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The Week in Tax: fringe benefit tax, how workable is the Greens Party's wealth tax? And is unemployment insurance on the cards?

The Week in Tax: fringe benefit tax, how workable is the Greens Party's wealth tax? And is unemployment insurance on the cards?

The new car sales results in July turned up to be something of a surprise, with 8,400 new passenger vehicles sold, which was more than 3½% higher than the corresponding July last year.  However, overall passenger new car sales are down 23% over the first seven months of July of this year, which makes July's results seem very strong.

What caught my eye about these results was that SUVs represented 77% of the new cars sold in a month. That's the highest ever. Sales of SUVs have been growing in popularity for a variety of reasons. And one particular subgroup which has had strong growth in sales is the twin cab ute.

This brings us back to the question of the fringe benefit treatment of twin cab utes. This is a topic which we're going to hear plenty more about as Inland Revenue gets round to thinking ‘You know, maybe we might need to collect some tax to pay for all this support we're providing to the economy’.

Fringe benefit tax (FBT) is calculated in one of two ways. You can either take 20% of the GST inclusive cost price and apply that to the vehicle, or you can take the motor vehicles tax value, which is the original cost less the total accumulated depreciation of the vehicle as at the start of the relevant FBT period. That latter option, the cost price, comes down to a minimum FBT value of $8,333.  You then tax the resulting value at the FBT rate, which generally speaking is 49%.

Now, just as an aside, the SUVs represent very good value for money, particularly twin cab utes. For $30,000 you can get a reasonably well spec’d vehicle. And this is one of the problems that electric vehicles which represent an insignificant amount of new car sales is they're expensive. Consequently, because they're expensive and FBT is driven off the vehicle value, it means that unless a company has made a very big commitment to the use of electric or hybrid motor vehicles and imposes some fairly stringent rules around their private use, hefty FBT bills will ensue. So, this is a major disincentive for their purchase.

Coming back to twin cab utes, the myth has been around for quite some time that these, if properly signpainted, represent work related vehicles and are therefore exempt from FBT. There's plenty of anecdotal evidence I've discussed before about widespread non-compliance or non application with the rules around work related vehicles.

Inland Revenue hasn't said anything publicly about this although we understand in the background an initiative was under consideration, before COVID-19 rather took its eye off the ball.

But a key point, which people must understand, that if a vehicle is available for private use other than travel from home to work or incidental travel, then it is not a work related vehicle, even if it is sign-painted.  It is therefore subject to FBT. This is the bit which I think is going to potentially trip up a lot of tradies and other users of twin cab utes. You have to make sure you are compliant with the FBT rules around private use, which are pretty stringent.

As I said, this is a matter that I have talked about beforehand. Inland Revenue’s tools for dealing with this are much stronger now because it actively searches social media. At one tax conference an Inland Revenue represent said that if it saw someone put a photo on Facebook about going fishing and showing the ute towing a boat, it would happily drop a quick message through the myIR system to the effect of ‘Hey, we see you're enjoying your fishing. Did you make sure you complied with the FBT rules?’ That's very Big Brotherish, but it's what it can do.

And so, you can't say you've not been warned. I expect that we will start to see a significant increase in Inland Revenue investigations of FBT for the work-related vehicle exemption and twin cab utes.

The Green Party wealth tax plan

Moving on now into the election season. And some of the parties have released their tax policies. Others will either not do so or have already made it clear, as National has, that they don't propose tax cuts or tax increases.

But the Green Party came out and announced as part of their Poverty Action Plan, a proposed wealth tax of 1% on net worth above $1 million and 2% above $2 million dollars net worth. (This is per person, by the way.)

Writing this week in the Herald, former member of the Tax Working Group, Professor Craig Elliffe, took a look at the Greens policy.

He noted that when things settle down, there's quite likely going to be a requirement for more taxes to pay down some of the government indebtedness. And noting that the Tax Working Group itself had suggested that the tax system needed to look at the taxation of wealth and capital, Professor Elliffe then looked into the Greens proposals and raised the question whether a wealth tax was the best form to deal with these issues. And his short answer was no.

The whole article is well worth read. Professor Elliffe pointed out that wealth taxes have declined in use: 12 OECD countries had a wealth tax in 1990, but only three, Norway, Spain and Switzerland retain them now.  Add in Argentina and we're talking about only four countries of any substantial size having a net wealth tax. You do, however, find plenty of transfer taxes, such as inheritance tax gift duties.

And most of the OECD members also have a capital gains tax, although Professor Elliffe, for fairly obvious reasons, shied away from mentioning that.

Wealth taxes don't raise much revenue was another of his arguments. And then there's the whole question about tax integrity, what would happen in terms of tax planning, if attempts were made to introduce a wealth tax. I think that's a very valid concern.

He also raised the question of jurisdictional flight. People may move out of New Zealand and move assets into and out of New Zealand and try and attempt to limit the wealth tax. All that is perfectly valid. But I can't help but wonder whether the days of the tax havens sheltering vast amounts of wealth, trillions of dollars in fact, are actually numbered.

Every country around the world now faces major pressures on its balance sheet, with lower taxes and greatly increased debt. So, I'm beginning to think that we may see, just as we did in the last 10 years with the introduction of the Common Reporting Standards on the Automatic Exchange of Information a concerted move to end tax havens.

And that won't happen overnight because obviously there will be very significant interests pushing back against that. But governments will probably look at the issue and conclude we cannot have trillions of dollars of assets stashed away where we can't tax it at a time of such severe strain on our finances.

Now, Craig Elliffe finishes his article by noting

In summary, there is likely to be a strong need for tax revenue and standing back from the New Zealand tax system the under-taxation of capital is an issue for the variety of reasons set out in the Tax Working Group's interim and final reports. Is a wealth tax the answer? I don't believe so when there are other alternatives.

Coincidentally, the same week, same day, the Financial Times published an article which basically said higher taxes are coming.

The article argues the paradigm that we've operated under for the last 40 years since 1980 of relatively low taxes and smaller government has been broken.

Since March, governments have rightly embraced enormous deficits to limit the collapse in economic activity, protect incomes and sustain employer-employee relationships. As a result, public debt burdens are rising everywhere to levels not seen for many decades, or even ever before. According to the OECD, many of its member governments could add debt worth 20 to 30 percentage points of gross domestic product this year and next.

This is going to force a simple choice on just about every government. They can tolerate the high debt burdens indefinitely, rather than try to bring them back down to moderate levels. Alternatively, they can permanently increase the state's tax take to balance the books and start whittling down the debt. Either way, combining "responsible" policies on both debt and tax burdens is no longer an option…We may have to jettison both and learn to live with permanently higher public debt and permanently higher taxes.

The article goes on to cite the example of Japan which in 2000 had a debt to GDP, a tax to GDP ratio of 25.8% which was then well below the OECD average. This has now risen to 31.4%, which is still below the OECD average of about 34%.

And the article notes, “if Japan is a harbinger of the future for all rich economies, then expect public debt to stay high and taxes to move higher”. So that's going to be a reassuring thought to be considering when we listen to what the politicians talk about tax going forward.

An unemployment insurance scheme coming?

And finally this week, something interesting popped up, which was also slightly related to a Green Party policy in relation to ACC. Grant Robertson, the Minister of Finance, raised the idea of a permanent unemployment insurance scheme.

Now, this is something that the ACT party has also advocated. As the Productivity Commission noted most OECD countries have some form of employment and unemployment insurance, which people can draw down for a set period of time if they lose their job. This tends to help people in employment on middle and higher incomes,

We don't have unemployment insurance at the moment. Instead we have Jobseeker Support, which at $250 a week is substantially well below what the people who've just lost their jobs were earning. And that is why the Government introduced a special package for people who have become unemployed as a result of Covid-19 since February, basically paying them close to double what’s available under Jobseeker Support.

Another option might be to significantly increase benefits, which is what the Welfare Expect Advisory Group recommended. But that, of course, means putting more strain on the government's finances which leads us back to the question of whether higher taxes are needed.

And on that bombshell that's it for this week. Thank you for listening. I'm Terry Baucher and you can find this podcast on my website www.baucher.tax or wherever you find your podcasts. Please send me your feedback and tell your friends and clients. Until next time, ka kite anō.


This article is a transcript of the August 7, 2020 edition of The Week In Tax, a podcast by Terry Baucher. This transcript is here with permission and has been lightly edited for clarity.

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73 Comments

14
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The Tax Working Group rejected a wealth tax (asset tax) as well as land value tax. The idea of the government charging people rent for their own property is a nonsense and would never be accepted by the New Zealand public.

Any alternative suggestions?
It's all very well to say the NZ public won't like something, and kick the can down the road.
Higher income taxes at mid to high incomes?
I would like to see an ultra punitive fuel tax, compensated for by no income tax on the first 25k of income.

Post recovery, a combination of changes to income tax, GST, inheritance tax and CGT. As well as reduced government spending.

But taxing assets is anti-capitalist and technically flawed. Also immoral.

What would you reduce govt spending on?

I'd increase spending on health, particularly mental health. Also education.

As for the chopping block, I'd start with PGF. Also the accommodation supplement - it is a subsidy for landlords like myself :-). I like ACT's plan to cut subsidies to the racing industry and Hollywood film studios. KiwiBuild. Probably fees-free tertiary education, but would keep fees heavily subsidised and loans interest free.

Fair enough. But those increases and cuts won't offer much savings.
Then what?

I think it would be a mistake to cut the PGF, it's made some useful seed contributions in the regions and if it was a bit more focussed it can do more. Subsidies to the Racing Industry are worthwhile as it is a lucrative taxable industry providing quite a decent number of jobs. Ditto for the film industry. Reducing the fees free education would be worthwhile and might focus people on more marketable degrees. Personally I'd drop the tourism subsidies (they are lame duck industry for the foreseeable future). I'd write off any dept paid by the RBNZ to Treasury, after all it's NZ lending to NZ. Reduce or cut NZSF contributions temporarily (say 5 yrs) and raise the eligibility age to 67 progressively over the same time period. I'd also cut eligibility to those still in the workforce post 65 who are earning higher than 75K gross.

All really good points.

Thanks Kate

Yep your last point is salient. An easy target and will hardly be unpopular with the great majority of tax payers. Mechanism is simple. A new tax bracket that claws it back each 31 March year end. QED!

What subsidies to the Racing Industry? Just green eyed bull---- What about all the economic benefit to the Economy income tax Gst export earnings. No free lunches cut out interest free loans user pays education fees .Too many losers in the Country

reduce all government spending down to zero

Taxing people after they die is kind of a hard sell, also taxing income again after it has been taxed when it is earned is rubbish too. People usually justify adding taxes in NZ on the basis that 'other places have them' but usually ignore things like the thresholds they kick in at ($5m+ in the US in some cases) nor has it done anything to stop the rise of the plutocrats, or a divorce of Wall St from the Main St economy. And what will we have to show for it? More jobs in Wellington, more money from those who do work to those who won't and a public service that gets paid no matter how impotent they are, where any problem can be solved with more PR and Comms staffers instead of people with technical skills?

Nah, not buying it. Prove we won't be throwing good money after bad before you add anything further to the tax burden of the extremely small pool of net taxpayers this country relies on.

Why would anyone having a problem with being taxed after they're dead? The whole point is you're dead.

All taxes have problems with them, what you need to do is find the least bad options.

A 50% inheritance tax on amounts over a million bucks is probably about the most equitable tax on the table. Inheritances are unearned by the recipient by definition, so there's little moral argument against a high tax.

So you would happily pass 50% over to the Govt instead of seeing it go to your descendants? That position makes the Greens envy tax look almost generous and equitable. You seem to not understand things such as estate taxes. Besides an inheritance tax is easily avoidable by Trust mechanisms

I would have a problem because the corpus of what I leave behind has been taxed as income when I earned it. The state has already benefited from the work I did in life to earn that money when it taxed me the first time. Morally, the state has no extra right to someone's money just because they have died. You're trying to conflate the idea that a bequest is 'unearned' as if it is a gift. These are different concepts.

My question is: what does the state need to provide to me in death that it requires 50% of what I leave behind (this would be one of the highest inheritance taxes in the world, btw) that I cannot give to make my children's lives comfortable, or give them a chance to pay down a mortgage, or enough that my partner can live off dividends and interest? If anything, I would be making them less dependent on the state so I'm doing everyone else a favour. Please explain to me why people who won't work have more of a right to my family's possessions than they do? On what moral grounds can that be justified?

Incentivize increased productivity, privatize Govt depts that either fail to deliver or whose services can be better delivered by the private sector, reduce Govt dept waste,get better value for Govt spending.

All perfectly sound ideas, but I wonder if any Labour government would seriously pursue such policies. I seriously doubt that.
Unfortunately, there does not appear to be a promising alternative: National is on a self-destructive path (the latest move with Brownlee going full "tinfoil hat"), the Greens are a bunch of dangerous loonies who think that money grows on trees, NZ First is not even funny as a joke.
I really don't know what the heck I am going to vote for.

I understand and agree with the rationale behind this proposal, but an ultra punitive fuel tax will stoke inflation. Yes I would increase fuel tax as part of a comprehensive tax package, but not to such an amount as to create significant inflation.
I also do not see that urgency is warranted when it comes to reducing public debt: it will still be much lower than the large majority of OECD countries, and perfectly sustainable especially in a low rates and ongoing QE environment. Rather than reducing debt at all costs, I would focus on just keeping it under control once the Covid emergency is gone.

They already pay rates, although admittedly grudgingly

More of a fee for council services. But yes, I think there are much fairer and more appropriate alternatives to the current rating system.

I commend the mental gymnastics that some individuals are capable of. Some people think quadrupling council rates (a proxy for LVT) would solve the housing crisis and incentivise efficient land use.

Apply rates to the land value only and not the improvements will also incentivise better use of land.

Let's also apply an annual tax to every bicycle to incentivise efficient use of bicycles. Let's also introduce a poll tax so that people make efficient use of their time.

I invite you to go live in a Singaporean shoebox as a serf to your government landlord and practice mental gymnastics to your heart's content. Not here though, please.

I'd be all for this in the urban setting. Rural rates are a completely different story. I recall a farmer once saying that he milked for the mayor for the first three months of the year - if true (i.e., his rates equated to 1/4 of his annual profit) that's a pretty hefty chunk given most rural landowners have no connection to water and wastewater services - and the libraries, swimming pools and playgrounds etc. are concentrated in the built up (non-rural) areas.

So what are the actual things council's do for rural ratepayers? I think their largest rural costs are in many cases flood protection and environmental monitoring/management. Land value rating is fine - as long as a substantial rural differential is applied to the land - something that reflects as best as possible a user-only pays system. To my mind, a lot of councils have unfairly applied rural differentials to the advantage (i.e., effectively a subsidy) of urban ratepayers.

But that's just anecdotal evidence on my part.

Well Kate I'll give you perspective from a rural owner. My local council this term set a rate increase of 3.5%, which I didn't think was too onerous. When I got this years rates demand I found it had gone up by 20%. I receive no council services at all. Many years ago rates were about 1-1.5% of gross property value - now it's closer to 4% but I don't see an increase of 300% in council services, quite the contrary to be honest. The local town's infrastructure is under strain (for no good reason other than neglect - we've not had a significant population increase), our local roads (non state highways) are poorly maintained and their user pays charges keep increasing. Any central Govt party that pledged to rein in LG excesses would get my vote in a heartbeat

you must live around here? Hawkes bay regional council, didn't go for a big increase %8 I think but they then brought forward payment from Feb to September which is equivalent to a %50 rate increase, so %58 from HBRC, go the bay.

I'm in Eastern Bay. WDC is our council. My gripe is they've already had the benefit of increase valuations and then the greedy hua's want another bite

We recently received a breakdown of our rates expenditure from our local council - what could be termed core services accounted for 51% of the total, which implies that non-core services accounted for nearly half; or put differently, if the council focused solely on core services our rates bill could be halved. Dog parks are not a core service.

Combine a Universal Basic Income with a poll tax to pay for council services. Taking a hypothetical $100pw benefit reduced by roughly what my rather average family pay in rates per head and the $100 shrinks to $80. That would get the vocal poor and most students complaining about council spending and council salaries and council subsidies for the arts.

The Tax Working Group had terms of reference that explicitly said no tax was allowed to be applied to the family home or the land underneath it.

That meant that land taxes and wealth taxes, and actually the CGT itself, were non-starters since they'd be excluding the single largest source of wealth that NZers have.

Take those restrictions away, as they didn't apply for the 2009 tax working group that National set up, and you get the same result that National's group proposed - a land tax. National of course ignored this recommendation and just put up GST for everyone and gave a big tax cut to the rich that they funded with asset sales.

Maybe raising GST to 17.5% on everything bar fresh or unprocessed food.

I've worked on software for processing GST and I learned never ever allow exceptions. You will end up with no GST of a chicken but GST on pieces of a chicken. The only good GST exemptions ever did was to persuade English young ladies to buy children's skirts - the origin of the mini-skirt. Maybe that was good for men; I have sisters who regret having exposed their fat legs to English winter because it was fashionable and GST free; now they hide their old photos.

Nothing wrong with exemptions if they're on categories that have easy and straightforward definitions and delineations.

For example exempting menstruation products or council rates or 91 unleaded petrol.

And if it's too hard from a POS software point of view, implement a scheme of refunds via IRD for people prepared to save receipts and make the claims. Relatives I have in Florida used to do this as the state must have had some exemptions from state sales tax. I found it odd that they bothered, given they were quite wealthy people, but of course, prudence is a virtue - so good on them.

Exemptions on gst are applied in many countries, I find NZ's allergic reaction to them bizarre.

As Lanthanide says the exemptions work if they are structured properly. The chicken pieces you mention would be classed as unprocessed due to them being in a raw state, as would mince. let's face it - the average punter isn't going to buy a whole cattle beast or pig or sheep. The structuring is where the detail is important and that's what we (taxpayers) employ bureaucrats to do - structure things so they are workable and equitable

More bureaucracy is not the answer

Henry - most of the time bureaucracy is a major part of the problem.

TWG rejected LVT

Try reading what I wrote.

Likewise

Well if you want to be that way.

Here's the working paper of what the 2018 tax working group considered with regards to a land tax: https://taxworkinggroup.govt.nz/sites/default/files/2018-09/twg-bg-39649... pages 19 and 20

A broad-based land tax that applies to all land, except public and conservation land, and the land under the family home.

Here's their final report: https://taxworkinggroup.govt.nz/sites/default/files/2019-03/twg-final-re...

On page 121 their terms of reference:

Whether a system of taxing capital gains or land (not applying to the family home or the land under it), or other housing tax measures, would improve the tax system;

On page 16:

The Group does not recommend introducing a land tax.

They rejected a land tax because of the narrow scope of reference that prevented them from considering a land tax on all land. They were explicitly told to exclude land under a family home from a land tax.

This is exactly what I said in my comment but you implied that I was wrong when I'm not.

We agree that TWG rejected LVT.

So many technical issues with LVT. Also, Maori won't accept such insanity, noted by the TWG. The Crown charging Maori rent for their own land? Not going to happen.

I don't agree the TWG rejected LVT.

I agree that the TWG rejected LVT that excludes the land under the family home. They aren't the same thing.

Concerns of Maori was another reason they rejected it. But reject it they did.

Who gives a $#%^ about the TWG. It's one perspective based on a certain brief.

The Greens fail to describe how exactly the government would collate, record and audit the individual criteria that would attract a wealth tax. Would they just single out and go after those “perceived”to likely have such wealth or would every NZr of age and means have to submit an annual return of the value of all that they own. Whatever it might be it would require the government then, to maintain a dossier on each individual’s said possessions with the power to audit that, which would then have to include right of access to inspect and record, as relative, assets of interest in any one property and/or home. That in itself is an invasion of privacy beyond the pale, not welcome in NZ past, present and future and it beggars belief that a political party could have the gall to promote it as such.

Doesn't it apply to Accommodation allowance? Possess less than $8,000 and you can get up to $305pw (or $15,860pa) and save more and you get nothing. It applies to a daughter of mine who had a savings joint account with her two sisters - total over $8,000 so she got no accommodation allowance despite her share being miniscule. The IRD can see our bank accounts - they get details of withholding taxes.

True IRD can easily enough get close enough to identifying the capital by working backwards from income declared thereof. But that is a world away from being empowered to come looking for it. For example if you should sell a $100k worth of bonds and just keep it in a non interest earning current account, or cash in a safe deposit box. Therefore any enquiry resultantly is going to have to delve into and establish, the fate, whereabouts and circumstances of those funds and all other relative assets. That is big brother connotations, Orwellian in design.

"Whatever it might be it would require the government then, to maintain a dossier on each individual’s said possessions with the power to audit that, which would then have to include right of access to inspect and record, as relative, assets of interest in any one property and/or home. That in itself is an invasion of privacy beyond the pale, not welcome in NZ past, present and future and it beggars belief that a political party could have the gall to promote it as such."

The Labour Government and it's armed thugs (NZP) have already got this in place right now, right here in NZ. I refer you to the Arms Amendment Act. It's a slippery slope and personal property is personal property whether it's a historic firearm or your hard earned. Bugger being 'Kind', be afraid.

It's funny when the Greens try and talk economy.
This is just another pie in the sky dream much like the $5 petrol they wanted. Great to see them still rolling these out so they don't get any major political clout.

There is a very good reason why twincab utes are not taxed as SUV's ...............they can carry a crew of 4 or 5 people PLUS their tools to a worksite in a single vehicle.

This is not America or Asia or Africa or the Middle East where you are allowed to ride around on the back of an open ute

There is not much a double cab Ute can do that an SUV can't. The tray is tiny, and usually a canopy or hard top turns it into an SUV anyway.

10
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I have long held the view that environmental issues should not be politicised , simply because the only loser is the environment.

We do not need a "Green Party ' , and instead we should have an Environmental Protector or ombudsman who is totally focussed on environmental issues.

Such a person should be free of political influence or shackles , like the Governor of the Reserve Bank , or the Children's commissioner .

If the Greens were truly concerned about the environment , they would stick to their core , and I would likely vote for them .

The problem is they are the extreme radical lunatic left , and we should get rid of them .

Hadn’t realised how gifted you were at understatement, that is, until I read your last sentence.

We do have such a person Boatman - Parliamentary Commissioner for the Environment
As for the Greens - Chloe will be out and about offering free hooch to anyone who voted for her in Auckland Central

Our Green Party is a socialist party in environmental drag.

That pretty much sums them up.

Terry's articles are always a great read.

Tax has to change in NZ. To few working and to many retired is almost upon us.

We need to promote productive effort (working), and disincent farming idle speculative debt. That means lower income tax and a new land tax paid quarterly all of NZ (extra for foreign owners).See TOP tax policy. Note that banks and leverage specuvestors (Nat supporters and funders) will be extremely against this sort of tax base change. Land tax is all but impossible to avoid, and is simple.

We need to significantly slow immigration untill we have a infrastructure strategy to support it. That equals transport, housing, schools and healthcare. Last two govts just used immigration to boost asset prices, which has created huge inequality in NZ, and super bank profits. Who does the govt represent again. See TOP immigration policy. NZF talk big, but has not walked in this area. #misrepresentation

We also need to really stomp down on meth, and all the fingers making money out of it. Meth is driving a significant amount of crme in NZ, and a significant of our mental health issues. Those caught selling, manufacturing, importing, or supporting it (lawyers etc representing the gangs) should get mine clearance duty in Iraq or similar.

Note that more people working and having a productive routine will generate better health and mental health outcomes as well.

Under the false colours of rates local government have already flogged that horse to death. For example in Christchurch elderly relatives pay twice the rates of their immediate neighbours, Same sized house and section, same street frontage, exactly the same cost of services. The only difference is they have an EQ rebuild, for no fault of their own and which they certainly didn’t go looking for. So they pay twice as much for exactly what? If that is not a stark staring naked wealth tax then don’t quite know what you would call it then.

I'm guessing CCC has a large proportion of the rate charged as a General Rate (as opposed to fixed price per household or connection) and they must use Capital Value (not Land Value) as the basis of the General Rate calculation?

Yep it is based on the GV for residences. Strip away the niceties and obfuscation, the higher your property value the higher cost of your rates. We have been told there is nothing in kitty, the cupboard is bare. Rates go up 3.8% to protect essential services. Yet the council owned airport spends $45 mill to buy bare land in central Otago as a punt on one day maybe, building an airport. Where did that money come from then. Since when has an airport in Central Airport been an essential service for Christchurch. Steam, let off!

Agree that taxation needs to change, but disagree that it is simple. Valuing land is not that easy. Do you value it in its current state or its potential state? Does zoning affect the value? If so is it fair for someones tax bill to increase substantially because the local council changes the zoning?

Potential state. Zoning always effects value. Forces development where zoned and thus eliminates the speculation called land banking. Those sitting on hi density zoning waiting for god can pay, or take the cash and move.

Ha. Good luck getting boomers who are now grandparents and who want to be close to their kids signing up to be punitively taxed for the crime of owning a house in a major city or being forced to the regions where healthcare and aged living support is non-existent.

Council already rating at the potential level. This forces development vs stalling it. End of the day oldies get a massive cheque because their all but empty 3 bed house can now provide for 16 floor appartments.

I think that's a great idea Averageman.. as long as it is restricted to within the urban limits. An urban solution to an urban problem.. gets my vote

I think it will create a whole new type of NIMBY - the NIMY (not in my yard). Who’s going to want their tax bill doubled at the councils whim?

FBT is not the only option for 'UTE' owners who use a business vehicle for personal use. You can as a business owner elect to use expenditure rules as long as you qualify as a close company and only have 1-2 vehicles for shareholder employees. This means you don't have to pay FBT but you must (should) maintain a log book. Small business owners should already know this. So, in my case I'd happily take many pictures of my UTE towing the boat, caravan and jetski and plaster them all over Facebook if I actually used Facebook, which I don't.

So pretty well every farmer in the country will get a shock if the IRD really start policing FBT rules.
I know our accountant still tells us that as long as we have one privately owned vehicle per household then we can get away with not paying FBT.
Though I actually don’t use my farm ute for personal use if I can avoid it, the family SUV is vastly nicer to drive than the Ranger.

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