What do you pick the tax changes will be?

[makanlah]

tax changes read Cactus Kate!

The only thing I am confident about picking is that there will be no land tax. That is because the Maori Party has come out very strongly against it, and their vote is crucial for National to stay in power.
As for the other proposals, I can't pick what will happen, but I will say this: remember that the proposals are driven by a very strong pro-share investment lobby, including the unit trust industry.
There is an absoultely sensational, MUST-READ analysis of the proposals done by the blogger Cactus Kate, an NZ off-shore tax specialist based in Hongkong, and who is known for her no-bullshit, seeringly astute political analysis.
I reiterate, property investors - you must read it! google cactus kate, i can't give u the link quickly here as am typing in haste.

[eri]

this 1 i guess


The Tax "Working" Group (TWG) consisted of 13 members. Three (Buckle, Prebble and White) were Victoria University Academics, 5 were heads of the final four accounting firms (Dunne, McLeod, Shaw, Shewan and Nightingale - PwC so important they needed two representatives), 1 was a tax lawyer (Plunket). That is 9 by definition were from dull "head-nodding" professions captured by the principle that to get that far they have had to remove any pretext that they have vision and strategic thought, especially when placed with other like-minds. The final four competing of course for lucratic government contract work - so hopelessly compromised by requiring to serve to the government of the day the lines they want.

http://asianinvasion2006.blogspot.com/2010/01/was-this-tax-group-really-working.html#c1587667864050692642

[eri]

i like this reply to her blog

A handful of years ago I sold a dairy farm in the "dress circle" of the Waikato, having owned it for 20 years. The price was at the top of the market for dairy farms at that time. During my ownership I re-fenced, re-watered, re-raced, re-grassed, upgraded the milking shed and plant, all to high standards of modern dairying, and with herd improvement thrown in increased the property's production by 50%.
Also, in the same year, my family bought a typical bach at a nearby beach,about 100 metres back from the sea,with almost no view. The house and section, occupied for 1 month a year, remain pretty much in the same condition as at purchase, still a typical bach, but now very much old style.
Over the same period of time the beach bach appreciated two and half times as much as dairy farm did, but with none of the additional investment of time,money and skill.
Had I invested the same amount of capital in beach property as the purchase price of the dairy farm, even with the income profit from the farm (and even none from the beach property portfolio) the beach property would have been a massively better investment.

[Bob Da Builder]

Ring fencing losses in Australia.
In 1985 in Aus the labour government effectively tried to stop negative gearing (which is what this is about) by stopping property investors from offsetting the interest on an investment property loan against other income. Interestingly all other losses could be caried forward to when the property was cash flow positive.

The result was that the government totally mis read the phycology of investors.The then lack of property investors resulted in a shortage of rental properties and rents skyrocketed. I think in the main cities they almost doubled in 2 years. There was the predictable tenant back lash and this was scrapped 2 years after inception.

It was a right royal cock up. I wonder how long it will take the tax experts from the tax working group to think this through, given their recomendations I would say its a fair bet that they probably won't.

All countries subsidise there public housing. It will be very interesting if nz bucks the trend because we know best.

Are the trying to level the playing field by mucking up property investment ?

[Keithw]

"Are they trying to level the playing field by mucking up property investment ?"

yes- its standard NZ socialist ideals- Bring everyone down to the same level rather than encouraging everyone to work to get to a higher level !

[Bob Da Builder]

They are supposed to be leveling the playing feild, not leveling the country. In a sick kind of way it is kinda funny that the future of tax reform in NZ has been put together by these 13 clowns, as discribed by Eri so well above.

Its awsome that while every other country in the world subsidies its public housing these guys have discovered now that we don't need to. Hopefully they have found a way to increase rents via market distortion, that we as property investors have failed to do. Good on them, they might not be totaly useless.

[Halfway To Paradise]

Sorry for posting on wrong thread. I can't find the relevent thread I originally read. A while ago I read comments on proposed changes in next budget concerning PI. The suggestion was to e-mail John Key, and there was some discussion about expected replies. Anyway about a week ago I emailed John Key. More than 80% of my e-mail was against the attacks on property investors and how if we are worse off after the budget for trying to invest for our retirement, our family will no longer be National voters. Less than 20% of my e-mail supported the proposed GST changes.

Guess what their reply focussed on? Here is the reply recieved 1 week later:-

On behalf of the Prime Minister, Hon John Key, I acknowledge your email concerning the proposed increase in GST.

As the issue you have raised falls within the portfolio responsibilities of the Minister of Revenue, I have forwarded your email on to the office of Hon Peter Dunne for his consideration.

Regards,
Briane Smith
Private Secretary, Office of the Prime Minister

[CJ]

Hopefully that means property is off the agenda.

Wishful thinking in my opinion.

[Clark Kent]

Sorry for posting on wrong thread. I can't find the relevent thread I originally read. A while ago I read comments on proposed changes in next budget concerning PI. The suggestion was to e-mail John Key, and there was some discussion about expected replies. Anyway about a week ago I emailed John Key. More than 80% of my e-mail was against the attacks on property investors and how if we are worse off after the budget for trying to invest for our retirement, our family will no longer be National voters. Less than 20% of my e-mail supported the proposed GST changes.

Guess what their reply focussed on?

Here is the reply recieved 1 week later:-
On behalf of the Prime Minister, Hon John Key, I acknowledge your email concerning the proposed increase in GST.

As the issue you have raised falls within the portfolio responsibilities of the Minister of Revenue, I have forwarded your email on to the office of Hon Peter Dunne for his consideration.


Regards,
Briane Smith
Private Secretary, Office of the Prime Minister

I got the same email after i sent an email to Johnny Key.

[Contrail]

GST increase to 15%
Stop people using investment loses to get WFF
Stopping depreciation on rental properties

There seems to be a lot of pressure on John Key to make sure everyone gets a decent tax cut. This suggests the depreciation changes might be quite big.

Should be interesting.