rough illustration:

    NZ has a large overseas debt. As you
    live in NZ, you have an overseas debt.



    You assert:
    The rental property sector as a whole
    operates at a loss
    .

    Please adduce your evidence in support
    of that. Hearsay is not adequate.

    Also, please provide me with the contact
    details of the IRD person from whom
    I can obtain a refund of all my rental pro-
    perty income tax.

    If no such option exists, that also proves
    the falsehood of the claim made by you
    and the TWG.

    The spurious argument posited is like the
    reverse of divide and conquer. It's more
    like aggregate and blame [all].
    Quote Originally Posted by JohnJackson View Post
    So if we draw a big circle around all rental owners and talk about them as one single entity, then NO, there is no tax paid. Worse still the net loss gets subsidized by the tax payer.
    Be aware that 'rental property sector' and
    'rental property owners' is unqualified, so
    therefore includes all forms of rental prop-
    erty, not just residential.

    Quote Originally Posted by Flyernzl
    So why do people buy a house and rent it out at a loss? Not just to save tax (I'd sooner pay tax on a profit than lose money on a loss). It's because they have an expectation of a capital gain. Remove the capital gain either through price stability or through taxation and you remove this incentive.
    I disagree. What is described as a capital
    gain is a misnomer, at the very best. It is
    a hedge against inflation. Much of which is
    driven by the government, through all sorts
    of things from stealth taxes to legislative
    compliance costs.
    Quote Originally Posted by JohnJackson View Post
    A business needs to have the intention to operate at a profit. This is not the case with the rental sector as a whole. Using business tax law on the rental sector is the problem . . .
    So that's the problem! Here I thought I was
    running a business, but it's really a hobby.
    Silly me.

    As far as I'm aware, no tax is payable on
    hobby activities. Goody! I'll let the CIR know,
    next time I file a return. May I refer to you
    as the final authority on such matters?
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  3. #23
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,518

    Default

    Not to worry guys. We are going to have serious proerty shortage next year and the screams of the unhoused and those that haven't sufficient income to rent will be very loud. Politicians respond to cries and there is no way they willl exacerbate a housing shortage. They will be looking for ways of building more. But l;andlords are not stupid. We won't sell and we won't build new ones until the business becomes more profitable and things like CGT and Landtax are not means of making rental housing more profitable. So the Govt. will have a problem. All those doomsayers and others will be out in force again.
    The bigger issue about debt is in dairy farms and flash leased cars.

    Question: If the govt. is prepared to support" banks and finance companies why won't it support Property Developers. Particualrly those that are NZ taxpayers, are developing or in the process of developing properties and because of the current climate are being forced into bankruptcy. F & P was in the same boat, but it was iconic so govt rushed to its aid, just as it did with BNZ, and a host of other companies over the years.

    Wednesday, October 07, 2009

    Developergate - Part I

    It has been a bad week for property developers. Worse is to come no doubt but the roll call in the past seven days reads a who's who of some of the most notable buildings over Auckland and indeed New Zealand.


    http://asianinvasion2006.blogspot.com/

    Bears thinking about.

  4. #24
    Join Date
    Jan 2004
    Posts
    1,545

    Default

    I've always made a profit and paid tax on my rentals, but it does irk me that many PI's get rewarded for loading up on debt and get tax relief to reward them. This overseas debt is dragging our country down and could well force interest rates up for everyone.

    I'm all for ring-fencing losses, capital gains tax is fine if it's adjusted for inflation, or a land tax across the board. I'd much rather that unproductive business practice was discouraged and my income tax rate was reduced.

    At the moment we are paying a high tax rate to subsidise all the other shenanigans. Likewise, interest on savings should be inflation adjusted before tax.

    We need some steering (how else but in the pocket), as greed and the me me society is doing damage to our country as a whole.
    Find The Trend Whose Premise Is False - Then Bet Against It

  5. #25

    Default

    The problem with proposals like this being justified as an alterntaive to personal tax.. is that within a few years after the introduction, personal taxes are raosed anyway with very little fanfare, and we have had a enw tax introduced for no reason but to fund govt dept largesse.

    Want proof? Look at the UK.

    Once yuo introduce a tax like CGT ot LT (or heaven forbid inheritance tax), it is very hard to ever get rid of it.

    The catch cry of the UK tax system? "It is only fair" .. sound familiar? One mans fair is another mans fraud. Nowdays the UK has even extended this attitude to retrpospective tax changes, so some poeple have legally paid tax, the govt has closed the legal loophole and backdated the tax 10 years.... it is only fair. As soon as I hear tax groups talking abut fairness I get nervous.

  6. #26
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    14,879

    Default

    Seems like one of the chicken / egg story variants.
    Who's going to identify the causes and deal to them?
    Most everyone seems to be shadow-boxing with
    a broad range of symptoms.

    If the people will lead the way
    Eventually the leaders will follow
    Quote Originally Posted by Gatekeeper
    I've always made a profit and paid tax on my rentals . . .
    Oh dear, another statistic revealing the TWG lies.
    So what's your view of the published statement:
    The $200 billion rental property sector pays no tax
    Truth, half-truth, part-truth, or lie?
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  7. #27
    Join Date
    Dec 2007
    Location
    Vienna, Austria
    Posts
    2,662

    Default

    The 200 billion dollar rental property sector pays no tax:

    What about GST on repairs and maintenance.
    What about the tax paid by banks on interest.
    What about the tax paid by Property managers.


    The indirect tax take must be huge
    The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.

  8. #28
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
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    Sweeping, generalised statements are better
    and easier to addle & fool the gullible, Austro.
    That includes the media!

    Was it Winston who said something like: A lie
    will be half way around the world while truth is
    still doing up its boot laces.


    Adapted, could that be:
    A lie will be promulgated in all the main media well
    before any questions are asked about its veracity.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  9. #29
    Join Date
    Jan 2004
    Posts
    1,545

    Default

    Quote Originally Posted by Perry View Post
    Seems like one of the chicken / egg story variants.
    Who's going to identify the causes and deal to them?
    Most everyone seems to be shadow-boxing with
    a broad range of symptoms.

    If the people will lead the way
    Eventually the leaders will follow

    Oh dear, another statistic revealing the TWG lies.
    So what's your view of the published statement:
    Truth, half-truth, part-truth, or lie?

    But if all the tax I pay goes to subsidise the debt-ridden PI's, I must protest!
    I accept that that may be the case.
    I know just from observation that a big majority of recent (last 6 years say) PI don't make a profit, they make a loss. huge losses, and many have no intention of making a profit. I read somewhere 1.5billion in losses from property. Some great business they are running, while they wait for their tax free capital gains. What you and I do Perry, is old school. Somewhere it went astray and needs to be corrected, we can't be scared of change if it helps us become a more productive country.

    Start thinking of future generations, and what legacy we are leaving them with.
    Find The Trend Whose Premise Is False - Then Bet Against It

  10. #30
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    14,879

    Default

    Well, as it may have been observed, I do not
    accept there are any such thing as capital
    gains, in the general sense that the expression is
    used in relation to property. It is no more than
    a hedge against inflation and the erosion of the
    purchasing power of the NZ dollar.

    A CGT is yet another swat at a symptom, while
    the causes remain ignored.

    Apprehensive of change? I see no evidence of
    real change, just symptom-chasing and fašade
    fiddling charades - that's what's scary.
    Quote Originally Posted by Gatekeeper
    But if all the tax I pay goes to subsidise the debt-ridden PI's, I must protest!
    I accept that that may be the case.
    I'm sure it's squandered on lots of other things
    like ex-MPs subsidised air travel, one of our big
    productive activities, I'm sure.
    Last edited by Perry; 08-10-2009 at 09:57 AM.
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