Editors choice comments
Many investors are aware and don't care of the requirement to pay tax on profits made if the house was bought for the intention of resale (the IRD would classify these people as being on revenue account and thus taxable vs capital account). It's like filesharing from New Zealand, or antelope crossing a river in Africa - the sheer weight of property tax avoiders hugely outnumbers tax inspectors and the reality is they probably won't get caught.
Let's put some numbers behind this.
RBNZ C31 which shows mortgage lending by borrower type shows at that 30% of all mortgages are from property...by: Keyser Söze
Deemed rates of return are, au contraire common taters above, quite common in certain areas: shares, utility companies (airports, electric generators etc).
So there's a body of experience, case law, and a general acceptance that sometimes, blanket ROR's, however arrived at, are preferable to the alternatives.
And it is a step towards GM's Big Kahuna - if applied to residential property....
New Zealand has a housing bubble no matter how much John Key or others deny it.
According to this study:
1-In relation to incomes, rent haven't grown much
2-House prices, however, have increased so much that they would require a 33% drop to be aligned to rents and incomes. Hence they are overpriced and we are seeing a bubble getting out of control.
3-At current prices, there is a 2.8% rental return. So buying a house to rent it out makes little sense as an investment considering that by just putting this money into a savings account you already get 4.3%
So.. my conclusions on this:
1- THERE...by: muntijaqi
Is it 2003 again?
Let's just cut interest rates while house price growth hits double digits...
Very clever to remove house prices from CPI in 1999.
Tiresome .. boring .. the battle lines are drawn .. out come the guns .. the tame rubber-stamp influence-peddlers have been tapped on the shoulder .. coming out and putting words in Spencer's mouth that he did not use .. he said "tax preferred status" yet in the brief space of a few days Nick Smith, Makhlouf, Reddell, and now the next blow-in Hartwich denigrate Spencer by translating Spencer's english into Swahili, accusing him of saying "capital gains tax" which he didn't say
Every single one of them did it - is that orchestrated or not?
by: two otherguys
#2 Benje - yr too negative, get with the program: the solution is that the Councils should own an Airline too to go with their (and infratils) nice new runway.
Hmmmm - Insurance and Superannuation classification up 23% - is this a reflection of Cam Preston's observation that insurance companies are "transfer pricing" costs to the local jurisdiction whilst retaining associated profits offshore?
There is certainly a need to investigate NZ Stats data collection for insurance costs in the CPI release. Under recorded weighting data may need to be reveiwed to properly reflect the costs NZ'ers incur.
The ‘net’ approach sees the cost of insurance as being the cost associated with the provision by the insurance company of the administration of a risk-...by: Stephen Hulme