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16. Why do you want to tax the family home?

16. Why do you want to tax the family home?

Answer

We’re not. We’re taxing the income you receive from providing that roof to the occupants each year.
If you are an owner-occupier you just happen to be the occupant as well as the landlord. That is no reason for tax not to be paid on the transaction. 

The benefit you receive each year from owning the house is every bit as real that you receive from owning a bank deposit or from rent paid by a tenant. Why should you be tax exempt when tenants have to pay rent from their income
after tax and their landlord pay tax on that income received?

Showing 8 reactions

  • Keith Nicholas
    followed this page 2016-12-09 16:11:42 +1300
  • Phil Marshall
    followed this page 2016-12-09 04:55:15 +1300
  • James Turnbull
    commented 2016-12-07 22:01:30 +1300
    INCOME – The amount of money received during a period of time in exchange for labor or services.

    ASSET- an item of property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies

    We are taxed on income Oliver and those who worked hard to acquire their homes bought the ASSET out of that taxed income.

    This is NOT Germany and the scenario here is very different. the country is only 130 years or so old and people came here and built homes (often with their own hands) so of course there’s a lot of emotion emotion attached and a reluctance to do it your way.

    But a home is NOT a business.

    If a person decided to operate a business then there are a raft of tax offsets – in short the business ( whether Ltd Co or Sole Trader ) is only taxed on the PROFIT resulting from the activity of the business. If it makes no profit then there’s no tax payable. If the Business BOUGHT a property then are you suggesting that it also will have to be assessed for tax on a Fictional Rent to the commercial market value ?

    As it is Kiwis are taxed worse than businesses …

    If I could be Person JT Co Ltd I’d be entitled to claim all of my ‘operating expenses’ against income … and the Opex of JT Co Ltd would plainly have to include all of my accomodation, heat and light, vehicle running expense s and fuel ( for humans this is called food )

    A Business gets tax offsets for accomodation, heat, light fuel and all other expenses … people get taxed on their income then they get taxed on every necessity of life including food and water.

    If you’re looking to commit a very public political suicide … crack on bonny lad !
  • Andi Shen Liu
    commented 2016-12-07 17:22:08 +1300
    The main reasoning I see behind this is that rental income is taxed while self-rent is not – why don’t we help subsidise everyone equally by scrapping rental tax altogether?
  • Doug Sainsbury
    commented 2016-12-07 11:24:48 +1300
    My only issue with this policy is there is no indication of how this is going to be taxed and at what rate? How will you come up with a market rent for each property or will it be based on the value of the house? Will this take into account mortgage? What happens if you own a home and rent out rooms?

    I have no problem with the theory, it makes sense and it is a conversation we need to have.
  • Oliver Krollmann
    commented 2016-12-07 11:01:33 +1300
    This is probably the most important FAQ for home owners. The reasoning behind this tax and the examples comparing home ownership to financial investments and renting out property need to be published and explained again and again and again, until people begin to understand the loophole, stop perceiving home ownership as being something special and worthy of protection, and accept that it is just another form of investment or business.
    My wife and I grew up, owned a home and ran a business in Germany before we moved to NZ, and there were such things as annual land taxes and land sale levies to pay when you owned or traded property, which might have contributed to the much more stable house prices there compared to NZ. But that system was far from perfect, for example it did not factor in any mortgages you had and just taxed you on land and property values that were backdated decades ago.
    The difficulty for all of us New Zealanders (we’re citizens now, as well as home owners, so it includes us) will be to get our head around that particular loophole of not taxing imputed rent, accept it as such, and let go of our obsession with property.
    If we slammed this approach just because it closed a loophole many of us have been benefitting from at the expense of others, we’d be no better than the Establishment Parties politicians we like to rant about.
  • Oliver Krollmann
    followed this page 2016-12-07 10:04:08 +1300
  • Alex Supertramp
    commented 2016-12-07 09:38:02 +1300
    ok this is the tough part, i’m sure we will all struggle with this, but i do see the intent. we need to look for other investments , ones that generate jobs, ones that produce something and get out of this pyramid scheme of property.
    its fair ! I like finding loopholes and if this was not in place a group or family could just buy houses and put no one in them, say they are occupiers and get exempt.