Housing crisis!

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#868941 30-Jul-2013 21:58

networkn: A CGT is not something I am against per se, however it needs to be introduced lightly at least at first to Exclude the 1 house you live in (even if you sell it and buy another) and 1 investment property.

That is how I think it will be introduced, and if labour get back in (with a leadership change), as that is one of htie core policies, it will be a given. But unfortionately people will get around it, by perhaps putting the house under a child name or using trusts. The richest people usually find a way around these things. THis is why I think it needs to apply to all, which it will probabky happen eventually anyway. A stamp duty is another additional tax too, that could be applied.

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#868942 30-Jul-2013 22:01

ajobbins:
nickb800: Same way as the baby boomers paid for the pension of their parents, it is the children of baby boomers that will pay for the baby boomers' pensions. The proverbial will hit the fan when the baby boomers reach retirement age, as the ratio of taxpayers to pensioners balloons out. Fewer taxpayers paying for more people on pensions = generation Y chained down with government debt to fund their parents' pensions. It's going to be fiscally ugly.

The general attitude of boomers tho is not that they paid for their parents retirement, and now it's their children turn to pay for theirs, but more one of entitlement.

They seem to think that paying tax during their life was a 'savings scheme' for retirement that they now want to cash in on. They don't care/understand that their tax dollars pay for many other things.

The thing is that many people haven't saved, or maybe only used their house as a savings vehicle, so were relying on the super. So it can't just be removed or the age risen. It has to be done gradually. In Oz it is all asset or income tested, but then that is a disincentive to save or work during retirement, or people will have their money in trusts so they don't own anything themselves. It has been shown that people are healthier and live longer in retirement if they continue to work.

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#868944 30-Jul-2013 22:06

macuser: Probably because a family home is not traditionally an investment, and isn't tax deductible like an investment property. That said, I'm not an accountant...

But surely something that you earn value on (like tax on interest on cash deposits) should earn tax?

My concern is it that property investors will circumvent it. A blanket approach makes it easy to administer and hard to avoid.

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#868947 30-Jul-2013 22:11

nate:
macuser: Probably because a family home is not traditionally an investment, and isn't tax deductible like an investment property. That said, I'm not an accountant...

But surely something that you earn value on (like tax on interest on cash deposits) should earn tax?

My concern is it that property investors will circumvent it. A blanket approach makes it easy to administer and hard to avoid.

+1, that is why I am all for a blanket CGT. People will still make a profit, but just not as much of one, and that tax goes to pay for things like schools and health anyway.

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#868949 30-Jul-2013 22:14

mattwnz:
networkn: A CGT is not something I am against per se, however it needs to be introduced lightly at least at first to Exclude the 1 house you live in (even if you sell it and buy another) and 1 investment property.

That is how I think it will be introduced, and if labour get back in (with a leadership change), as that is one of htie core policies, it will be a given. But unfortionately people will get around it, by perhaps putting the house under a child name or using trusts. The richest people usually find a way around these things. THis is why I think it needs to apply to all, which it will probabky happen eventually anyway. A stamp duty is another additional tax too, that could be applied.

Do you know anything about trusts? You can set one up for next to nothing. It's not a vehicle for the wealthy exclusively, lots of low income (relatively) and lots and lots and lots of middle income people have them.

If you are hoping Labour will save the world I would look again. The last few "policies" they have suggested have been LOL.

If you want something sure fire to help you build wealth, get educated, work hard, sacrifice and save.

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#868951 30-Jul-2013 22:20

networkn: I don't agree with this. Well not all of it. Young people need to understand that to get a house takes sacrifice. Stop buying Iphones, Ipods, Ipads, overseas holidays, expensive cars etc, and SAVE. It's what the rest of us who DID those things have to show for OUR sacrifice. Stop expecting the entire country to subsidise your lifestyle choices.

I agree with this to a point, but a few of these things aren't unreasonable and are really a drop in the bucket compared to the $80,000k in cash you would need for a 20% deposit on a 400k house (The VERY low end of the Auckland market)

Stop buying $750K houses right off the bat, buy a 100-150k apartment, pay it off over a few years by putting all your earnings into it, THEN upgrade.

Where on earth can you buy a $100-150k apartment? Dannevirke? Even if you could do that, how on earth do you save ~$30k for the deposit by the time you pay your tax, student loan, kiwisaver, rent, bills, work clothes etc when the average out of uni salary is under $40k/yr. I didn't make a lot more than that myself out of uni, but thankfully I make a lot more now (And saving for a house has become a realistic goal), but had I stayed on that sort of money, I would have taken me a decade or more just to save the deposit of the day. But the way property prices are rising, it probably would not even be close to enough. Let alone saving for a 400k+ plus house (Which will probably get you a small run down house in a bad part of Auckland.)

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#868952 30-Jul-2013 22:23

nate:
macuser: Probably because a family home is not traditionally an investment, and isn't tax deductible like an investment property. That said, I'm not an accountant...

But surely something that you earn value on (like tax on interest on cash deposits) should earn tax?

My concern is it that property investors will circumvent it. A blanket approach makes it easy to administer and hard to avoid.

I don't disagree, but it would be a much harder sell.

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mattwnz

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#868954 30-Jul-2013 22:26

networkn:
mattwnz:
networkn: A CGT is not something I am against per se, however it needs to be introduced lightly at least at first to Exclude the 1 house you live in (even if you sell it and buy another) and 1 investment property.

That is how I think it will be introduced, and if labour get back in (with a leadership change), as that is one of htie core policies, it will be a given. But unfortionately people will get around it, by perhaps putting the house under a child name or using trusts. The richest people usually find a way around these things. THis is why I think it needs to apply to all, which it will probabky happen eventually anyway. A stamp duty is another additional tax too, that could be applied.

Do you know anything about trusts? You can set one up for next to nothing. It's not a vehicle for the wealthy exclusively, lots of low income (relatively) and lots and lots and lots of middle income people have them.

If you are hoping Labour will save the world I would look again. The last few "policies" they have suggested have been LOL.

If you want something sure fire to help you build wealth, get educated, work hard, sacrifice and save.

Yes, and I know many trusts are not setup correctly, and could be seen a sham trusts due to this. Some people set them up so they don't have any assets in their name, so if they go into rest homes they can get a full subsidy, but now the government can claw that money back.

Personally I am not a labour fan and I would never vote for them, but I know that housing is a problem that is causing other problems in the economy, and at least they see this, if only as a vote grabber.

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#868955 30-Jul-2013 22:28

ajobbins:
networkn: I don't agree with this. Well not all of it. Young people need to understand that to get a house takes sacrifice. Stop buying Iphones, Ipods, Ipads, overseas holidays, expensive cars etc, and SAVE. It's what the rest of us who DID those things have to show for OUR sacrifice. Stop expecting the entire country to subsidise your lifestyle choices.

I agree with this to a point, but a few of these things aren't unreasonable and are really a drop in the bucket compared to the $80,000k in cash you would need for a 20% deposit on a 400k house (The VERY low end of the Auckland market)

Stop buying $750K houses right off the bat, buy a 100-150k apartment, pay it off over a few years by putting all your earnings into it, THEN upgrade.

Where on earth can you buy a $100-150k apartment? Dannevirke? Even if you could do that, how on earth do you save ~$30k for the deposit by the time you pay your tax, student loan, kiwisaver, rent, bills, work clothes etc when the average out of uni salary is under $40k/yr. I didn't make a lot more than that myself out of uni, but thankfully I make a lot more now (And saving for a house has become a realistic goal), but had I stayed on that sort of money, I would have taken me a decade or more just to save the deposit of the day. But the way property prices are rising, it probably would not even be close to enough. Let alone saving for a 400k+ plus house (Which will probably get you a small run down house in a bad part of Auckland.)

Gimme a break. If people can't do a bit of research, no wonder they can't get jobs that pay money so they can buy a house.

http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?search=1&cid=5748&sidebar=1&rptpath=350-5748-3399-&132=PROPERTY&134=&153=&29=&122=0&122=0&49=100000&49=150000&178=0&178=0&sidebarSearch_keypresses=0&sidebarSearch_suggested=0

This is the very first thing I found by filtering 100-150K on trademe under property. Perhaps you can't live in Auckland if you don't have the means, however I get an email most months from some real estate place in Auckand CBD that specializes in apartments and there are plenty there under 200K. Two of my staff THIS YEAR bought houses well under 400K

Try lowering you expectations on your FIRST home, like you parents and grandparents before you did. Educated hard workers do not earn 40K for long USUALLY.

Your assertion that a "few of these things are reasonable" I don't agree with. It's about priorities, and at the end of the day buying property CAN be affordable.

gjm

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#868962 30-Jul-2013 22:29

networkn:
mattwnz:
networkn: A CGT is not something I am against per se, however it needs to be introduced lightly at least at first to Exclude the 1 house you live in (even if you sell it and buy another) and 1 investment property.

That is how I think it will be introduced, and if labour get back in (with a leadership change), as that is one of htie core policies, it will be a given. But unfortionately people will get around it, by perhaps putting the house under a child name or using trusts. The richest people usually find a way around these things. THis is why I think it needs to apply to all, which it will probabky happen eventually anyway. A stamp duty is another additional tax too, that could be applied.

Do you know anything about trusts? You can set one up for next to nothing. It's not a vehicle for the wealthy exclusively, lots of low income (relatively) and lots and lots and lots of middle income people have them.

If you are hoping Labour will save the world I would look again. The last few "policies" they have suggested have been LOL.

If you want something sure fire to help you build wealth, get educated, work hard, sacrifice and save.

+1

My wife and I worked our butts off and saved like heck to get a 20% deposit for our first house in Auckland as well as paying off our student loans. This took us about 6 years. While our friends were out having a good time, buying crap they didn't need and pissing away their money we sacrificed to get what we have. Now they complain that they cant afford a house and that its not fair that we have made a significant gain on our investment. Life's funny like that huh.

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#868965 30-Jul-2013 22:37

mattwnz:
nate:
macuser: Probably because a family home is not traditionally an investment, and isn't tax deductible like an investment property. That said, I'm not an accountant...

But surely something that you earn value on (like tax on interest on cash deposits) should earn tax?

My concern is it that property investors will circumvent it. A blanket approach makes it easy to administer and hard to avoid.

+1, that is why I am all for a blanket CGT. People will still make a profit, but just not as much of one, and that tax goes to pay for things like schools and health anyway.

Capital gains tax or any tax on the sale of personal property is a really dumb idea unfortunately, imagine having to pay tax on items you sell on trademe... You have already paid income tax, GST etc...

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#868974 30-Jul-2013 22:49

macuser:
mattwnz:
nate:
macuser: Probably because a family home is not traditionally an investment, and isn't tax deductible like an investment property. That said, I'm not an accountant...

But surely something that you earn value on (like tax on interest on cash deposits) should earn tax?

My concern is it that property investors will circumvent it. A blanket approach makes it easy to administer and hard to avoid.

+1, that is why I am all for a blanket CGT. People will still make a profit, but just not as much of one, and that tax goes to pay for things like schools and health anyway.

Capital gains tax or any tax on the sale of personal property is a really dumb idea unfortunately, imagine having to pay tax on items you sell on trademe... You have already paid income tax, GST etc...

We are talking about houses/property that rise in value over time, which are essentially assets. Most things that are sold on trademe lose value, and are consumables, and I am sure the government would want to refund taxes on their loss. eg loss in value of a car.

mattwnz

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#868976 30-Jul-2013 22:52

gjm:

+1

My wife and I worked our butts off and saved like heck to get a 20% deposit for our first house in Auckland as well as paying off our student loans. This took us about 6 years. While our friends were out having a good time, buying crap they didn't need and pissing away their money we sacrificed to get what we have. Now they complain that they cant afford a house and that its not fair that we have made a significant gain on our investment. Life's funny like that huh.

Likewise I have saved and don't spend, but the problem is that the goal posts keep getting futher away. You can still get a house on a minimal deposit, so there is currently no need for a 20% deposit, but that has mean that people could afford to pay more, thus pushing up prices on a short supply of houses. The problem is really supply, and it isn't helped by the lolly scramble going down in Christchurch, as many tradies have moved down there where house building costs more than anywhere else.

ajobbins

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#868977 30-Jul-2013 22:57

networkn:
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?search=1&cid=5748&sidebar=1&rptpath=350-5748-3399-&132=PROPERTY&134=&153=&29=&122=0&122=0&49=100000&49=150000&178=0&178=0&sidebarSearch_keypresses=0&sidebarSearch_suggested=0

This is the very first thing I found by filtering 100-150K on trademe under property. Perhaps you can't live in Auckland if you don't have the means, however I get an email most months from some real estate place in Auckand CBD that specializes in apartments and there are plenty there under 200K. Two of my staff THIS YEAR bought houses well under 400K

Unfortunately a big city is the reality for many people with professional careers. There just aren't the jobs in other places. IT is a good example of this, the industry is HEAVILY concentrated in Auckland, Wellington and to a lesser extent Christchurch and Hamilton. It's very good and well saying go and by a $150,000 house in Rotorua, but there is a good chance you won't get a job there and if you do, the salary and potential growth (both in money and experience terms) is less.

I looked through a few pages of you link, and almost all of the sub-$200k apartments listed are 'investment' apartments. Ie. they are part of managed complexes for students or services apartment hotels. You can't live in them yourself.

It's also worth noting that banks have MUCH stricter requirements on lending for apartments (due to the fact you don't own a block of land ie. the bit that appreciates in value). When I was looking a couple of years back, the bank told me they generally require a 30-50% deposit for apartments, depending on the risk profile. That means, even if you can get an apartment in Auckland for say $180k, you might still be asked for a $90k deposit.

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mattwnz

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#868982 30-Jul-2013 23:22

ajobbins:

I looked through a few pages of you link, and almost all of the sub-$200k apartments listed are 'investment' apartments. Ie. they are part of managed complexes for students or services apartment hotels. You can't live in them yourself.

With apartments or townhouses, other things to look out for are leasehold vs freehold, where leasehold they may have huge ground rents. Also body corprate fees, where in Wellington, due to insurance problems, the fees can be huge. There is often a reason why a property is cheap.

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