Negative gearing question?

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Networkn
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#1219364 21-Jan-2015 18:01

nathan: some loon?

you want to negative gear against your salary because you don't want to pay tax? Tax that pays for hospitals, schools, police, dole bludgers and defence? who's going to protect you when the plebs with no money and houses need food and come raid you property? Build bigger gated walled communities to hide behind and pay for private police.

yeah its totally fair that people can get rich off capital gains off their land/house, paying minimal tax, while plebs are in indentured servitude for the rest of their lives.
It just cannot be good for society that young people will have a 40 year mortgage, paying twice the price for a house, paying it off just in time to retire then die.

Baby boomers, be happy that you are going to watch your grand kids be forced to move overseas to brighter countries, make sure you have good bandwidth so you can watch them grow up over Skype and Facebook.

This illusion of continual growth raping the earths resources on a continual quest to make more money is insanely short sighted. It must come to a grinding halt anytime soon....

the reality is that a lot of peoples kids are never going to be able to afford to buy a house because (some) people that own multiple houses are greedy, and NZers think they are amazingly smart and getting rich by selling overprices housing backwards and forwards between each other

Houses are a productive part of the NZ economy how?

No one will change this status quo because local government decision makers own multiple houses, central government decision makers are own multiple homes and yeeha they're all "getting rich" why would you even want to lower the 10-20% annual property price growth inflation.

Good Lord, Rant much? :)

I presume to help these poor poor people out you'll be donating your entire salary to help those people into houses?

You forgot to mention that people wouldn't need 40 year mortgages if they made sensible buying choices (2 bedroom in Mangere flat vs 12 bedroom mansion in Remuera) and didn't buy Ip5, Sp3's and 65" TV's.

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#1219366 21-Jan-2015 18:09

networkn: You forgot to mention that people wouldn't need 40 year mortgages if they made sensible buying choices (2 bedroom in Mangere flat vs 12 bedroom mansion in Remuera) and didn't buy Ip5, Sp3's and 65" TV's.

6 in the entire market to choose from, with an average price of $442,00 (of those listed with prices). So only an $88,000 deposit required (Or about 2 whole years of income without spending a cent for the average family after tax - assuming no student loans). Or about 80 of these iPhones, gaming consoles and big screen TV's you think are the problem.

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#1219376 21-Jan-2015 18:31

ajobbins:
networkn: You forgot to mention that people wouldn't need 40 year mortgages if they made sensible buying choices (2 bedroom in Mangere flat vs 12 bedroom mansion in Remuera) and didn't buy Ip5, Sp3's and 65" TV's.

6 in the entire market to choose from, with an average price of $442,00 (of those listed with prices). So only an $88,000 deposit required (Or about 2 whole years of income without spending a cent for the average family after tax - assuming no student loans). Or about 80 of these iPhones, gaming consoles and big screen TV's you think are the problem.

/me sighs.

Give me a break. You think trademe is the only place to list property in NZ ? Also I didn't say it was the entire problem, I said it was a contributing factor. Mangere isn't the only area. You think it's reasonable to be able to save for a deposit in 2 years? I know some people who saved that long for a deposit on a car.

You are just being argumentative and I can't be bothered.

I was simply trying to provide SOME balance to a one sided rant.

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#1219384 21-Jan-2015 18:42

networkn:

/me sighs.

Give me a break. You think trademe is the only place to list property in NZ ?

Sure, but it's the biggest and a pretty good indication

Also I didn't say it was the entire problem, I said it was a contributing factor. Mangere isn't the only area.

You're arguing that we're all off buying fancy toys, but even if we did, that's only about 2% of the deposit required for a low end, below average price for a house in a not so safe area.

You are just being argumentative and I can't be bothered.

Your generation is so lazy (note: This is not a serious comment)

I was simply trying to provide SOME balance to a one sided rant.

No, you're trying to pretend like times haven't changed and that buying a home isn't any harder for young people than it was in the past. The numbers do not lie, it is much, much harder.

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Bobdn

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#1219454 21-Jan-2015 20:43

nathan: some loon?

you want to negative gear against your salary because you don't want to pay tax? Tax that pays for hospitals, schools, police, dole bludgers and defence? who's going to protect you when the plebs with no money and houses need food and come raid you property? Build bigger gated walled communities to hide behind and pay for private police.

yeah its totally fair that people can get rich off capital gains off their land/house, paying minimal tax, while plebs are in indentured servitude for the rest of their lives.
It just cannot be good for society that young people will have a 40 year mortgage, paying twice the price for a house, paying it off just in time to retire then die.

Baby boomers, be happy that you are going to watch your grand kids be forced to move overseas to brighter countries, make sure you have good bandwidth so you can watch them grow up over Skype and Facebook.

This illusion of continual growth raping the earths resources on a continual quest to make more money is insanely short sighted. It must come to a grinding halt anytime soon....

the reality is that a lot of peoples kids are never going to be able to afford to buy a house because (some) people that own multiple houses are greedy, and NZers think they are amazingly smart and getting rich by selling overprices housing backwards and forwards between each other

Houses are a productive part of the NZ economy how?

No one will change this status quo because local government decision makers own multiple houses, central government decision makers are own multiple homes and yeeha they're all "getting rich" why would you even want to lower the 10-20% annual property price growth inflation.

Wow, you have some really strong views on tax and tax obligations. What's your views on tax paid by multinationals?

Nah, just kidding - I don't expect you to go there sister ;)

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#1219470 21-Jan-2015 21:01

My entry into the Auckland market will be a tiny bit easier next month. 12% pay rise. Student loan paid off!
Getting way off topic now, but I do wonder if a political party will target the non home owners in the next decade or two. I presume as ownership rates keep dropping there will be more and more voters who don't own a home. I've been quite happy renting with my partner, our deposit is pretty grunty and we're saving 4k a month, but I guess there comes a time when you can't keep four mountainbikes in the spare bedroom any longer.

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#1219479 21-Jan-2015 21:24

ajobbins:
networkn:

/me sighs.

Give me a break. You think trademe is the only place to list property in NZ ?

Sure, but it's the biggest and a pretty good indication

Also I didn't say it was the entire problem, I said it was a contributing factor. Mangere isn't the only area.

You're arguing that we're all off buying fancy toys, but even if we did, that's only about 2% of the deposit required for a low end, below average price for a house in a not so safe area.

You are just being argumentative and I can't be bothered.

Your generation is so lazy (note: This is not a serious comment)

I was simply trying to provide SOME balance to a one sided rant.

No, you're trying to pretend like times haven't changed and that buying a home isn't any harder for young people than it was in the past. The numbers do not lie, it is much, much harder.

I have come from NOTHING. My family was beyond poor, and the vast majority of my family has had a long term connection to the benefit. I woke one day and decided I didn't want to live like that, picked up my grades, moved out of my area, got a job attended school. I got my first job at 15 and my first full time job at 17. Since then I have never had a holiday longer than 2 weeks long including when I got married, and when I was sick with cancer. I worked at my first real IT job over 100 hours a week earning less than most managers at mcdonalds make, then started my own business where I worked even longer hours. My wife and I lived apart for large periods of our relationship because she could earn more money out of area. We bought our first house in Mt Roskill and put every cent we could find in, to get the interest down. I didn't have an OE like most of my peers. I don't smoke, drink or do drugs (Nor have I ever).

Home Ownership is a privilege, not a right and requires sacrifice.

Most people have an interest rate of 7% or less, and my wifes parents first home was at 23% with a low equity penalty (I am not sure of what the number was).

Home ownership has always been challenging and it's challenging today, but it's not impossible.

You are being disingenuous to take the two or three tiny examples I provided as the ONLY luxury items that a lot of people today consider "essentials" including overseas holidays, nice cars and regular dining out.

I see people buying houses all the time, and I am not talking billionaire overseas investors, but regular people with regular jobs.

Some people will not be able to afford to own a house, this is the way it was always.

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#1219495 21-Jan-2015 21:42

mudguard: My entry into the Auckland market will be a tiny bit easier next month. 12% pay rise. Student loan paid off!
Getting way off topic now, but I do wonder if a political party will target the non home owners in the next decade or two. I presume as ownership rates keep dropping there will be more and more voters who don't own a home.

Political parties love to chase votes by promoting the 'kiwi dream', and in doing so they are encouraging financially naive young people to get themselves up to their eyeballs in debt thinking that it's guaranteed to make them better off.

New Zealanders need to get over the perception that renting is only for poor people.

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#1219497 21-Jan-2015 21:45

Political parties love to chase votes by promoting the 'kiwi dream', and in doing so they are encouraging financially naive young people to get themselves up to their eyeballs in debt thinking that it's guaranteed to make them better off.

New Zealanders need to get over the perception that renting is only for poor people.

Agreed, it just isn't possible in a normal economy for everyone to own homes, otherwise there would be no rental property or property investment.

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#1219498 21-Jan-2015 21:45

Bobdn:
nathan: some loon?

you want to negative gear against your salary because you don't want to pay tax? Tax that pays for hospitals, schools, police, dole bludgers and defence? who's going to protect you when the plebs with no money and houses need food and come raid you property? Build bigger gated walled communities to hide behind and pay for private police.

yeah its totally fair that people can get rich off capital gains off their land/house, paying minimal tax, while plebs are in indentured servitude for the rest of their lives.
It just cannot be good for society that young people will have a 40 year mortgage, paying twice the price for a house, paying it off just in time to retire then die.

Baby boomers, be happy that you are going to watch your grand kids be forced to move overseas to brighter countries, make sure you have good bandwidth so you can watch them grow up over Skype and Facebook.

This illusion of continual growth raping the earths resources on a continual quest to make more money is insanely short sighted. It must come to a grinding halt anytime soon....

the reality is that a lot of peoples kids are never going to be able to afford to buy a house because (some) people that own multiple houses are greedy, and NZers think they are amazingly smart and getting rich by selling overprices housing backwards and forwards between each other

Houses are a productive part of the NZ economy how?

No one will change this status quo because local government decision makers own multiple houses, central government decision makers are own multiple homes and yeeha they're all "getting rich" why would you even want to lower the 10-20% annual property price growth inflation.

Wow, you have some really strong views on tax and tax obligations. What's your views on tax paid by multinationals?

Nah, just kidding - I don't expect you to go there sister ;)

i did also mention that I have no problem with arranging your affairs if its legal

I also know that I'm proud to work for a multinational that does actually pay tax in NZ, and employees over 200 people that are also paying PAYE, not like many of the others that you are presumably alluding to

None of that changes the fact that Auckland houses are "over priced", that many young people will never live in or own their own homes now, that houses are not a productive part of an economy et al

Bobdn

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#1219570 21-Jan-2015 22:58

Nathan, just to be clear I wasn't alluding to any companies in particular but I am aware that the issue of tax paid by multinationals is a hot topic, particularly in Europe.

As an investor, I expect companies to minimise their tax (within the law) where they can and I really, really, want them to make insane amounts of money. What a crazy attitude that is these days but, you know, that's just how I am. I should be embarrassed about it but I'm not! I love "continual growth" and the "continual quest" to make money. I love it. Seriously. I can't be the only one but sometimes I feel this way.

I also don't have a problem with individuals exploring ways to minimise their tax bill like the OP was trying to do. As long as they're acting within the law, great! I just don't see what the problem is.

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#1219590 21-Jan-2015 23:22

yes the system is broken and rewarding the wrong behaviour

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#1219615 22-Jan-2015 00:14

if the house price tumbled today, here is an example to think about:

consider someone that bought a house with a current market value of $800K paid $400K 5 years ago and has a mortgage of $400K or less on it. If the prices tumbled back to be $400K again, would they lose anything on it? Not really - its just a paper loss. Buying a similar house would cost the same, upgrading would probably be cheaper after the market crash.

depending on how much was spent, someone who renovated that house might not really lose anything either as the price should reflect the renovations.

consider though, someone who bought that house today, for $800K, then saw the market tumble. They would lose that $400K in cold hard cash (or mortgage).

someone who 'upgraded' their house somewhere along the way would also lose out. they no doubt bought a more expensive house and threw the diff on their mortgage.

so receding property values wouldn't necessarily affect everyone - but it would hit the 'upgraders' (who probably make up half the rising property price problem), and the first-timers (which would really suck).

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#1219790 22-Jan-2015 09:15

alasta: New Zealanders need to get over the perception that renting is only for poor people.

I think the perception is rapidly changing to thinking that home ownership is only for rich people.

I would say neither is true. But I do feel that it is extremely difficult for a young couple with children (or a single person) to be able to afford to get into the property market. Certainly we don't face the crippling interest rates of the past, but getting your foot in the door can be difficult.

I do think that perhaps sometimes people look at the house they want, and say "I can never afford that"; instead of working out what they CAN afford and looking at that section of the market. It is still very difficult though.

networkn

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#1219799 22-Jan-2015 09:27

he past, but getting your foot in the door can be difficult.

I do think that perhaps sometimes people look at the house they want, and say "I can never afford that"; instead of working out what they CAN afford and looking at that section of the market. It is still very difficult though.

I agree with this part of your statement. People today want lots of bedrooms, usually big houses in nice "safe" areas. When I looked at the house my wifes parents lived in when they first got married, I couldn't imagine anyone buying a place like that and actually living in it today, but they attribute it as the first step in
the building of their current wealth profile.

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