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3. How do I find the cash to pay this new tax?

3. How do I find the cash to pay this new tax?

Answer

From the income tax cuts for most. Otherwise, the same place you get the cash to pay your rates – by phasing this in we have an orderly adjustment. 

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  • Debby Verdonk
    followed this page 2017-07-13 10:50:35 +1200
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  • James Turnbull
    commented 2016-12-07 21:32:23 +1300
    It’s still not exactly clear ‘what new tax’ you are referring to?

    Give it a name … that would be useful perhaps ?

    Something like Superimposed on Housing Imaginary Income Tax …

    How many people would vote for S H I I T ?

    You’ll forgive my wry sense of humour here … but I put my hand up on day one and I’m disappointed :-(
  • John Zoetebier
    commented 2016-12-07 21:21:35 +1300
    I am with Adam as well.
    Taxing fictional income like on your house or fictional interest has already been implemented in the Netherlands, with disastrous results. The Dutch now pay tax over fictional 4% interest on bank savings that have negative interest.
    Similarly they pay tax over fictional rent as if they would rent out their own home.
    It’s an insane tax system that made millions of people leave the country. The rich and talented leave and the poor stay, Within 20 years now every city has a food bank and an ever increasing number of people that cannot pay of their debt anymore.
    Tax on fictional income will only affect the hard working middle class, not the poor and not the very rich.
    The very rich have their own way to dodge taxes.
    The hard working middle class has the choice between living the good life now and put the burden of their retirement on other tax payers. Or leave the country and live somewhere else, like so many people in Europe are doing.
  • Tim O'Donnell
    commented 2016-12-07 20:58:44 +1300
    I’m with Adam. I’ve gone without so I could save while others pissed their money away & now you’re going to penalise me for making it. It’s better for me to be in debt with a mortgage & give my interest to a foreign owned bank to send off shore? Either that or pay a slum lord whatever he ask (because he’s going to make sure he makes a profit). I get to the end of my life & you’re going to slowly suck every cent out of the asset I used to have. Hmmm, I’m hoping I’m missing something. I know you mean well & you’re intelligent. How does this make sure every person & entity pays their fair share…..
  • adam shand
    commented 2016-12-07 19:42:26 +1300
    I totally agree that house prices in NZ are a problem and I don’t mind taking a hit if that’s what it takes to get things back under control. But (if I understand correctly), I HATE this proposal. Here’s why …
    • I worked a high stress, high paid job for a long time, basically until it physically wasn’t healthy for me anymore.
    • My wife and I have a mortgage free home.
    • Our intention is to exit the rat race and live cheap.


    Now you’re going to tax that asset and I’m going to have to earn money every year to pay that tax.

    I’ll support just about anything which helps solve this problem, but not a yearly tax on my home. I’ve spent a lot of energy figuring out how to get out from under the system, and I’m almost there. For the love of everything, please don’t throw me back to the wolves.

    I’m aware that this post could easily make me sound like a spoiled brat, “boo hoo poor Adam”. But this impacts everyone who does their time, gets the kids grown up, buys a nice house and then decides to pursue the hobby business they always wanted to.

    This effects everyone who has scrapped together money somehow for a bit of land to live cheap on.

    This screws everyone who for whatever reason has a relatively large capital asset and a relatively low yearly income.

    … because the tax cuts on a relatively small income won’t make up for the new taxes on a relatively expensive house.
  • Norman Cates
    commented 2016-12-07 18:32:55 +1300
    I honestly do not understand this policy at all. I’m no economics expert. And most people aren’t.

    So can you PLEASE explain this much better. I do not see how people will be paying less tax at all.

    It seems that you are trying to tax our “possible” income, as if we were receiving rent from the property.

    This means that everyone owning a property (even the family home) will pay more tax. This is even people who have a lower income.

    This is like paying another set of rates.

    And I’m also paying a mortgage. So since you want to treat my imputed rental (sic) as an income, then I should also be able to treat the interest on my mortgage as an expense.

    Honestly, I would prefer a capital gains tax. It’s MUCH more transparent about what’s going on.

    For a point of reference, my goal at this point is to buy some property in the next few years, and hold on to them as a investment for my retirement. I have no intention to gouge renters or make a quick buck. The goal is simply to have them for 20 years or so and then they are my retirement income.

    How will your plan affect this idea? Please be transparent because this strategy is probably very common.

    The government can’t be relied on to provide for my retirement and Kiwisaver certainly won’t do it, so it’s up to me.

    And property is pretty easy and reliable. Other kind of business investments are much more difficult and fraught with danger.
  • Gareth Morgan
    commented 2016-12-07 16:11:35 +1300
    Edited the question to make more sense
  • James Turnbull
    commented 2016-12-07 15:18:26 +1300
    Scratches head … Where does the cash come from ???

    What cash are we talking about here ?
  • Oliver Krollmann
    followed this page 2016-12-07 09:40:40 +1300