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38. Are you attacking the drive of people to leave stuff for their kids?
Answer
Possibly given that this loophole has been here so long now we have people investing inordinate amounts to accumulate the unearned gains from merely holding a particular asset type - housing. With that incentive removed those folk will need to put their money to work elsehwere. Investing in businesses that grow and employ and make profits and pay higher wages would be a fine thing don’t you think?
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Matt commented 2017-06-23 22:15:26 +1200Well said Norman, there will need to be a lot of education and simplification around the methods to invest in alternatives other than housing for those that have money left over after the mortgage and living costs etc.
The trouble we have at the moment is this generationally ingrained mantra that is “house prices always increase” so is a very safe investment (even in the very short term with the current market). Think about a future NZ where houses were no more attractive return-wise than investing in a business or bank term deposit… -
Norman Cates commented 2016-12-28 21:10:21 +1300Again, a vague statement that by taxing house assets, people will be forced to invest elsewhere. Why? How does that work? Do you mean in the stock market? Buying shares in companies? Specific shares are often volatile, and some tank completely. This is hardly a good investment.
Managed funds trend upwards over time, in my understanding. Is that an actual good investment? It certainly won’t put a roof over your head unless you are EXTREMELY wealthy in the first place.
It’s all very confusing. In order to make these other investments, you will have to educate people in how to do it safely and without getting ripped off by traders.
You can’t assume that everyone knows how to make good investments and is simply choosing housing.
Housing investments are the simplest type to understand. That’s why people will preferentially go for it. Even in the face of a tax. Because if it’s a rental property, they will simply pass that cost on to the tenants.