Real estate, post COVID-19 level 4 (since 2020)

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#3349082 1-Mar-2025 21:59

mattwnz:

i think the council services need to be funded from general taxes including income tax. That means everyone pays a fair share based on their income. At the moment rates are a form of wealth tax, and it has no relationship with the amount of services are used by a property. Because of this councils aren’t able to capture enough rates. A house with 8 adults use a lot more services than the same house with just 1 person in it. Yet per person, a person in the 8 person houses pays just 1/8 of the amount. That imo is unfair and shows that more money could be captured if they change things

How is that different to income tax? "Fairness" is far from the primary purpose of a taxation system.

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#3349096 1-Mar-2025 23:11

Handle9:

mattwnz:

i think the council services need to be funded from general taxes including income tax. That means everyone pays a fair share based on their income. At the moment rates are a form of wealth tax, and it has no relationship with the amount of services are used by a property. Because of this councils aren’t able to capture enough rates. A house with 8 adults use a lot more services than the same house with just 1 person in it. Yet per person, a person in the 8 person houses pays just 1/8 of the amount. That imo is unfair and shows that more money could be captured if they change things

How is that different to income tax? "Fairness" is far from the primary purpose of a taxation system.

With income tax, the more you earn, the tax more you pay. So you can afford to pay it and it is paying back into the community for all services needed by that person that are used to earn that money. Rates are based on a property value and that property makes no income unless run as a business. So the property has no ability to pay the rates. Instead comes from the owner. Councils state that someone who owns a higher value house usually has more ability to pay higher rates, so that is why higher value properties pay more in council rates. But that often is not the case, especially amongst the retired. This is totally different to income tax where they are able to pay the extra tax due to earning more to pay for it.

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#3349109 2-Mar-2025 00:06

mattwnz:

Handle9:

How is that different to income tax? "Fairness" is far from the primary purpose of a taxation system.

With income tax, the more you earn, the tax more you pay. So you can afford to pay it and it is paying back into the community for all services needed by that person that are used to earn that money. Rates are based on a property value and that property makes no income unless run as a business. So the property has no ability to pay the rates. Instead comes from the owner. Councils state that someone who owns a higher value house usually has more ability to pay higher rates, so that is why higher value properties pay more in council rates. But that often is not the case, especially amongst the retired. This is totally different to income tax where they are able to pay the extra tax due to earning more to pay for it.

One is taxing income, one is taxing wealth. They are both reasonable ways to collect tax.

There are many ways for the retired to extract value from a high value home. One of course is to sell the property and move in to something smaller. This would equally be more "fair" as it would make larger properties available for those who need them.

Whatever you do someone will be penalized and some will be better off, that's the nature of taxes. It's a fantasy to think you can make a system that doesn't have winners and losers.

tweake

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#3349180 2-Mar-2025 11:22

mattwnz:

i think the council services need to be funded from general taxes including income tax. That means everyone pays a fair share based on their income. At the moment rates are a form of wealth tax, and it has no relationship with the amount of services are used by a property. Because of this councils aren’t able to capture enough rates. A house with 8 adults use a lot more services than the same house with just 1 person in it. Yet per person, a person in the 8 person houses pays just 1/8 of the amount. That imo is unfair and shows that more money could be captured if they change things

if there is 8 tax payers in the house, they are probably poor and earn very little. also we have targeted rates, eg water, sewage, rubbish, all paid separately from rates. the question is do individuals pay, or does the household pay? there has always been a push for individuals pay for their usage, so others don't have to pay which is typically the goal. but thats not really how society works. everyone chips in even if they don't use it.

certainly i think council funding needs a rethink, especially where developers contributions and housing market are concerned.

but councils serve a good purpose as local people have more leverage on the council compared to govt.

mattwnz

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#3349213 2-Mar-2025 14:53

If 8 people are living in a rental, it is highly likely that that house has a lower value compared to others, so is already paying less in rates. The question is, as a landlord is essentially running a business with the house to generate revenue , whether councils should charge commercial rates on rentals to generate more money, and better reflect its usage of council services. Many councils in NZ still don’t have targeted rates such as water services based on usage. The current system simply doesn’t allow councils to easily increase rates and also risk pushing older people out of their homes, or having to take up debt in their retirement years.
Charging developers more will only push up House prices and it doesn’t account for future maintenance which needs rates.

tweake

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#3349216 2-Mar-2025 15:19

mattwnz:

If 8 people are living in a rental, it is highly likely that that house has a lower value compared to others, so is already paying less in rates. The question is, as a landlord is essentially running a business with the house to generate revenue , whether councils should charge commercial rates on rentals to generate more money, and better reflect its usage of council services. Many councils in NZ still don’t have targeted rates such as water services based on usage. The current system simply doesn’t allow councils to easily increase rates and also risk pushing older people out of their homes, or having to take up debt in their retirement years.
Charging developers more will only push up House prices and it doesn’t account for future maintenance which needs rates.

the councils i've dealt with all have target rates.

for decades people paid almost nothing for water, then hello its all failing and needs upgrades. in comes targeted rates at high prices and boy did the retirees jump up and down. its really tough on those single income people. one town even banned tanks in town to force people onto town water, but then town water supply could not keep up and they asked people to use tanks again.

councils can and do increase rates, if the voters let them. which is the common problem.

yes, we need to offload costs off developers. this new funding thing looks interesting. having the govt pay the costs instead might do it.

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mattwnz

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#3349218 2-Mar-2025 15:27

When our council was redoing the plan for new developments, we put in a submission that required all new houses to install underground water tanks for garden and toilets , where the property is large enough. The council already had this requirement on some new subdivisions. But the council rejected the idea. But they now have very limited capacity and have to spend a lot on water infrastructure.

tweake

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#3349219 2-Mar-2025 15:30

mattwnz:

When our council was redoing the plan for new developments, we put in a submission that required all new houses to install underground water tanks for garden and toilets , where the property is large enough. The council already had this requirement on some new subdivisions. But the council rejected the idea. But they now have very limited capacity and have to spend a lot on water infrastructure.

and its not hard to do especially if your also having a detention storm water tank installed, which is increasingly common. the one tank can do both.

mattwnz

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#3349230 2-Mar-2025 16:06

tweake:

mattwnz:

When our council was redoing the plan for new developments, we put in a submission that required all new houses to install underground water tanks for garden and toilets , where the property is large enough. The council already had this requirement on some new subdivisions. But the council rejected the idea. But they now have very limited capacity and have to spend a lot on water infrastructure.

and its not hard to do especially if your also having a detention storm water tank installed, which is increasingly common. the one tank can do both.

IMO, my experience is that some councils will only do the bare minimum and don't like to take on ideas from the public when it differs from the status quo. When I refer to council, I am basically referring to council staff, not councilors, as councils are essentially run by council staff coming up with any ideas and making decisions, including making their recommendations to councilors to approve or deny those plans. Councilors tend to sign them off, but get the blame when things go wrong.

lxsw20

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#3349235 2-Mar-2025 16:32

lxsw20:

We put an offer in on a place that was being sold through Deadline sale (basically a blind auction) and just missed out. Our lawyer was saying it wasn't auctions pushing prices up so much as it was Deadline sale.

It's not the missing out on the house that hurts as much as all the admin we will have to do again to get an offer in on the next place - getting the bank to approve the house so we can do Cash offer, getting proof that the house can be insured etc.

Welp we've ended up building - settled on the land last Monday and build should be completed by December....well thats what the builder says so ill take that with a big old grain of salt.

It probably cost us another 100k on getting something 20 years old, but we know what we are getting and we got to design it exactly how we want it. We consider it worth it.

Plan is to hang on the current house as a rental so no pressure on when we move/selling and all that drama.

Handle9

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#3349248 2-Mar-2025 19:18

lxsw20:

lxsw20:

We put an offer in on a place that was being sold through Deadline sale (basically a blind auction) and just missed out. Our lawyer was saying it wasn't auctions pushing prices up so much as it was Deadline sale.

It's not the missing out on the house that hurts as much as all the admin we will have to do again to get an offer in on the next place - getting the bank to approve the house so we can do Cash offer, getting proof that the house can be insured etc.

Welp we've ended up building - settled on the land last Monday and build should be completed by December....well thats what the builder says so ill take that with a big old grain of salt.

It probably cost us another 100k on getting something 20 years old, but we know what we are getting and we got to design it exactly how we want it. We consider it worth it.

Plan is to hang on the current house as a rental so no pressure on when we move/selling and all that drama.

Congratulations! It’s unlikely to be all smooth sailing but at least you get to choose what compromises to make. I hope it goes well for you.

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Handle9

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#3349252 2-Mar-2025 19:23

mattwnz:

If 8 people are living in a rental, it is highly likely that that house has a lower value compared to others, so is already paying less in rates. The question is, as a landlord is essentially running a business with the house to generate revenue , whether councils should charge commercial rates on rentals to generate more money, and better reflect its usage of council services. Many councils in NZ still don’t have targeted rates such as water services based on usage. The current system simply doesn’t allow councils to easily increase rates and also risk pushing older people out of their homes, or having to take up debt in their retirement years.
Charging developers more will only push up House prices and it doesn’t account for future maintenance which needs rates.

So your proposal is to move the rates burden from the wealthy to the poor? Retirees may be cash poor but if they have a freehold house they are actually wealthy.

As a group they have also had the benefit of lower house prices, low rates and free tertiary education. How is moving the burden for rates to younger people in employment with none of those advantages “fair?”

mattwnz

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#3349255 2-Mar-2025 19:51

No I am more for sharing out the cost more evenly which will also enable the council to collect more in rates. At the moment wealthy people who own rentals are benefiting from their rentals paying less rates as they are usually lower value older properties . They have no incentive to improve those homes. Likewise if you buy a new home, you end up usually paying significantly more in rates because that house is usually worth more.

Handle9

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#3349257 2-Mar-2025 19:59

mattwnz:

No I am more for sharing out the cost more evenly which will also enable the council to collect more in rates. At the moment wealthy people who own rentals are benefiting from their rentals paying less rates as they are usually lower value older properties . They have no incentive to improve those homes. Likewise if you buy a new home, you end up usually paying significantly more in rates because that house is usually worth more.

You are all over the place and not making a great deal of sense. The purpose of rates isn’t to get people to improve properties, it’s to collect enough money for councils to operate.

Regardless of what mechanism you use to collect rates there are going to be some people getting more benefit than others. Rates are a relatively simple way to do this and as good as any other mechanism. If there is a change there should be a clear and demonstrable benefit. This clear benefit doesn’t exist so it’s a pointless exercise to waste a huge amount of effort and money implementing a change.

The pressure to keep rates low will always be there, regardless of the assessment mechanism.

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#3470380 15-Mar-2026 10:27

So you bought at the peak, now what? Wellington homeowner says ‘human cost’ greater than $300k loss

Bevan Muollo, a senior construction manager, bought a house in Wellington in 2021 for $1.2 million. Five years later, he’s selling it at a loss of $300,000.

Muollo is among 5000 Kiwis who bought in the housing market boom and subsequently sold at a gross loss. That’s about 60% of people who bought in that period.

Property analyst Cotality defines the latest peak as the last three months of 2021 and first three of 2022.

An estimated 5000 people who bought homes over that period have since sold for a lower price, said its chief economist, Kelvin Davidson.

“That’s about 60% of all purchasers in that window who have subsequently resold at a gross loss.”

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