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The Tax Reform Policy vs. the Family Home
In one of the responses posted on the TOP Party Tax Reform policy, you (or one of your team?) wrote: ''The centre of the unfairness in our income tax regime is owner-occupied property.'' I should like to point out that it's people owning more than one house which is kind of the issue: we all aspire to own a home that we don't have to rent (which shouldn't actually be unreasonable: it's nice to have stability and the security of not having your rent raised or the potential of evictions), and there are theoretically enough to go round. However - to my understanding - the purchasing of additional properties, to do up and flick off for profit, is a major factor in the driving up of our house prices - not the ownership of family homes. I reckon this policy has a strong potential to induce a disinclination among renters to actually own a home, as they'll in effect be renting it anyway even if they pay out 400k for the privilege of /not/ renting it - with the rates as well as this 'imputed rent' tax. And I have to say, if I save up (while renting!) - perhaps using my kiwisaver savings, which have the quarterly returns taxed - and buy a house and pay my yearly rates, insurance, maintenance, and the mortgage (which all have tax components and are, with the exception of insurance, not things I face as a renter), and then also have to pay your tax (which is basically in place of the tax on the rent I'm no longer paying as a new home-owner), what point is there? And if I do any maintenance myself am I liable to pay the tax that would have been paid had I hired a tradie to do it for me? Because as far as I can see, that's the direction this policy takes us in - not just tax on money that has been paid by tax on money that /would have/ been paid had I chosen the hiring/renting/service route instead of the owning/diy route. I mean, I guess from the numbers you present and the snazzy graphs in the PDF that this policy would generate a significant amount of revenue for the theoretical TOP-led Government, but it seems to distribute the burden rather broadly and doesn't address the issues of speculation and the need for an actual comprehensive capital gains tax. And it'd be all very well to say it's a selfish point of view, but the fact is that it's a point of view probably shared by a lot of kiwis who'd like to step off the renter's cycle one day and settle down. Cheers!
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