Politics 🗳️ NZ Politics

[miket12]

What policy? It's a wide open opportunity there right now for anyone who wants to move there

The DTI requirements policy mean that people will have to look outside of Auckland if they want to buy their own property. It will give people two options….. move to a cheaper place or rent for life.

The policy will also give property speculators and landlords an advantage as they can add future profit and/or rent to their income… an advantage renters saving for the deposit don’t have. Think of it this way, Mum and Dad investors earning $140k per year can also add $30k in rent and don’t require a deposit because they can use the equity in their own house as a deposit. That means they can buy a house $1,020,000 rental property without needing a deposit.

FHB’s earning the same $140,000 PA can buy the same property, but they need to save up $180,000 before they can. How easy do you think that is when paying rent? Even if they can save $30,000 per year, that’s six years before they can buy it, but the house they want has increased in value.

It’s like how cruel for most people saving up for houses over the last few years has been….. yes, the value of houses became more affordable but the increases in mortgage rates and rents due to added expenses for landlords, has meant, unless the Bank of MaD can help them, they were still priced out off the property market.

 

[Worried2Death]

The DTI requirements policy mean that people will have to look outside of Auckland if they want to buy their own property. It will give people two options….. move to a cheaper place or rent for life.

The policy will also give property speculators and landlords an advantage as they can add future profit and/or rent to their income… an advantage renters saving for the deposit don’t have. Think of it this way, Mum and Dad investors earning $140k per year can also add $30k in rent and don’t require a deposit because they can use the equity in their own house as a deposit. That means they can buy a house $1,020,000 rental property without needing a deposit.

FHB’s earning the same $140,000 PA can buy the same property, but they need to save up $180,000 before they can. How easy do you think that is when paying rent? Even if they can save $30,000 per year, that’s six years before they can buy it, but the house they want has increased in value.

It’s like how cruel for most people saving up for houses over the last few years has been….. yes, the value of houses became more affordable but the increases in mortgage rates and rents due to added expenses for landlords, has meant, unless the Bank of MaD can help them, they were still priced out off the property market.

Totally agree, the Auckland market is insane, even compared to Christchurch. If I had a young family now I'd be moving to Invercargill and trying to save 50K for a 300K 3 bdrm home, although it's not easy to get a rental in the meantime there either. Rents are 4-500 p.w.

My wife wants to retire back in Auckland eventually but every time we're up there she gets less enthused by the housing market, traffic, air of lawlessness. She's slowly coming around to my dream of retiring to Hokitika to go fishing. Hehe.
It helps when I cry in front of her.

 

[miket12]

Do the countries overseas that have CGT exclude the family home? Do they have interest deductibility and the ability to offset it against income through LAQC?

I don't actually think there will ever be a balance where everyone is happy but we must be able to get it closer?

What about a CGT excluding the family home and money raised from that goes in to a pool that people buying their FH can apply to for an interest free 10% (or whatever number) of the house value. With the government being that percentage first creditor owner until it's completely paid back over a set period. And that money gets reused as it's repaid also.

I don't really know if that would work or not. Not anywhere near my field of expertise. I'm just spit balling

What people don’t realise is the the CGT’s that have been proposed includes the currently untaxed gains in managed funds and KiwiSaver funds. Most of the returns in those funds is from capital gains made by increases in the values of the shares owned by the funds. All that’s taxed at the moment is mostly from interest and dividends.

Unlike PAYE, company tax and GST, CGT’s are expensive to administer meaning the Treasury gets less money from the IRD. I’d have to look for it, but I read a tax report what says the government receives something like 95 cents (95%) for every dollar paid for the current taxes once the collection and IRD’s administration costs come out but it drops down to 85% for CGT’s and Wealth Taxes.

 

[Inruin]

What people don’t realise is the the CGT’s that have been proposed includes the currently untaxed gains in managed funds and KiwiSaver funds. Most of the returns in those funds is from capital gains made by increases in the values of the shares owned by the funds. All that’s taxed at the moment is mostly from interest and dividends.

Unlike PAYE, company tax and GST, CGT’s are expensive to administer meaning the Treasury gets less money from the IRD. I’d have to look for it, but I read a tax report what says the government receives something like 95 cents (95%) for every dollar paid for the current taxes once the collection and IRD’s administration costs come out but it drops down to 85% for CGT’s and Wealth Taxes.

What if the CGT was only on property, or even just residential property? As that's where the predominant issue is, or perceived to be.

 

[miket12]

Totally agree, the Auckland market is insane, even compared to Christchurch. If I had a young family now I'd be moving to Invercargill and trying to save 50K for a 300K 3 bdrm home, although it's not easy to get a rental in the meantime there either. Rents are 4-500 p.w.

My wife wants to retire back in Auckland eventually but every time we're up there she gets less enthused by the housing market, traffic, air of lawlessness. She's slowly coming around to my dream of retiring to Hokitika to go fishing. Hehe.
It helps when I cry in front of her.

I was talking to one of our neighbours before Christmas who is renting. He has two rental properties in the South Waikato which are self-funding. He’s hoping that within five years, he’ll be able to sell both of those and, with money he’s currently saving, buy in Auckland. He”s fortunate that he inherited enough money for the deposit for there but still not enough for a house in South Auckland. The rental return down there is also better than what he’d get in Auckland.

I suggested he move his desk into his bedroom and get a boarder in to the room he’s currently using as an office two days a week when he’s working from home.

 

[Worried2Death]

I was talking to one of our neighbours before Christmas who is renting. He has two rental properties in the South Waikato which are self-funding. He’s hoping that within five years, he’ll be able to sell both of those and, with money he’s currently saving, buy in Auckland. He”s fortunate that he inherited enough money for the deposit for there but still not enough for a house in South Auckland. The rental return down there is also better than what he’d get in Auckland.

I suggested he move his desk into his bedroom and get a boarder in to the room he’s currently using as an office two days a week when he’s working from home.

What are his ties to Auckland, work? whanau?
Can't be the climate, always bloody raining isn’t it?

 

[miket12]

What if the CGT was only on property, or even just residential property? As that's where the predominant issue is, or perceived to be.

The problem with only having a CGT on certain assets is people then look for a loophole. If classic cars weren’t included, people would sell their rental properties to buy those or if managed funds weren’t included, people would invest in those.

Less rental properties means higher rents for those still in the rental pool, meaning FHB’s dream of owning a first home is pushed further away.

Same as increasing landlords expenses through removing interest deductions led to higher rental prices. In some cases, landlords sold their properties because they were too highly negatively geared. Less supply, more demand, rents go up.

 

[miket12]

What are his ties to Auckland, work? whanau?

Both, he’s from a refugee family and is closely involved in his expat community… especially now since both his parents have died.

 

[miket12]

Can't be the climate, always bloody raining isn’t it?

I’m thinking we should retire back to Tauranga for the weather but it’s all full of transplanted Jaffas now!!!!

 

[Worried2Death]

Both, he’s from a refugee family and is closely involved in his expat community… especially now since both his parents have died.

Has he considered buying three houses in Invercargill for the same money and moving the whole community there instead

 

[miket12]

Has he considered buying three houses in Invercargill and moving the whole community there instead

TBH, he finds Auckland is too cold at times, I don’t think he’d like the Deep South at all.

Anyway, got to be up in less the five hours so time I went to bed. Good chatting!!!

 

[Mr Drag]

Lucky I'm not greedy, I just live on what the taniwha provides!

 

[Worried2Death]

TBH, he finds Auckland is too cold at times, I don’t think he’d like the Deep South at all.

It's actually generally warmer down there than Canterbury, particularly overnight, but yes that is a consideration. Don't forget global boiling, it'll be like the Sahara down here soon.

 

[Mr Drag]

Lucky I'm not greedy, I just live on what the taniwha provides!

He brought me a big bag of plums the other day, I said "Taniwha where did you get them plums from?" He said "I got my sources bro!"

 

[Worried2Death]

He brought me a big bag of plums the other day, I said "Taniwha where did you get them plums from?" He said "I got my sources bro!"

Thought you were going to say "I pinched them".

Who let you out the gate this time of night Drag?

 

[Inruin]

Thought you were going to say "I pinched them".

Who let you out the gate this time of night Drag?

You should never put your hands on another man's plums without consent

 

[Mr Drag]

Thought you were going to say "I pinched them".

Who let you out the gate this time of night Drag?

Get excited for the new season, can't wait!
I also had a Chinese for dinner and are still hungry! Plums keeping me awake with a sugar rush!

 

[Mr Drag]

You should never put your hands on another man's plums without consent

They were big and juicy! for the picking!

 

[Inruin]

They were big and juicy! for the picking!

I hope you shared your plums with Mrs Drag then

 

[Worried2Death]

They were big and juicy! for the picking!

Taniwha bought me some apples, not enough beer and chips though, hate it when the wife rips up my shopping list.