Politics 🗳️ NZ Politics

[defensivebomb]

I see that the $3 billion "tax cuts" to landlords should now be used to cut child poverty by using that $3 billion per year, according to the Greens Child Reduction spokesman Ricardo Menéndez March.

I was thinking the other day about how the interest deductibility changes are described as “tax cuts”, which is an unfair way to describe them.

A landlord will often use debt to purchase the property and therefore incur interest to generate their revenue. The deductibility principle, which is used to guide what can be claimed, requires a sufficient nexus between expenditure and revenue

Landlords pay tax. By disallowing such a major expense (which has a clear nexus to revenue) is effectively taxing it twice. Restoring interest deductibility isn’t a “tax cut” in the usual sense. It is just restoring landlords’ deductions to be in line with all other businesses, so they are only taxed once

And before anyone flames me - I am not a landlord

 

[miket12]

Any one of those things would be better than giving it to landlords who by definition are wealthy and don't need it. Don't let perfect be the enemy of good.

Really.... I'm delaying giving my tenants a rent increase this year because my expenses are going to be less due to the "taxcut".... or would you rather they didn't get one?

 

[marv.]

I was thinking the other day about how the interest deductibility changes are described as “tax cuts”, which is an unfair way to describe them.

A landlord will often use debt to purchase the property and therefore incur interest to generate their revenue. The deductibility principle, which is used to guide what can be claimed, requires a sufficient nexus between expenditure and revenue

Landlords pay tax. By disallowing such a major expense (which has a clear nexus to revenue) is effectively taxing it twice. Restoring interest deductibility isn’t a “tax cut” in the usual sense. It is just restoring landlords’ deductions to be in line with all other businesses, so they are only taxed once

And before anyone flames me - I am not a landlord

yes, but the most important thing your arguement is missing, is that if you have any more money, property, private schooling, tertiary education, not divorced parents, or privilage in general than a couple of guys here decides is the cut off, you’re automatically greedy, racist, callous, and just plain don’t get it.


half joking.

 

[juju]

I was thinking the other day about how the interest deductibility changes are described as “tax cuts”, which is an unfair way to describe them.

A landlord will often use debt to purchase the property and therefore incur interest to generate their revenue. The deductibility principle, which is used to guide what can be claimed, requires a sufficient nexus between expenditure and revenue

Landlords pay tax. By disallowing such a major expense (which has a clear nexus to revenue) is effectively taxing it twice. Restoring interest deductibility isn’t a “tax cut” in the usual sense. It is just restoring landlords’ deductions to be in line with all other businesses, so they are only taxed once

And before anyone flames me - I am not a landlord

The counter argument is - in a housing crisis should our society should we consider property investment a business & prioritise them over FHB.

Reversing it is also lost tax revenue.

Also the government made these changes while removing the first home grant.

 

[Garry Saloon]

I was thinking the other day about how the interest deductibility changes are described as “tax cuts”, which is an unfair way to describe them.

A landlord will often use debt to purchase the property and therefore incur interest to generate their revenue. The deductibility principle, which is used to guide what can be claimed, requires a sufficient nexus between expenditure and revenue

Landlords pay tax. By disallowing such a major expense (which has a clear nexus to revenue) is effectively taxing it twice. Restoring interest deductibility isn’t a “tax cut” in the usual sense. It is just restoring landlords’ deductions to be in line with all other businesses, so they are only taxed once

And before anyone flames me - I am not a landlord

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

 

[defensivebomb]

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

And for someone leaving home for the first time, where would they live? On the street?

 

[miket12]

I was thinking the other day about how the interest deductibility changes are described as “tax cuts”, which is an unfair way to describe them.

A landlord will often use debt to purchase the property and therefore incur interest to generate their revenue. The deductibility principle, which is used to guide what can be claimed, requires a sufficient nexus between expenditure and revenue

Landlords pay tax. By disallowing such a major expense (which has a clear nexus to revenue) is effectively taxing it twice. Restoring interest deductibility isn’t a “tax cut” in the usual sense. It is just restoring landlords’ deductions to be in line with all other businesses, so they are only taxed once

And before anyone flames me - I am not a landlord

Interestingly, when the ability to claim interest was removed, it wasn't a tax cut... because Labour campaigned on not introducing any new taxes. But, not that landlords are able to claim back 80% of the interest, it's a tax cut.

If the mortgage on our rental was instead over our family house, I could claim part of that back as an expense of my tax bill.

My wife actually uses more of the house than I do the three days she works from home but, because she's on a salary, she can't claim any of the rates, power, phone, electricity, water or insurance like I can.

 

[juju]

And for someone leaving home for the first time, where would they live? On the street?

Do houses just magically disappear if landlords don't own them?

 

[Garry Saloon]

And for someone leaving home for the first time, where would they live? On the street?

Landlords rarely produce housing. They buy houses that are sitting there already. They do not provide housing.

 

[miket12]

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

You're joking right? Here's a newsflash for you.... if it wasn't a business, it wouldn't be taxed in the first place!!!

If you’re a landlord, you’re in business

If you’re collecting rent, you’re running a business. Residential rental properties come with rules you have to comply with. Here’s what you need to know.

www.business.govt.nz

 

[defensivebomb]

Do houses just magically disappear if landlords don't own them?

Landlords provide a service. For someone starting out in life that can’t afford a house, have a relationship break down, need to go somewhere for work or study or are staying in a city short-term, renting a place will always be a more suitable option and bridge the gap

 

[dean]

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

Or, losing money for the last three years hand over fist as house prices fall.
Still, serves them right for trying to better themselves.

 

[juju]

Landlords provide a service. For someone starting out in life that can’t afford a house or are staying in a city short-term, renting a place will always be a more suitable option and bridge the gap

Yes, gearing the market towards landlords and away from FHB is just not a good look at all.

Landlords aren't going to exit with their houses magically disappearing if property speculation or investment is treated differently.

 

[Garry Saloon]

You're joking right? Here's a newsflash for you.... if it wasn't a business, it wouldn't be taxed in the first place!!!

If you’re a landlord, you’re in business

If you’re collecting rent, you’re running a business. Residential rental properties come with rules you have to comply with. Here’s what you need to know.

www.business.govt.nz

I don't care what they says. A business produces a service or product, it employs people. It does stuff. A landlord puts himself between a person and shelter and says I'll have a third of your wages if you want a roof over your head, you can't have a dog, can't put a picture up, can't grow veges, I'll mayyyybe fix your leaky tap eventually, oh and you can fuck off and move your kid to a different school in a year because i want to make some capital gains now, oh and on your way out the door you can pay 450 for a professional carpet cleaning before the open home, and no you can't have your bond back because the lino has a scratch in it.

 

[MrFrankWhite]

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

I see the hand is firmly out with this one.

 

[miket12]

Do houses just magically disappear if landlords don't own them?

Interestingly, the latest CoreLogic data is showing that FHB's are still taking out new mortgages in larger volumes than normal as they take advantage of lower house values and lowering mortgage rates. But, the number of investors re-entering the market is also increasing but they're buying fewer properties and with smaller mortgages. It appears, a number of them who left the market selling multiple properties are now coming back, however slowly, with fewer properties.

It seems they're following the advice of Olly Newland. There was a large debate going on in the early to mid 2000's between Newland, who was advocating that landlords should have fewer properties but of better quality, and others who suggested that it was better to own lots of properties with interest only mortgages. When the GFC hit, it was Newland, who suggested investors sell some of their portfolio to get (as he described it) "a war chest together", who was proved right, because, as values dropped and interest rates rose (just as we've seen now), the followers of Newland swept in and brought up a number of properties from those who thought values wouldn't drop.

Sometimes, it just pays to take the more conservative approach.

 

[juju]

Interestingly, the latest CoreLogic data is showing that FHB's are still taking out new mortgages in larger volumes than normal as they take advantage of lower house values and lowering mortgage rates. But, the number of investors re-entering the market is also increasing but they're buying fewer properties and with smaller mortgages. It appears, a number of them who left the market selling multiple properties are now coming back, however slowly, with fewer properties.

It seems they're following the advice of Olly Newland. There was a large debate going on in the early to mid 2000's between Newland, who was advocating that landlords should have fewer properties but of better quality, and others who suggested that it was better to own lots of properties with interest only mortgages. When the GFC hit, it was Newland, who suggested investors sell some of their portfolio to get (as he described it) "a war chest together", who was proved right, because, as values dropped and interest rates rose (just as we've seen now), the followers of Newland swept in and brought up a number of properties from those who thought values wouldn't drop.

Sometimes, it just pays to take the more conservative approach.

Definitely the interest rates have shifted it all to a buyers market which helps FHB

 

[Mr. Brownstone]

Who cares? Tax them twice. It's not a business. In most cases they don't produce shit. If you own a rental you're making money hand over fist every year as property prices increase while you sit on your ass. And some worker pays your mortgage.

Geez that chip on your shoulder must be really weighing you down. Pathetic.

 

[defensivebomb]

Yes, gearing the market towards landlords and away from FHB is just not a good look at all.

Landlords aren't going to exit with their houses magically disappearing if property speculation or investment is treated differently.

Fair points

 

[Garry Saloon]

Geez that chip on your shoulder must be really weighing you down. Pathetic.

Playing the man not the ball I see. Pathetic