I don't think taxing people for utilization of private assets (living in their family home) is reasonable because;
1) Where do you draw the line on productive assets? Should we also tax everyone for owning a car (some cars are worth than a house), for owning a bicycle, for owning a sewing machine, for owning a fishing rod? All these are productive assets, providing us with value that we don't have to otherwise pay someone else to obtain. Why are some "productive assets" treated differently than others for the sake of being an asset. The real point is income or profit derived at some point in the life of the asset being subject to taxation. Owning property for the purpose of deriving profitable income - tax it. Buying an selling property with the intent of deriving profitable income - tax it. Selling a car/bike for more than paid for it - in a perfect world, tax it. Deriving profitable income by selling clothes made using your sewing machine - tax it. Deriving profitable income from selling the fish you catch with your fishing rod - tax it.
2) If the house you live in is to be taxed, it should be tax at one flat rate no matter what the value of the property is. If I live in a $70,000 house in Wairoa or a $3,000,000 house in Auckland, I am deriving the exact same utility from this asset - shelter. The only fair way to tax this would be to tax both scenarios the same.
3) A tax based on the capital represented by owning a property is not fair in this situation. Jane purchased her home in 1987 for $75,000. Jane has lived in this home for the past 30 years. Her home now has a RV of $1.5M. Over the 30 year period, Jane's wages have increased inline with the average wage. Jane has a modest amount of savings and makes enough money each week to pay for her living costs with a small buffer. Apparently according to the TOP party, Jane has $1.5M of capital that she is has not deployed efficiently, is avoiding paying tax on, and will now by taxed by the government. Jane is unhappy, because she doesn't feel like a millionaire, she feels the same as all the other middle class people she calls her friends. The problem here is for Jane to realize the $1.5M asset she has, would require her to sell her house. Jane doesn't want to sell her house, she just wants to live in it.
FWIW - I am 36, live in Auckland, and do not own property. Although it is really hard to get over the line to property ownership, I am close and will get there this year. While the current system is broken, I don't believe this solution is the answer.
In addition, as a business owner who employs 20 staff, the thing that pisses me off, is people who buy, sell, and rent property for the intention of deriving profitable income, but are not subject to tax. Gareth, please do something to tax profitable income from all sources, not the utilization of of assets.
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