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Discourage property speculation and investment in rental properties

Discourage property speculation and investment in rental properties

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.

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    • James Turnbull
      commented 2016-12-09 19:05:47 +1300
      Ian … I’m with you 100% and for all the reasons you gave.

      On top it looks like a nightmare to operate (if it were ever adopted) and I seriously think it would be horrifying expensive to enforce.

      Suppose I spend on home improvements ( real life example here as i’m planning to)

      Job looks like about 40k all up and that money is going to pay for materials but mostly it pays tradies in building, plumbing, gas fitting, electrical, gib stopping, plus a kitchen designer sales person and a bunch of their staff back at the factory, Builder Boss and Kitchen Co make a small profit, Treasury gets GST

      1) How does ToP IRD know that I spent money and increased the value of my home ?
      Top IRD inspector at every corner seeing who does what?
      Do I have to self report … otherwise how does IRD know that the value of my home has increased, and who assesses the value of the increase?

      That’s a significant question and not ever 40k of Home Improvement adds 40K of value and worse bad design might even devalue the home … looks horribly complex

      2) But, because I understand that adding value to my home is also going to involve my Fictional Benefit In Kind Tax (Would FIC-BIKT be OK term ) increasing. So, why would I spend money on the home rather than blowing it on consumer goods, partying or a foreign holiday ?

      3) Along the same line of thinking here …
      I want my house to be warmer in winter…. BUT
      If I install wall insulation that affects the value of the home and FIC-BIKT increases … yes?
      If I install an energy efficient fixed gas fire that also affects the value of the home and FFIKBIKT increases … yes?
      If I install clean green solar hot water or electrical panels that affects the value of the home and FFIKBIKT increases … yes?

      All of those improvements involve ‘parts and labour’ and I’m helping keep people in work … and chucking some GST in the pot…

      But hang on … all of those improvements mean that my weekly costs of running the household increases my FICBIKT liability ? And I ain’t had a decent pay rise since forever ago ?

      AND to heap a crime upon the matter I’ve contravened ToP Policy because they have stated the aim of “flatlining” property prices … Gulp – now what penalty am I facing ?

      How about REPAIRS … my house is due a roof, it’s not yet rusted through but 30 K spend on their will surely lift the value and the FIC-BIKT charge ?

      What about families – ToPs wants to help families right ,,, BUT if have to pay FIC-BIKT then does it increase as I’m now renting to an extra person ? If older kids lose their jobs and come back home does FIC-BIKT rise?

      I think taxes based on fictional notional values are ludicrous !

      I’m away to have a nice hot cup of tea and a big scream into some pillows …
    • James Turnbull
      tagged this with easy 2016-12-09 19:05:47 +1300
    • James Turnbull
      tagged this with important 2016-12-09 19:05:47 +1300
    • James Turnbull
      tagged this with good 2016-12-09 19:05:46 +1300
    • Ian Howarth
      published this page in How would you make New Zealand Fair Again? 2016-12-09 17:03:57 +1300