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Farms?

Farms?

How does this policy affect farms. eg what happens with a farmer who owns a $5mill farm that this year returns $100k. Tax is assessed on the asset value and say it comes to $300k (6%). Next year the farm makes a loss of $100k but is still assessed to owe $300k. The farm would need to clear $400k+ every year just to pay the tax and show a tiny return. Few farms make returns like this

Official response from completed

http://www.top.org.nz/how_would_farms_be_treated

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    • Gareth Morgan
      responded with completed 2016-12-12 10:39:40 +1300
    • Tristan Kiddie
      tagged this with i have the same question 2016-12-10 15:03:27 +1300
    • James Brunskill
      tagged this with i have the same question 2016-12-10 08:13:15 +1300
    • Tim O'Donnell
      commented 2016-12-10 00:05:55 +1300
      I’m unsure how this would work for a farm. A farmer can’t rent the land back because they’ll still be paying the tax + a profit to the landlord.

      Justin, You would pay this tax every year. You would have a reduced income tax to help cover the difference but in the case of farmers it might be difficult. If there are any exemptions or reductions you open up loopholes to be exploited. Businesses will purposely try to post a paper loss if it means a reduction in tax.
    • Tim O'Donnell
      tagged this with i have the same question 2016-12-10 00:05:55 +1300
    • Oliver Krollmann
      followed this page 2016-12-09 20:33:59 +1300
    • Hayden Donnelly
      commented 2016-12-09 19:38:05 +1300
      Justin (in reactions) – I think you are underestimating how extremely communist Gareth’s policy is… It really is the case that Gareth wants to tax you for owning anything and everything. Cars, land, Houses, boats each and every year and even though you already paid tax on the income you will be using to buy or invest in this property. This tax will destroy the very idea of owning any kind of property outright! All property will be partially owned and taxed by the state! We will all be bloody slaves working all our lives to stay ahead of this bloody tax that keeps dragging us back towards the average level. It is a tax on success and hard work. It will be like a constant current pulling anyone back who tries to achieve a higher standard of living and dragging UP anyone who is at the other end of the spectrum, whether they work hard or NOT! This is an UN-fair tax for so many reasons, not least of which, it will discourage buying a home to live in, whilst making it still viable to buy multiple houses to rent out to other people because this tax would not apply to you if you already are paying tax on rent revenue. It does the exact opposite of what most New Zealanders would want. Crazy!
    • Justin Harwood
      commented 2016-12-09 18:23:57 +1300
      Isn’t the tax on land / asset appreciation of only that year? So the farm would have to go from $5mil to $10mill for the farmer to pay another $300k. Is that right? So if you own a house in Ponsonby and it appreciates from $1.5mill to $2mill in a year, the tax is on the $500k. Then the next year it goes from $2mill to $2.2mill the tax that year is on $200k? This is why it would slow the appreciation (and therefore incentive to invest tax free) on housing. I may have this wrong but Gareth can correct me if I do.
    • Al Furg
      published this page in Ask a question about policy #1 2016-12-09 17:32:07 +1300