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David Chaston probes how much realised capital gain is being made by landlords and by owner-occupiers, and how much windfall flows to them from their tax-free status

David Chaston probes how much realised capital gain is being made by landlords and by owner-occupiers, and how much windfall flows to them from their tax-free status

By David Chaston

There is a lot of talk about taxing capital gains "earned" by owning residential rental property.

This article is an attempt to put an approximate value on those gains, and the amount of tax that may be available to a government.

In the year to June 2017, there were 1,842,900 private dwellings in New Zealand. Of them, 1,160,500 were owner-occupied and 682,400 were rentals.

Based on the 2013, 2006 and 2001 census data, and other Statistics NZ information, we are able to build an approximate estimate of how those dwelling numbers have grown since 2002, and how they have been distributed between owner-occupiers and renters, nationally, and for the main centres. (To be fair, some of this involves estimates based on other estimates, so there is likely to be inaccuracy involved. But the data is the best we can do with what is available.)

We also know how many real estate sales transactions have happened over this period. And we know the median prices. This data is from the Real Estate Institute of New Zealand.

In addition, from the same source, we have some unique lower quartile data available that can help us get a fix on the end of the market where you are more likely to find rented properties. That market is also where first home buyers start out, so it is not only investors in residential rental property operating there. (It is only very recently, from the Reserve Bank, that we have been getting insights into first home buyer activity. But none of that Reserve Bank data can yet be matched up reliably with the REINZ data).

How much capital gain realised & how much tax avoided?

Because we know this detail, we wondered if we could estimate how much capital gain has been realised in these transactions. And can we therefore get a rough estimate of how much income tax has been avoided by investors who hold rentals?

Having built the relevant data, possibly we can.

This is what it shows: In the year to June 2017, if the average holding time for the lower quartile sales was 10 years (some will be longer, some shorter), then the 10 year capital gain on those sales was about $1.8 billion. Of that, $1.2 billion of those gains were in Auckland, $200 million were in the Waikato, $100 million were in the Bay of Plenty, $125 million were in Wellington, and only $30 million were in Canterbury.

That means that for lower quartile sales only, about $600 million of tax was avoided using this exemption for capital gains, of which a bit less than $400 million stemmed from realised transactions in Auckland.

But the numbers are very much larger for owner-occupiers. For the same timeframe (the year to June 2017) owner-occupiers who sold realised $7.9 billion in gains, avoiding more than $2.6 billion in taxes (that would otherwise have applied if the gains were for anything else). In Auckland the gain was $4.8 billion (avoiding more than $1.5 billion in tax), in the Waikato, the gain was nearly $900 million ($300 million), Lesser amounts are involved in the Bay of Plenty, Wellington, and Canterbury.

Taxing realised real estate gains could have given a 10% across the board income tax cut

Just for perspective, personal income tax in the same period amounted to $29 billion. So the avoided tax for owner-occupiers of $2.6 billion, plus that for owners of rental property of $600 million, represents more than 10% of the income tax taken from individuals. Taxing realised real estate gains could have given a 10% across the board income tax cut.

Or that $3.2 billion could have eliminated income tax for everyone who had annual taxable incomes of $30,000 and below, benefiting almost 1.5 million low income citizens.

There were just 81,000 real estate transactions in that period. Our data shows that 5.3% of all owner-occupied housing sold in the year to June 2017, while only 2.9% of the stock of rented housing sold in the same year. Landlords are only half as likely to sell than owner-occupiers.

A: Ten year capital gains from lower-quartile realised transactions

NZ$ bln $ $ $ $ $ $
2002 1.687 1.007 0.110 0.116 0.231 0.070
2003 2.475 1.410 0.183 0.192 0.286 0.179
2004 2.687 1.441 0.218 0.213 0.310 0.261
2005 2.882 1.320 0.272 0.235 0.327 0.346
2006 3.099 1.157 0.293 0.169 0.414 0.419
2007 3.980 1.582 0.325 0.229 0.473 0.525
2008 2.195 0.747 0.155 0.102 0.258 0.324
2009 1.399 0.401 0.087 0.073 0.123 0.243
2010 2.087 0.874 0.146 0.091 0.196 0.321
2011 1.503 0.745 0.093 0.073 0.147 0.155
2012 1.651 0.784 0.117 0.058 0.122 0.283
2013 1.709 1.038 0.091 0.016 0.141 0.254
2014 1.148 0.889 0.013 (0.029) 0.016 0.155
2015 2.222 1.710 0.055 0.038 0.066 0.151
2016 3.544 2.201 0.433 0.284 0.119 0.193
2017 1.821 1.194 0.202 0.103 0.126 0.030
NOTE: These are only estimates, based on lower quartile prices, actual sales volumes, and Census data for rented/owner splits. The numbers above may look 'accurate' but are derived by calculation and should be treated as a rough guide only.

B: Ten year capital gains from owner-occupied realised transactions

NZ$ bln $ $ $ $ $ $
2002 7.802 4.453 0.572 0.526 1.175 0.365
2003 11.461 6.134 0.812 0.860 1.469 0.795
2004 13.401 6.364 1.078 1.114 1.586 1.156
2005 14.008 5.677 1.266 1.142 1.587 1.419
2006 13.845 4.649 1.297 0.823 1.815 1.558
2007 17.062 6.978 1.357 1.073 1.995 1.946
2008 9.322 3.381 0.678 0.473 1.047 1.257
2009 5.587 1.986 0.395 0.325 0.441 0.976
2010 8.938 4.055 0.633 0.385 0.798 1.314
2011 6.734 3.312 0.387 0.349 0.597 0.587
2012 6.925 3.701 0.438 0.227 0.434 1.115
2013 7.591 5.140 0.352 0.009 0.466 0.950
2014 4.892 4.172 (0.048) (0.283) (0.100) 0.707
2015 9.895 7.767 0.151 0.092 0.296 0.690
2016 16.157 9.783 1.908 1.410 0.688 0.900
2017 7.893 4.839 0.890 0.598 0.583 0.265
NOTE: These are only estimates, based on median prices, actual sales volumes, and Census data for rented/owner splits. The numbers above may look 'accurate' but are derived by calculation and should be treated as a rough guide only.

Interestingly, the transactions to June 2017 now encompass a period where the dollar value of the gains being recorded are falling. Not only are prices past their peak, but transaction volumes are declining too.

If these real estate gains were taxed in this way in the year to June 2016 when both the volumes were much higher and the ten year value gains were also higher, the amounts of tax avoided is much, much higher. In the lower quartile market, the gains were double the 2017 levels. In the owner-occupied market the level was similarly doubly higher. The tax avoided was probably in the order of $6.5 billion.

The nature of the real estate cycles means that any tax on these realised capital gains will be volatile, and therefore may not be suitable as a substitute for regular income tax adjustment. A doubling (or halving) of these tax flows will be very messy for Government budgeting. But they might help in other ways, like paying down Government debt, making some big one-off capital expenditures, or bolstering the NZ Super Fund.

Just a profit like any other

Those choices are however not on the table so long as we regard gains from housing values as something 'special'. They aren't. They are just a profit like any other and should be taxed like any other profit. All gains should be treated equally in my view; the income/capital distinction is arbitrary and hardly justifiable. (On the other hand, I do think the realised/unrealised distinction is relevant. We should not be taxing theoretical paper gains of any sort. But those who favour an assets tax might disagree).

As for a homeowner exemption, other than a sop to voter greed, I can't see the justification for that either.

Treat all gains (and losses) equally in tax law.

(Tax law also makes a distinction between "earned" and "unearned" income. Capital gains are certainly "unearned" having basically just fallen out of the sky. But this is another distinction that is pretty artificial and seems hard to justify).

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Those numbers look like a nice way of calling the bubble peaks in hindsight. A longer time series would be interesting.

This homeowner would vote to self-inflict a CGT (at sale time only) but others may see it differently?

If you pay tax on your home when you sell, it will make it very hard to move up the property ladder to a larger home as your family grows.

We need to be rational in this debate , Capital gain equals capital accumulation , some of the gain will be saved ( GOOD) some will be re-invested in other productive assets (GOOD) some will be spent on non-productive assets ( SORT OF GOOD ) and the Government will get the 15% GST (GOOD) .

Some of it will be used by people like me during our retirement years and we will be less reliant on the State (GOOD).

Some of it may be passed on to our children to help them buy their first home and giving them some stability in their lives (GOOD) .

So the fact is , Capital Gain is not all bad for our economy

Any evidence of this in Australia?

As far as I'm aware, people in Australia move houses when they need to for various reasons.

Good to see the calculation DC. Thanks. My reaction was the potential tax take was surprising small.

Treating the gain on a property sale as if it were a business profit requires deductions for expenses and interest a requirement unless discrimination was legislated otherwise, so the real net profit is probably much less and the tax also less. The other side of the coin of course is tax relief for losses and set off against other income likely to happen in a downturn so a reduction in tax take without similar discrimination to disallow or ring fence.. The political result for a party stupid enough to try this would be to enjoy permanent opposition and possibly permanent occupation of the Treasury Benches for the party that repealed. Now that Labour sees tax as a cure all for everything bring it on Jacinderalla and discover how brutal the real world is.

... we regard gains from housing values as something 'special'. They aren't. They are just a profit like any other and should be taxed like any other profit. All gains should be treated equally

It's been said a thousand times, on this forum and elsewhere, and is THE crux of, and solution to, the problem....

Your last few paragraphs DC almost convince me about a CGT.
But I still can't get taxing something just because you own it. My tearjerking little cottage which I bought to house my roses. Sob etc.
Seriously though, we could get tough on every other situation. Enforcing collection of the current requirements would be a start. And some tighter rules as well.

Doesn't seem likely, with the IRD going to shed 1,500 jobs. I wondered whether this was because changes in software meant that less staff were needed; however I discussed this with an accountant friend, & he said that the new systems tend to be adding to the work, not reducing it. It seems as tho the cuts are a National Govt way of reducing the scrutiny on businesses, & instead relying on the relatively passive taxes from PAYE & GST.

Hang about ....

In arriving at the $ billions of gains in private owner-occupied dwellings did you make any deduction for the interest cost component of all mortgage repayments plus (possibly) the costs of any renovations or improvements or maintenance that may have been done

If you haven't then the gains will be somewhat less

Good point

On one hand yes. But on the other there is the addition to the money multiplier if the properties were taxed.

If any of us improve our employment prospects, and so our salary potential, via further education etc., should we be taxed on any higher pay packet we get ( which we are if we get a pay rise)? Of course! We wouldn't blink an eye at that happening. So how is that different to a 'capital gain' in asset value? Isn't our human potential also an asset to be capitalized on? If taxing us on any pay rise we get is considered' normal' then so too should any gain from asset value increase. Income is income is income....

Taxing the income is already done with houses when improvements are made and rents increase aren't they?. What you're talking about is taxing the asset value, which is the present value of future earnings I believe, you wouldn't do that as an individual and pay tax on your own potential

I am not sure that a credit fueled labour bubble has the same ring to it as credit fueled asset bubble. Plus you only get income when you work, you don't increase in value if you just sit there doing nothing. Not a valid comparison at all, we are talking the value of unearned income here.

Capital gains tax as a revenue source isn't fantastic. It benefit's are probably more in that it even up the imbalances between investing in property which is tax free versus investing elsewhere -which is mostly taxed. I don't think a capital gains tax or or the equivalent -such as removing taxes on savings is a silver bullet for addressing the housing crisis. But it probably should be part of a broad reform package -to address the imbalances in our economy.

The silent assumption that a CGT would not result in fewer property transactions is false , particularly so when it comes to sales and purchases by owner occupiers. The act of moving house to an equivalent value house elsewhere would trigger a large tax bill ; this would of course reduce labor mobility and create other distortions. Worrying about this is not just " a sop to voter greed".
Lab's answer to this problem is to exclude family home from CGT ; once that is factored in the expected tax take goes down steeply.
CGT just does not work ..

"The act of moving house to an equivalent value house elsewhere would trigger a large tax bill".
Not necessarily. CGT (for all of it's pros and cons) is only on the "g" = gain. If property prices stabilize, selling a home that anyone buys for $1,000,000 for $1,000,000 incurs $zero on CGT.

True . It would also mean that there is no CGT to collect at all - not even to pay for the administration costs of it .

CGT in Aussie is just a process. It's done as part of conveyancing and is just a line on the forms. Any funds payable are remitted to Treasury ...and that's it! Very little administration at all once it's up and going.

It is not that simple at all . One needs estimate and deduct and any gains attributable to extensions and renovations etc.etc. Subject to complex rules open to gaming ; tax accountant dream.
Further a situation where prices are stable and there is no gain to be taxed on is just one hypothetical situation .. one can argue about how likely or desirable it is but no one can say with certainty that would actually happen ( prices always go up .. or down ). Outside that scenario the problem of tax on moving house ( or tax incentive to move house if CGT credits are allowed ) remains .

And watch the creation of rental housing come to a standstill if a CGT was imposed.

Why? If property prices do fall there is no CGT payable. If they did fall, arguably 'investment' property would return to what it's supposed to be - an investment, where the rental return covers costs + gives a profit ( used to be accepted as 7%). The lower the establishment cost of new rental stock, the more that will be built. It all boils down the to....the cost of the land underneath the building!

Would you put money into rental housing with all its hassles, if the rate of return was similar to other investments ?

Of course! IF...the entry price justified it. As Olly Newland used to say ( as I quote last weekend) "700 x the weekly rent = Entry price"

But why would you do that given you could achieve exactly the same rate of return from other more hassle free investment categories - assuming it is simply a financial exercise and you are not one of those people who have a genuine passion for housing?

I just don't get this quasi-religious belief in NZ that real estate investment needs to have a favourable tax treatment, to make it more attractive than other investments.

Wouldn't it make more sense to give favourable treatment to investments that actually gained productivity for the country, and earned export dollars? Of which property investment provides precisely zero?

Having said that, a level playing field would be the ideal. Investors should choose the portfolio that offers the best return and makes sense for their situation and skill set, not one that is propped up by the taxpayer.

Shares and other investments in my experience can halve or worse in value... dividends stop etc.
My property investments might fall by 10% or so but rent comes in... even fires and quakes have never sent them to zero.
Regular rent.
It can be along time between dividend drinks... business is about cash flow.

Why has rental housing not come to a standstill in Australia? Australia has a CGT.

All this talk of taxing the people more when corporations like google, facebook, apple, amazon and the various banks pay virtually no tax legally. We can blame countries like Ireland for this and our own weak politicians.

And yet a recent government study has concluded that the amount of additional tax that would be generated if international corporates paid their 'fair' share, is relatively modest. The evasion that some excited politicians and commentators would have us believe is widespread, is not actually occurring.

I'm not sure why any of those companies you mention should pay tax here. They probably have very little presence in NZ, just because their products are sold here it doesn't mean they should pay tax here (other than GST paid by the retailer). Do frontera pay tax abroad?

I work in the industry that most of the companies mentioned work in, I can categorically state they have a significant presence in NZ. They also advertise regularly for staff in NZ.

David, if you tax capital gains on your own home then you should be able to write of your expenses on it like you can in the USA at least on the interest and property taxes (council fees) then you should also rebalance and set up Kiwi saver like 401k and have tax deferred savings, taking more tax off one thing should mean reducing tax off then reduce gst back to 10% and make things cheaper again for everyone

At present, of course, landlords can claim back their costs, including interest, and usually not pay tax on the profits. Which is the biggest part of the inequity, and why landlording is such a lucrative investment.

So what I'm wondering, David, is whether the income from the CGT would at least reimburse the long-suffering taxpayer for the landlord subsidies? (I'm only referring here to the direct subsidy of deductible interest, not the indirect ones of WINZ landlord accommodation supplements etc).

Family home exempted - Rest should be taxed

Defining a 'family' and what a 'family home' is, would be a tad challenging in 2017 society. Houses bought by overseas investors through a related person proxy would likely meet the criteria of being a family home.

CG taxes are complex and costly to administer and distort investment decisions. Simpler to continue down the present track of addressing speculative housing investment by other means, including taxation treatment.

As the article illustrates this leaves relatively little to tax - hardly worth the additional complexity and costs involved.

Why are so many on here so preoccupied with wanting to have a capital gains tax on investment property?
The reality is that if they owned investment property they would not see the need for a capital gains tax.
Just because something goes up in value why is there a need to tax iit!
The truth is that what is costing the country far more is the amount of WELFARE that is paid to so many and is a total drain on the country's coffers.
People doing absolutely nothing and getting paid for it is far worse than investors providing accommodation to people by way of a business and paying tax!!
Most of you have got in all wrong.
You do need to lose the jealousy as it is not a great trait!

All these jealous people obviously trying to get free handouts from the government. When they don't get what they want, they turn their attention to the successful people and try to drag them down so that they're on level par.

I would consider myself fairly successful, the difference between me and you is that I pay 33% tax on my success. I would hardly consider it jealousy that I think you should pay the same tax on your income as I pay on mine.

A perfect description of the average Labour voter

And why are we paying so much in welfare TM2? Because people can't afford to get by in this country without support... And why can't people afford to get by without support TM2? Because a lot of greedy people have made the cost of living too high through self interest and financial gain....(property speculators pushing the price of living so high and immigration pushing demand on rentals high).

You can't be the cause of an issue and then blame other people for the effect....(push the price of living up and then blame other people for needing a helping hand to get by)...That would be very hypocritical of you....but you wouldn't be hypocritical would you TM2? You're an honest, down to earth darklord....

DC, to be as perfectly consistent as I suspect you wish for, in terms of tax treatment on assets, perhaps we should include widening the net to include some other asset classes:

  • Artworks
  • Antiques and collectables
  • Classic and vintage cars/motorcycles/bicycles/tractors
  • Postage stamps
  • Vintage wines, spirits and liqueurs
  • Jewellery and watches

And as losses need to be equitably treated, too, I see a Brighter Future for tax accountants, purveyors of asset recording software, and similar accoutrements to the Tax Assessment Game.

Or perhaps (gosh it's amazing what thoughts a small glass of Chianti can thus engender) a FIF-style 'deemed value' would be simpler. An annual visit from an Asset-Sniffer-Pursuivant, a small percentage of the thus-estimated value assessed as Tax, and - oh wait - isn't that TOP policy already?

Removes tongue from cheek, awaits reasoned comments from other - er - common taters, pours second glass....

While we are at it, why don't we value the non tangible assets held like education received? That would allow those whose tax paid for other's education to be less taxed during their lives. There's no end to this game, where the golden rule seems to be think up taxes that you don't have to pay yourself.

That is the problem - the elite have made sure that the only real tax is on hard earned income, a tax that they don't pay themselves.

I see your point David, but I think you are barking up the wrong tree. The issue I have is, to me, it is the deductibility of interest as an expense which is counter-productive, without this then the increased income stream from rented property becomes taxable. Same for multinationals.

For ease of administration I would advocate for a lower tax rate on real property capital gains, say 15% which builds in a expense/deduction component. I also would not allow capital losses to be claimed if the property was disposed of at a loss.

Not allowing deductions for expenses ( like building , renovations and extensions ) will simply discourage increased housing supply - the exact opposite of what NZ needs.

Exactly, why add that second dwelling if it'll just be disproportionately taxed? Better to buy a seperate piece of dirt with a dwelling already on it.

Jimbo-jones. Investors do pay full tax on the income from rental property income.
Any capital gain from something is also taxed if the intention was to make money and also if sold inside the 2 years.
Anyone advocating CGT on inflation and growth of property are pure and simply jealous of other people's success and would be far better putting their energies into something constructive or enjoyable.

If a family home is to be exempt from CGT how would a family home with a legal minor dwelling attached be treated. Would only a percentage of that home attract CGT or the whole building?

Capital gains "earned" - love it David.

I will repeat something I have said before, that taxing capital gains is like taxing a thief. However it is better than nothing, and should be introduced along with a few other tools to direct investment to productive enterprise such as the interest being deductible as Roger points out above.

Scarfie, interest paid is a expense in the business of rental property.
I would have no problem not being able to claim it as an expense but if that was the case then I would not need to pay tax on profit.

Only if you have debt over that property. And therein lies another issue, loading disproportionate amounts of debt against your property business and having a debt free home.
In any other business the inverse is true. The family home is loaded with debt to support the business, and you would struggle to borrow against that business to buy another business.
Property is special.
And yes you would still need to pay tax, you aren't that special, ask the ird.

If you borrow against the family home to fund a business the interest is tax deductable (just like if you borrow to purchase a rental property). The same holds for borrowing to fund any investment including shares. It is the purpose of the borrowing that determines deductability not the security.

So property is not special. It is treated exactly like any other investment.

If you have to pay interest then you have a mortgage. If you have a mortgage then you are leveraged. That means you are speculating, and if you want to speculate why honest taxpayers give you a discount to conduct that activity.

Sluggy if you can't claim all expenses in regard to your business then it is perfectly right that any profit received should not expect tax to be paid as the IRD can't have it all their way.

What I was pointing out was that debt is perceived as a positive in your business, and a negative in virtually every other. Property investment isnt special, although it is treated with kid gloves in this country

The article shows huge gains, but what must be factored in is that while landlords are accounted for residential property has always been subject to tax when property is developed and sold for profit and where residential property is traded for profit. Also, with deceased estates all assets are assessed in finalising income tax owing so some tax may be captured there. This is a capital gains tax in all but name, and the bright line test that formalises this that was brought in 2014-2015 must be taken into account. In particular, that this does capture main homes as you can only claim this twice in two years. It would have been better to account for tax take by IRD for this category as well.

A second point is all those gains need to be adjusted for inputs which under other capital gains taxes e.g. Australia or even our bright line test are allowed to be claimed - that is interest, rates and land taxes, repairs and maintenance and any renovations to the property. The tax is then assessed against the total income of the individual or entity involved. Usually there are other rules for inherited property and this is not subject to the tax.

Another factor to be considered is that not all gains are realised when it is simply a individual selling their existing home and then purchasing again in the same property market in a given area. I've heard that NZ is quite 'mobile' and in the past at least, would move to a new house every 7 years. However, if their main home as they go to purchase a new property has enjoyed capital gains when they go to purchase a property that also has had gains. This ends up in fact being neutral, or even a negative if the person upgrades for family needs and also to spend more for a larger home. And of course, first home buyers must absorb those gains, they have nothing to offset that. Then mortgagee sales need to be taken into account as these always make up a proportion of the market and when a house is sold for debt, the debtor is only concerned with getting their money back and not about gains. I think this is one reason why main homes are exempt in general, it is too hard to capture when in fact a sale is full and final and capital gains truly realised as profit.

The fact is those billions of claimed profit that could be taxed is either taxed already or the effect is neutralised by the market itself when it comes to individual home owners who are buying and selling within the same market. Capital gains taxes don't tend to have the effect they are claimed to have in any case, especially when taxation rules already exist to tax property development and speculation.

Mate, all the jealous share investors hear is: WE NEED A CAPITAL GAINS TAX ON PROPERTY.

Where is the article on all the unpaid taxes on gains on shares please?

And on the gains in the value of businesses?

Oh that's right, doesn't fit with the narrative right?

Any tax should be on a REALISED gain, not on some change in the paper value.

What does realised mean? I would suggest, profit from a sale, borrowing against a change in value - anything that is used to put more money in the hands of the owner. This would mean homeowners who don't sell won't get taxed on some perceived value change. Landlords would still be liable for their normal incomes, land bankers will liable. The question is - how to police it?

Very good article DC, thanks. You do make an assumption that you do not disclose, which is that you applied a CGT of 33%. I assume you used 33% as it is the tax on top income bracket but of course a CGT can be anything and I would suggest 33% is huge. Some countries even have a scaling CGT where you pay as much as 90% if you sell within 1 year, progressively scaling down to very little after 10 years of tenure, thus disincentivizing speculators and being kind on long-term owners.

True Daveo36,, if you tax capital gains in Property, then tax the same for businesses (brand equity!!), and shares (which traders are supposed to return to IRD but dont). I think people would moan like stuck pigs if that was suggested!

Our population has grown by 390,000 in 5 yrs. That would be NZ's 3rd largest city if they were all put in the same place. A city with no houses and no infrastructure. This is why NZ is going to be squeezed for every drop of tax the government can get. CGT and road tolling and much more.
We have to pay for the roads and infrastructure that this population growth requires.The National govts rock star economy was a have. It was borrowing against future NZ and damaging our lifestyle.
I agree with young NZ and the have nots wanting the haves to pay their share but I won't vote for it. I wont vote for CGT or for road tolling.
My vote at this stage goes to Winston in the hope he can stop this flow of immigrants.
We have to put a value on what its worth for someone to immigrate to NZ. Our infrastructure of roads, schools, hospitals and Hydro dams etc is worth trillions of dollars. Thats like $250,000 per person.
Imagine if the 390,000 immigrants of the last 5 yrs had had to pay for their share of ownership in this infrastructure. $250,000 each. We wouldn't have govts trying to squeeze every last dollar out of us.
I believe our immigration policy should benefit NZ'ers. Not be a burden. We need Immigrants like Dot Com and the Russian who spent $50 million building NZ's biggest house. We don't need immigrants like my dearest friends who moved to NZ with enough money not to need to work for ten years so have paid no tax other than GST and now collect pensions and after an accident, free health care with a long stay in hospital.
NZ needs to put a value on our quality of life and our infrastructure so that our immigrants arn't a burden but an asset.
With more and more taxes our wealth deteriorates and for many people NZ is now a third World country where they have no hope of breaking out of the poverty cycle.

while I get the need to have this debate, and have my own opinion, I do not understand why people find this debate more important than the one about getting multinational corporations to pay their fair share of tax in NZ. I note in a recent article where the proposed plans to address the issue has resulted in a watered down plan.

Not sure why Landlords should have it so much easier with tax than us business owners who employ staff, do R & D and create products. It is so much more difficult to fund business in this country than to get a mortgage to buy properties. Seems backwards.

That's because it is backwards NickBOP.....there's a whole bunch of debt thrown into non-productive 'business' (darklording). It doesn't create doesn't increase wages....but it means the government needs to pay a whole bunch of $$$ to the vulnerable to live in motels (which of course is paid for by your honest, hardworking average kiwi who pays all of their taxes.....not the people who cause the problem (darklords), who themselves negative gear to dodge some of their dues)

The tax system is definitely weighted to property in investment. For example negative gearing. No way I can write off share losses against income. Also if you look at the IRD website you see that property repairs can also be written off. My question is: does the IRD automatically look at any bond from tenants used for repairs when it processes the tax rebate claims for property repairs. Seems logical but who knows. Worth a question about potential double dipping

Actually you are wrong on that. Borrow to invest in shares and the interest is deductable and can be offset against income.

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