income splitting for families on where only one parent works capped at 80k...no tax on first 20k (should be admin savings in ird) .... hit multi nationals that move profits offshore.. Make weed legal .... tax it.... Use savings from justice system to fix police numbers ... Encourage a hemp industry .... Pump oil , its not a fossil fuel , there's no dinosaurs on Saturn's moon Titan. Pivot east , re establish Russian and Iranian markets ... dump America and there imoral empire
Sorry, I can't support this in it's entirety. I believe our property sector should be viewed the same as any other investment if it's a rental property. The capital gains loopholes should be closed. But I disagree that I should have either pay rent or pay a tax if I own my own home. Now 101 economics says your house is not an investment. We should have policy removing new zealanders generational view that their home is an investment, but I don't want to pay one extra red cent to live in a house I own and live in. Ive been taxed on that money, Ive paid interest on any money ive borrowed. I don't want to be forced to keep earning money to pay a tax every year. This will forced retiree's to have to sell.and I can't back a policy that forces me to make sensible investment decisions or penalises me if I choose to make an unsound use of MY capital. I have the right to be stupid and I want to keep it.
Adding to the concept of a home as shelter rather than an investment, the concept of family and personal security needs to be considered. If a taxation system removes or reduces security of tenure, then we have a problem. Without some concrete examples of how the TOP tax reform would work to confirm otherwise, I just see a loss of family security (why own a house when you're paying tax on asset value over which you have no control and which will continue regardless of real income?). That loss of security does not occur when a tax system is based on that real income (which includes taxes on consumption). I'd be more supportive of capital gains taxes on residential land and property (surely this would operate to solve a large chunk of the tax loophole described), with the balance of government income gained via, largely, consumption taxes (potentially selective) and a flat income tax rate. Surely there is a lot of valuable community stability to be gained by encouraging home ownership, controlling property speculation, while encouraging fair opportunities for people to rent as required (which requires property investment by the owners of capital who are relying on rental income and not property speculation). I note that Berlin house prices are used as an example of housing price control - but the Germans have a property sales tax and a 25% capital gains tax. Why aren't these considered as TOP tax options if they appear to have the desired effect?
In an ideal & ultimately fair world, everyone will own their own home. No one would rent. (Maybe short term visitors) The basic need of shelter would not be a source of wealth for a minority population of investors. (Not talking about tourists & travellers) Homes are not investments. The price of building materials needs looked at seriously in NZ in context of global comparison. 2 major NZ building supply companies have been found guilty of collusion & price fixing. I guess the fine was a small price. There are a number of ways to reduce or eliminate house price increasing beyond affordability. These measures would be non PC, appear to threaten a free market & be unpopular among the wealthy or those trying to be wealthy. It would also take more courage than the NZ government or NZ people could muster. But they would work.
Looking at the big picture , NZ does need another political party to counter balance the proliferation of right wing conservative parties . So I applaud Gareth for taking the bold lead here . But oh , what a disastrous start with this 1st policy . TOPs has hit rock bottom with this one . The political animal in me knows this is a total vote killer . This does nothing to win the hearts and minds of the people . Labour tried a capital gains tax on property in the last election . They lost . So there is a lesson there . Why repeat history by raising the tax spectra as the No1 policy ?. Its political suicide . There are so many other issues confronting NZ at this time to lead and inspire the populace with . If you want to go where no party has gone before Gareth there are a hundred more popular vote catching ways to start with . For instance start with putting more money in everyones pockets by reducing New Zealanders energy costs so that all Kiwis can benefit from the savings . We have some of the highest electricity costs in the world thanks in part to privatisation and deregulation of the energy sector . Follow Elon Musks example from Tesla by powering the economy with cheap affordable solar energy . Its easy . Make very roof in NZ a solar energy producer and pay households for producing energy for the national grid . Then bring in rebates and tax incentives for buying electric and hydrogen vehicles to power the transport fleet so NZer’s can begin to participate in and benefit from the world wide move away from more expensive polluting fossil fuels . Expensive for us and the environment . Its time NZ led the world in renewal energy and cheap clean energy transport systems . This is Tops’s chance so show they have a real vision that impacts us all in a positive way . Make NZ great again by leading with green technologies the world needs now . If Elon Musk ( Telsa ) can create 35,000 jobs doing just this , so can NZ . But wait .There’s more . If you want to gather more tax revenue for a fairer NZ the answer is simple . Do what Canada’s Prime Minister Trudeau has done for Canada . Last year he got voted in on a policy of legalising marijuana and taxing it . If Canada , Colorado , Washington , Oregon , Alaska California plus numerous countries around the world can , then so can New Zealand legalise and tax Marijuana . Here is your increased tax revenue to pay for free education including new universities and schools . More money for health with no more waiting lists for hospitals and free or subsidised doctors visits . Plus it would provide the revenue stream for building a new national electrified rail network throughout NZ so NZ businesses can transport goods more cheaply . Yes revenue from Marijuana sales is that good of a revenue producer . Just look at what its done for Colorado alone . I’ve been there and seen it . And thats just 2 vote winning policies for starters . Wanna hear another 98 or so ?. Simon Lynn .
I don't agree that this policy is fair because it fails to take into account the impact of interest. The scenarios are faulty. A person who buys a $300,000 house is not getting a free benefit because they are paying interest which is often the equivalent of the rental they would be paying. On the other hand, a person who invests in a house and leases it earns rentals that offset the interest they pay. Effectively they therefore often pay no costs (rent = interest), no tax and get a tax free capital gain at the end.
My suggestion would therefore be to require all people who want to take a deduction for interest on a residential property to register that property into a scheme (a bit like registering for GST) because they are obviously buying the property as a commercial venture. Any gains on the value of that property upon future transfer (including transfer out of the scheme) would be subject to tax. This scheme would automatically exempt those people who are buying their property for their family home and yes it would exempt the really rich who can buy a property and not rent it or live in it, but I don't think those purchases are behind the the significant increase in investment properties.
1. If you buy a house then sell it for a profit then you must pay tax on the profit unless you can prove you lived it in for 80% of the time you owned it... Simply enforce the existing capital gain laws, the tax on the profit to be witheld as a duty until the prove of residency in the property is proven...
2. ALL home ownership is to be applied to an IRD number or numbers if joint ownership, no exceptions, all foreign owners must register with the IRD House purchase prices and sales are recorded with the IRD. That should apply to all home ownership (not just new sales)
3. Trusts similarily must register with the IRD and pay tax on capital gains like any other business
4. The extra tax collected to be used to build new homes for the low income earners to be able to "rent to buy"... Low Income earners can't save for a deposit but should be encouraged to invest in a home they can call their own by way of paying rent for a home they can call theirs after ten year of occupancy and good rent paying record... They would be entitled to apply for a mortgage on their property with a portion of their rent paid to be assigned as their deposit on the home....
5. The tax free exemption should only apply to the family home... Bachs and Holiday homes will have to be counted as capital gain and taxed otherwise foreign owners will use this as a loophole. But the tax is only payable on sale, if kept as a family bach then tax is not paid...
6. A "Nett Worth increase" tax should only be applied to the very rich... A bill as it were for operating in this great country and becoming wealthy... Should only apply to value increases that are greater than $200K in a year and should only be a nominal figure (5-10%).
NZ is fair already. The moaners have other priorities to owning a house to live in. Their priorities can include breeding, with multiple babies, a dog a sky TV dish, eating out, a passport and overseas holidays. I own my house debt free - I have no babies,sky, dog or cat a passport or overseas holidays. Its about choices or if you guys get your way a communist state that Kim Jong Un would be proud of.
Stamp duty, capital gains tax, adjusting the ability to claim interest costs, extending capital gains to the family home when the IRD deems that property sales are speculative (a decision that can be appealed), and taxing beneficial owners of trusts with trust income and trust capital gains. But NOT with the "Living death duty" approach you've suggested, where you tax assets with no associated cash income. This is a tax on the New Zealand dream. You're talking about changing our culture through tax policy, and yet the underlying reason is to make housing more affordable. I was really looking forward to having you in parliament, especially with the weakened position of National now that John Key has departed. I thought it would be a great opportunity to see some equalisation in the economy – but this is unelectable, no matter how intellectually or economically correct you feel it may be.
as described in considerable detail in Tim O'Connell's thread ... perhaps looking there and elsewhere you'd have seen what people have suggested ?
And ( said peacefully as a request )
Please get your head around the notion that 500 people stood up and put their money down to back GM - perhaps foolishly we ( me anyway) thought it was to be a collective 'OUR' party?
The heading above
So 'YOU' don't like the idea of 'OUR' tax reforms ... what would YOU suggest ... etc
is written in divisive language and the press coverage to date is focussed on the divisive nature of the policy. I for one have NOT been politically active in any way ( that was even asked on the joining form ... not sure why, and I doubt that has any more chance of an answer than dozens other questions in the threads.)
I have an image of a bunch of guys sitting fuming at what they are seeing on screen muttering 'Thiss iss not what we wanted ...'
Bit sad if you take it that way ... petulance is not pretty amongs children, less so with Adults.
What you'e getting here is market research of the very best kind -
People being honest, open, raw and you'd never get that from a tick box survey ( as those generally are unwittingly designed to produce an answer that aligns with the inside thinking'
Jamie Brahm pointed out the number of political party failures ... and despite may other challenges in our conversation we're agreed that 'this' is not effective.
I f the 'in house people' who have paid to join can't agree' then forgive the metaphor but there's not a stray cats chance in a monitored nature reserve that the public, who DO resist change, who DO tend to have a long term favoured party to vote for, and who DO tend to look at their own self interest and vote accordingly are going to accept the idea as policy.
Even worse perhaps, many of those who have previously registered 'willing to help' are probably not going to go leaflet stuffing or offer to talk to people on the street to try and sell a policy they oppose.
And if you think it can't get worse than that ... I also 'suppose' that some members might well be so opposed to this as to even consider joining another party mow that their 'political interest' has been unleashed !
You can only sell ideas that people want to buy into ...
Homeowners and landlords already pay rates- a tax upon housing. Your imaginary rental tax persecutes single home owners only- landlords wouldn't be affected, so there's no impact on slowing the property market to be gained by it and it could be sidestepped by setting up a company, selling your house to it then renting back from the company.
Far simpler to base the rates on the last purchase value of the property- landlords wouldn't want to buy for that much as they couldn't rent out a RV $350k house they bought for $1m and make profit due to the rates. If you then close the tax loopholes for making losses on rental properties, you slow the market. Stop foreign purchases of property, even through intermediaries (only citizens & permanent residents should be able to buy) and you're getting close to making NZ affordable for kiwis. Finally, a national database of ownership- one property registered as your home, all other properties deemed as investments with a capital gains tax applied.
I'm not an economist and only given this some basic thought. If you apply a 15% GST when you purchase a house and make that GST refundable or partially refundable depending on whether you make a capital gain when you sell it in X many years at 1% refund per year minus the capital gain for 15 years. So for example you buy a house for $1m and pay $150000 GST then
1) you sell it in 5 years for $1.25m and make a 100000 capital gain - no refund (5/15 of GST - 100000=-50000=no refund)
2) you sell it in 5 years for $1.1m - refund $50,000 (5/15 of GST-0=5/15 GST)
3) you sell it in 2years for $1.1m - refund $20,000 (2/15 -0=2/15 of GST)
4) you sell it in 15+ years for $1.1m- refund $150000 (15/15-0=all of GST)
5) you sell it in 15+ years for $1.3m - refund $100,000 (15/15 of GST-50,000=100,000)
Something like that anyway.
This would stop speculation as flipping houses would mean less refunds -encourage long term living
You pay the tax upfront so the government gets to use this money instead of waiting for you to sell it to get a capital gains tax - it also bring homes into line with GST.
Elderly people with no cash flow don't need to pay an annual tax - its already paid
Making a loss on your home after 15 years would be rare so the government is guaranteed this tax.
It's kind of a capital gains tax that stops speculation but gives the govt money upfront.
LVR wouldn't be applied to the GST content and the GST can be mortgageable so young people don't need to save more.
Would this be simpler or would this not work?
This is most destructive policy if this goes in action. For example I own the house and brought 20 months ago and have 50% equity. Me and my one of work mate started same job together 6 years ago. I worked 70+ hours to save the deposit and same hours to pay more towards the mortgage. My workmate work less hours and spend all on pubs, wines, and overseas trips and still living in rented single room. Do you think I work extraand hard without any holidays for year to pay tax for those kind of people who do not want to work or save? We work hard to increase our equity so one day we can also enjoy our life. If you think housing affordability then some people are always on debit and some people pay mortgage, rates, insurance from similar pay and still save to pay extra mortgage. If this policy applies then I better of to sell my house and work part time. How about this people getting old and on low income now and paid mortgage in decades and you want them to pay huge tax because they have higer equity. It would be greatest punishment ever for hard worker and good savers. If you are happy to pay $25k extra every year then I suggest you to put that money in donation. We are not rich like you and we still have 15 more years pay mortgage to pay rest of 50% equity.
I would like to see TOP make 5% however it seems unlikely with a start like this.... thankfully you there is time for reflection and a rethink. The change promoted would be a step to far and too much of an adjustment; yes even to talk about. NZers have difficulty with the idea of a capital gain tax (even excluding the family home). With this policy I fear that TOP can sound the death knell before it even begins... the family home is sacred. To make a difference TOP must first make it to the table... Exclude the family home. I would like to read some example on how this applies to other asset types other than land and buildings.
Lending for profit, if you follow basic economics, means the prices of everything people borrow for, is massively inflated. The market price is set by what it will bear. What it will bear is magnified hugely by mortgages. Let a much smaller limit on borrowing for profit, set some lower maximum interest rates for such borrowing (phased in), and in doing so, free the people - rents will be lower, houses cheaper, cars cheaper.
For catch the 1% - tax for transactions, and for purchases. As a small business owner I pay proportionally much more tax than a megacorp. That's plain wrong. With a transactional tax, they'd pay more, and me less - even if they operated overseas to dodge taxes. And with a GST and transaction system, instead of a income and business tax system, people buying boats, and huge houses, would be paying for their wealth there - people would pay proportionate to the lifestyle they lead (obviously such a system would apply to everything, not just some goods and services).
My system is more radical. Banks, investors, speculators, and loan outfits would all lose out (boohoo, lol) - but people would be vastly better off, on the whole. In fact all that money saved from artificially inflated housing prices due to fiat, could be spent in our economy, generating potentially globally standout GDP levels, and actual, on the ground, standards of living.
We need people to be able to cheaply obtain their own home where they can be free from the influence of others. Not penalise people for owning a home, encourage it.
Your policy would mean average people couldn't afford their own home. But rich people, who can afford the taxes, could still have investment properties. And the average person would be forced to live in them, paying rent, and making the rich richer. It's populist but completely short-sighted, terrible economics. There's a far better solution.
Housing is expensive fundamentally due to supply and demand. Supply is restricted through regulations on land, and building regulations. Remove or reduce this red tape and people will be able to build their own homes again. Housing will become cheaper, everyone will be able to afford to have a home. And NZ will become fairer again.
It doesn't cost much to build a house. It only costs a lot if you have to comply with the building regulations.
Simple law change - if it's single storey, wood or steel framed, with a tin roof, it's permitted and anyone can build it. They just have to get an electrician to do the electrical work. We know such buildings are earthquake safe, most people have enough brains to build one adequately well.
This one minor change would solve NZ's housing problems virtually overnight, save screeds of money, and reduce property prices and rents through competition benefiting all poor people at the expense of wealthy property owners.