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36. Won’t it take away the incentive to invest in improvements in your house?

36. Won’t it take away the incentive to invest in improvements in your house?

Answer

Depends what you’re doing the improvements for. If they’re for you to enjoy then that’s a benefit or income and should be taxed. If you’re doing it because you dressing it up to sell well yes there’s not much point if house prices aren’t rising (in real terms) which is the whole objective here - to let the price of housing reflect whatever those who wish to own their own home simply to enjoy it. Not to let the price of housing reflect the vale of the tax loophole.

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    • Matt
      commented 2017-06-27 21:42:44 +1200
      I’m for cooling the housing market in favour of more investment into things that aren’t houses but,

      This is the part I don’t get about this policy,

      I work hard to earn an income, I pay tax on that income, I save enough to pull together a deposit for a house and mortgage. I save some more to upgrade insulation, heating and a few other niceties to improve my standard of living for my family and this improvement is seen as Taxable??
    • Ant Brown
      commented 2016-12-15 10:09:27 +1300
      There is still a point to dressing a house to sell. It doesn’t mean you’ll get more (you probably will), but it means you increase your chance of selling in a market where you are competing against other houses for sale. It’s not about the amount it sells for. It’s whether it sells at all or not. The potential buyer may rule out the house that needs tidied up & buy the dressed house. To them, your undressed house was worth zero. They rejected it altogether for the other house that had more appeal.