Just to point out how misleading stats can be, the following.."Affordability worsened most in Wellington, Nelson/Marlborough and Canterbury as median house prices rose to record highs despite low turnover..." fails to note that prices fell quite a bit in Marlborough. What do they say about statistics...!

http://www.stuff.co.nz/the-press/news/3252178/IRD-to-target-property-rorts

Inland Revenue is zeroing in on 300 property investors believed to have dodged millions in taxes, including one who could be hit for not disclosing $8 million of profits.

The investors are the top end of a group of 2000 identified as failing to pay $214m in tax on properties they bought and sold in the past four years.

Inland Revenue assurance group manager Martin Scott said the 300 cases under the microscope involved investors who turned over 20 or more properties each during that period.

"We are looking at a number of potential prosecutions, including a case where nearly 60 properties were sold, and income and profit of about $8m was not disclosed."

He did not say how much of the $214m in unpaid tax the 300 could be liable for, but the revenue owing on $8m could be as high as $3m, depending on the investor's tax status.

New Zealand does not have a capital gains tax for family homes, but tax must be paid by people in the business of buying other property to sell for profit. Frequent purchases and sales over a short period is a key indicator of a profit motive.

The other 1700 investors under investigation bought and sold at least six properties each during the past four years.

This decade's preview by Brian Gaynor

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1062...

Yes, agree 28/29. Retirees will have some tough decisions if some of these tax changes come into effect. However, we knew that this would happen... we are going through the largest passing of assets in history, and perhaps it is time to pass on this property to the working, that can afford to pay for the tax. It would be a good time to pass on this property to their children or grandchildren - or sell it to them at a decent (perhaps mroe affordable) price. Certainly makes life easier for the current generation that can't afford. And don't tell me they don't work as hard etc - as we don't want to discriminate upon age too much. ie why retirees should have it any easier than others etc. They could then put the cash into other investments etc.

rob---especially if employers keep paying this sort of money--this is pathetic-
the working man/woman has,t a chance in hell
see wage rate,s bottom page2
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10621612&p...

# Joe Blog Says:
January 23rd, 2010 at 4:22 pm

"Rob The property prices rise fro last 8 years is a global issue. I don't think it is because high earners tried to shelter income tax."

Joe, It was too lower OCR's that started the bubble actually otherwise most people would not of been able to afford a second or third investment property purchase. Now that most world OCR's are as low as they will EVER go then look for the coming disaster wihen interest rates and inflation go through the roof taking many property investors with them, you can't raise rents without wage increases for those at the bottom who generally rent. catch 22. If you do you will get one of two things happen, 6 people living under one roof of your investments or no one at all as the guy down the road will set his rent $10pw cheaper to keep his/your tenants.

28 year old:

Gaynor syas:

"The post World War II baby-boomer generation is expected to be different. This generation will be active and will travel extensively, overseas and domestically. To fund this many will sell the family home and move into apartments or retirement villages, which will be easier to maintain than a suburban home. This strategy will also release capital to fund travel.

Thus the 2010s could be the decade of the apartment, with residential housing prices lagging well behind."

Well articulated. Its one of the reasons why we are going to see a sluggish housing market between 2015 - 2020. Like he implies, suburban housing is likely to stumble, but conveniently located, quality apartments are likely to do well
Petrol prices are likely to soar again too which is another reason that suburban housing is going to stumble

Perhaps 2010's could also be the decade of coastal property and seaside towns? I live in Auckland and if I was a BB about to retire I would want to move to a smaller town on the coast. There's no way I'll stay in Auckland once I'm done with the corporate world.

Alternatively they may end up moving to Aussie to be near their kids and grandchildren.

peterd Says "Don't think it will ever again be as affordable as at the end of 2008"

Yes it will, in the next recession when interest rates get slashed and property prices dip. My crystal ball says 2018, but I haven't polished it for a while....

Also Bernard,

Can you ask the likes of Bill English why they don't just force councils to release more public land for sale or the government itself do this AND set the price(applicable only to first home buyers)?
As land prices are the main hurdle for many first home buyers this would drop overall house pricing to a more realistic level in relation to incomes/wages thus stimulating the economy AND not the housing price bubble for which has effectively created a 'monster' problem for future generations

@crystal ball

http://www.stuff.co.nz/business/3255778/Landlords-bristle-over-tax-claims

However, most landlords are not in it for short-term gain, according to Nancy Caiger. She says if speculators are the target, clarifying the present tax criteria would be just as effective. "I would say a capital gains tax is already part of the system. It's just not enforced properly."

IRD is on to the bad apples, these are the ones messing it up for everyone else.

Answer for Justice. Not sure, probably not majority though.

Your example is just that, AN example.

I know several people all doing it by the book (including my parents), not much money in it relative to work involved.

The system is better to find parasites and deal with them, rather than hit everyone a little.

Once again most will end up pay for a few sorry Made-Off parasites.

I don't think our tax system is broken, just inefficient due to lack of compliance or grey areas in legal taxes.

It will be interesting to see the outcome from the 300 cases IRD are looking at.

If the average is 3 mill on every 8 mill, times 300 is 900 mill plus interest and penalties (if any), and the other 900 families using/ abusing WFF = there's possibly an easy $1 billion.

@rob
Can you provide a link for that Westpac prediction? I remember one about 16% a few months ago. Is this something recent?

Justice. If you know this parasite you should do the right thing and inform the IRD and social welfare for some real Justice. This person is taking money from every hard working kiwi taxpayer and this is not acceptable and we should not tolerate this behaviour by anyone living in this country. These people need to be stopped so do the right thing.

@Roger

"We risk becoming a nasty small-minded.... "
Just read the blogs, my impression is that we achieved this awhile back.

At least I'm beginning to understand how it happened.

Not Roger , Another Clown ! Says:
January 25th, 2010 at 9:27 am

"We risk becoming a nasty small-minded race if we indulge in dobbing others into the authorities , upon our spite or envy over their actions , legal or not ."

The law is there for a reason! What kind of society do we have if we turn a blind eye to those that ignore it? dobbing or not, If i am expected to pay taxes then so should others. If the law is changed and we become a society run by Libertarians then fine also.
Thing is Roger, these parasitic people will still expect a pension when they retire!

Just to back up what i have been saying some of you may find this of interest:

http://www.washingtonsblog.com/2009/07/bis-slammed-federal-reserve-and-o...

Just to clear the air , it is NOT me , commenting at 9:51 on the 25'th.

"If nothing is done, and property prices continue to rise, (which is mainly due to labours 1999 higher tax rate introduction, which has caused people to shelter their real income in losses from their rental properties)..."

There used to be an economic theory about supply and demand determining prices. under this theory if you had a population growing much faster than the supply of houses was growing then the price of the houses would increase.

Thanks to the RMA limiting density this is exactly the situation we are in, but as the 'supply/demand' theory has been thoroughly discredited we now realize that increasing prices are actually the result of a complex tax dodging conspiracy by a multitude of greedy landlords/developers claiming WFF tax credits by intentionally losing money so they can claim back a small portion of what they have lost thereby getting rich on the backs of the taxpayer when they should have been investing in the 'productive economy' (being shares in any company unrelated to the property, building, retail or finance industries) which means F&P or the sock factory in the Hawkes Bay (which might not be publicly listed - so probably doesn't count)