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Poll: How would ring-fencing of residential rentals affect you?

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  1. #891
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    May 2008
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    Default

    Safe journey.
    Do send us the occasional postcard.

  2. #892
    Join Date
    May 2007
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    Hamilton
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    Quote Originally Posted by Bob Kane View Post
    https://www.stuff.co.nz/business/113...-rise#comments



    A year later and we are seeing the consequences of the Labour/Greens attack on property investors.
    And the stupid people who keep saying "you can't increase the rent if the tenant can't afford to pay it" have been proved wrong.
    Also proven wrong are those people/politicians who think an investor selling up won't effect renters.
    One less rental means one tenant homeless - 3.5 tenants per rental, 2.5 residents per home.

    Upper Hutt landlords will be smiling:
    A little of this could be consequences, but a lot is just supply and demand!
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  3. #893
    Join Date
    Sep 2004
    Location
    Hastings
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    14,757

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    Loss ring-fencing ups war on renters and owners

    The largely unreported end of the ability of rental property owners to claim losses against other income shows that the Government is unaware of the scale of the problem it is creating with accommodation, Tenancies War spokesman Mike Butler said today.

    The Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration and Remedial Matters) Bill quietly became law while we were distracted with a Cabinet reshuffle that demoted Housing Minister Phil Twyford.

    Under the vague sub heading “Allocation of deductions for excess residential land expenditure”, the omnibus tax Act:

    (a) limits a person’s deductions for expenditure incurred in relation to residential land to income derived from the land;

    (b) suspends deductions for the excess expenditure for the income year in which the expenditure is incurred;

    (c) provides that the excess amounts are carried forward to later income years in which the person derives residential income; and

    (d) releases the excess amounts on fully-taxed disposals of land.

    Inland Revenue said in various statements that 116,000 owners declared an average loss of $7138 ($137 a week) on earnings in the 2016/17 tax year, bringing an average tax benefit of $2000 a year to each, creating a total cost of $232-million to them.

    “The Minister responsible for this, Revenue Minister Stuart Nash, is probably unaware that losses accrue at the first stages of a property investing career, and that as debt is reduced and income increases, investors become taxpayers, with some paying tens of thousands of dollars in tax each year,” Mr Butler said.

    “Rental property owners who are losing money now face a choice -- raise the rent to cover the loss, absorb the loss to apply it in the future to any profit, or sell,” he said.

    “With rents at historic highs it is unlikely owners could add an average extra $137 every week to rents,” Mr Butler said. “This means owners must choose between hanging on or selling,” he said.

    “The short answer is to sell, with stand-alone dwellings going to first home buyers.”

    “With loss-making owners selling and the prospect of an extended and more fraught period of trading at a loss creating a barrier to new investors, the Minister has just sped up the reduction of the supply of rental property,” Mr Butler said.

    “As a result, rents will continue to rise and homelessness will increase,” he said.

    The problem for everyone is that the Government is in denial that the policies it is enacting to solve a housing crisis are making the crisis exponentially worse, Mr Butler said.

    Labour, New Zealand First, and the Green Party voted in favour on the third reading of the bill on June 20, while National and Jamie Lee Ross voted against it. Hansard has no record of a vote by the ACT Party.


    Stop the War on Tenancies is a group that since last October has been highlighting the evidence that successive governments have ignored while creating rental property policy.

    Contact:
    Mike Butler 27-277 7295
    [email protected]
    With all the Draconian new laws for residential rental LLs, perhaps AirBnB would be better? To avoid any hassle in Hawke's Bay, consult Be My Hostess. Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  4. #894
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    Jun 2004
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    Seems the winner, according to Mike, will be first home buyers. Not a bad group to have as winners.

  5. #895
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    Sep 2004
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    Hastings
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    But only if they can afford the deposit, payments, etc.
    With all the Draconian new laws for residential rental LLs, perhaps AirBnB would be better? To avoid any hassle in Hawke's Bay, consult Be My Hostess. Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  6. #896
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    Jun 2004
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    10,313

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    Quote Originally Posted by Perry View Post
    But only if they can afford the deposit, payments, etc.
    If they can't then someone else will buy it - or it won't sell.
    I'm only responding to what Mike said - he could be wrong and other investors (more cashed up) will buy it.
    Maybe his crystal ball is better than mine.

  7. #897
    Join Date
    Sep 2004
    Location
    Hastings
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    It is crystal ball territory, indeed, but the more-people-in-each-rental-house versus less-people-in-each-owner-occupied-house is still a nasty spectre that the reds seem unable to comprehend.
    With all the Draconian new laws for residential rental LLs, perhaps AirBnB would be better? To avoid any hassle in Hawke's Bay, consult Be My Hostess. Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  8. #898
    Join Date
    May 2008
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    3,528

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    Quote Originally Posted by Wayne View Post
    Seems the winner, according to Mike, will be first home buyers. Not a bad group to have as winners.
    Can't have the tenants winning, aye?

  9. #899
    Join Date
    Mar 2013
    Location
    Auckland
    Posts
    1,663

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    The thing is, this will mostly affect the high-entry markets like Auckland, Queenstown, Tauranga etc., where a lot of would-be FHB are priced out. In those markets, where yields are so poor, the only really viable strategy for PIs buying in recent times has been the 'prop up and wait' game.

    Now that the 'propping up' part has become somewhere from more painful to totally unsustainable (depending on individual circumstances) many currently subsidising their tenants will now be unwilling/unable to 'wait.'

    What this will do to markets that already suffer from a chronic shortage of affordable rental properties, is to be seen. But I doubt it will be pretty.
    My blog. From personal experience.
    http://statehousinginnz.wordpress.com/

  10. #900
    Join Date
    Feb 2013
    Posts
    339

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    RF may also be a saviour for many , forcing to rethink strategy by not buying highly leveraged properties, blessing in disguise should another GFC type crises hits.

    But many will still buy these because of the attractiveness of CG, if your properties increase by 50% in say 5 years, you are a lot ahead then buying a cash neutral property somewhere in a small town.
    Last edited by BlueSky; 11-07-2019 at 10:22 PM.


 

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