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  Reply # 1392118 22-Sep-2015 18:12
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gzt:
This is likely to reduce the attraction of quick flick transactions. It will also level the field a bit when compared to building new houses, but not much.


In my experience, renovating in Australia I was far more likely to buy, reno and hold than buy reno and flick because of CGT. Some may disagree. Just an opinion.

I see a lot more talk of buying 10 investment long term rental type strategies in OZ than that sort of talk in NZ.

The flip side in OZ, when it comes time to retire, you can move into the house I believe to avoid that situation. One I am now far from privileged enough to do.

The GFC did dip the RE market here, 8% ish? But nothing near what it should of thanks to the government pulling smoke and mirrors to prop our economy up which is what has imo started the initial snow ball of the current bubble.

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  Reply # 1392209 22-Sep-2015 20:44
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joker97: if no residents can only buy a new build, that helps in increasing building supply.

by the way, when people mention "foreigners", you have no idea if they are a resident or non resident. ....


Half measures, mate. I would propose the following bill (any mates in Beehive to "push it through"?):

"No NZ Citizen can buy property in New Zealand, unless substantial levy towards Property Development is paid!" They allow to buy Citizenship to people who do not even speak English for $10M, then why not something in relation to property.

Fare? That will drop property prices way back. I think.

Non-Citizen? Ok, levy of $100.000 (non-refundable, when you sell the house - forget about your $100K) towards infrastructure development. The bill should simultaneously minimize sums developers currently have to pay to the Council for every new development. This would contribute to drop the house prices of new homes a bit and stimulate new developments.

Currently PR holders have to wait 5 years for their Citizenship if they wish one but many live on PR for over 10-15 years and more holding on to their mainland citizenship which they have to lose if they've chosen NZ citizenship.

Do not want to lose the one where you are no longer live? Pay premium to contribute to the local property development.
Came with a sack of money and want the house straight away? Levy, please.
Do not want to pay levy? Rent is your option for 5 years.
Came without money - save for you deposit, 5 years will pass by quickly.

I would be very much interested to hear solid arguments why this is not a rock-solid proposition to the Government.







 
 
 
 


gzt

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  Reply # 1392211 22-Sep-2015 20:48
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mattwnz:
gzt: The government is tightening the test for taxation of capital gain. Previously it depended on 'intention' which was open to interpretation. The new test will simply apply if the property is sold within two years.

Original announcement:

http://www.radionz.co.nz/news/political/273847/govt-to-tighten-tax-on-capital-gains

Update from the minister:

http://taxpolicy.ird.govt.nz/news/2015-09-10-property-tax-bills-receive-third-reading

From 1st October those property transactions will have tax applied at the rate of the beneficiary of the sale.

This is likely to reduce the attraction of quick flick transactions. It will also level the field a bit when compared to building new houses, but not much.


The thing is that this also appear to apply to your primary residence. So people saying there is no CGT on your place of residence are incorrect IMO. If you are buying houses that you live in to do up and flick on, then you have to pay tax, if that was your intention to make a capaital gain, and I beleive that is currently the case. If they were bringing in a targeted CGT like Labour wanted to bring in, and it only applied to second homes, then that is something that is very difficult to police, with potential loopholes. IMO to make things simple, they should just apply it to all houses, and not have any exceptions, like they do with GST. I mean, why should property give preference over other forms of investment, and not be taxed on the gains? At least we don't have other forms of  tax in NZ that can relate to property, like stamp duty and inheritance taxes.

Both links clearly state it will not apply to the family home. How that is expressed exactly in the legislation? I have not looked. But clearly that is the intention. It will not apply to a primary residence.

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  Reply # 1392364 22-Sep-2015 23:49
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RUKI: 
"No NZ Citizen can buy property in New Zealand, unless substantial levy towards Property Development is paid!" They allow to buy Citizenship to people who do not even speak English for $10M, then why not something in relation to property.

Fare? That will drop property prices way back. I think.


Unless you are planning to somehow make NZ a communist state, you can forget about anything that would limit trade.

Currently PR holders have to wait 5 years for their Citizenship if they wish one but many live on PR for over 10-15 years and more holding on to their mainland citizenship which they have to lose if they've chosen NZ citizenship.

Do not want to lose the one where you are no longer live? Pay premium to contribute to the local property development.


Yep, that includes many europeans living in New Zealand. If you come from a country where dual citizenship isn't allowed, and you are from within the EU, you would severely limit your future options on where to live in the future by giving up your citizenship. 

If something like this were to happen, you would see a LOT of europeans moving out of NZ. Might help the housing situation a little for a short while, but I can guarantee you would loose a lot of valuable highly skilled workforce that way.

Nobody in their right mind would enact this kind of policy. Besides, it does smell of a typical communist move.

I would be very much interested to hear solid arguments why this is not a rock-solid proposition to the Government.


I think I gave you some good ones up there.




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  Reply # 1392369 23-Sep-2015 00:47
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gzt:
mattwnz:
gzt: The government is tightening the test for taxation of capital gain. Previously it depended on 'intention' which was open to interpretation. The new test will simply apply if the property is sold within two years.

Original announcement:

http://www.radionz.co.nz/news/political/273847/govt-to-tighten-tax-on-capital-gains

Update from the minister:

http://taxpolicy.ird.govt.nz/news/2015-09-10-property-tax-bills-receive-third-reading

From 1st October those property transactions will have tax applied at the rate of the beneficiary of the sale.

This is likely to reduce the attraction of quick flick transactions. It will also level the field a bit when compared to building new houses, but not much.


The thing is that this also appear to apply to your primary residence. So people saying there is no CGT on your place of residence are incorrect IMO. If you are buying houses that you live in to do up and flick on, then you have to pay tax, if that was your intention to make a capaital gain, and I beleive that is currently the case. If they were bringing in a targeted CGT like Labour wanted to bring in, and it only applied to second homes, then that is something that is very difficult to police, with potential loopholes. IMO to make things simple, they should just apply it to all houses, and not have any exceptions, like they do with GST. I mean, why should property give preference over other forms of investment, and not be taxed on the gains? At least we don't have other forms of  tax in NZ that can relate to property, like stamp duty and inheritance taxes.

Both links clearly state it will not apply to the family home. How that is expressed exactly in the legislation? I have not looked. But clearly that is the intention. It will not apply to a primary residence.


Maybe, but my point was that if someone is buying and selling their own home every 1-2 years, then it will likely be subject to CGT anyway, if your intention was to make a profit on it. eg doing it up to sell and then moving onto a new house and project. Unless you can prove otherwise eg. you needed to sell to move to another area for a job etc.Those laws have been in place for many years. So all this law actually does and clarify things, and give a date. 

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  Reply # 1392498 23-Sep-2015 09:42
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jarledb:

I think I gave you some good ones up there.


I wish, but no, you did not. I can read between the lines, mate. "Missed Legolas" with those references ...LOL.

Tere is no link between somebody buying property in Auckland under current rules and International trade.

Those non-NZ Citizens who have lived here long enough do already have properties and some have a few, so regardless of them having or not NZ Citizenship - the only way they could be impacted [by proposal] is when they intend to buy their next Investment property.

That will very much doubtfully influence their decision to move out of the country.
And one has to be out of their mind or really have "6-digit size reason" on their table to return to Europe in the nearest future...

My proposal IMO would impact only International speculators who have no intention to make New Zealand their home.

If you have better proposal how to cut on that kind of speculation - please share your ideas.







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  Reply # 1394224 25-Sep-2015 10:14
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I think its the obvious factor for the property explosion.

Auckland is one of the most expensive RE markets in the world, there is no common sense reason for that to be the case.

This insane sky rocket in the last 3 years shouldnt have occured.

The thing I find the funniest is the people that think its normal and oh how they sold their property for $1.5m like they did something special.

Personally I think its tarnished the city lifestyle for anyone other than those well established in the local property market.

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  Reply # 1394257 25-Sep-2015 10:32
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jarledb:
RUKI: 
"No NZ Citizen can buy property in New Zealand, unless substantial levy towards Property Development is paid!" They allow to buy Citizenship to people who do not even speak English for $10M, then why not something in relation to property.

Fare? That will drop property prices way back. I think.


Unless you are planning to somehow make NZ a communist state, you can forget about anything that would limit trade.

Currently PR holders have to wait 5 years for their Citizenship if they wish one but many live on PR for over 10-15 years and more holding on to their mainland citizenship which they have to lose if they've chosen NZ citizenship.

Do not want to lose the one where you are no longer live? Pay premium to contribute to the local property development.


Yep, that includes many europeans living in New Zealand. If you come from a country where dual citizenship isn't allowed, and you are from within the EU, you would severely limit your future options on where to live in the future by giving up your citizenship. 

If something like this were to happen, you would see a LOT of europeans moving out of NZ. Might help the housing situation a little for a short while, but I can guarantee you would loose a lot of valuable highly skilled workforce that way.

Nobody in their right mind would enact this kind of policy. Besides, it does smell of a typical communist move.

I would be very much interested to hear solid arguments why this is not a rock-solid proposition to the Government.


I think I gave you some good ones up there.


Which EU country does not allow dual citizenship?

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  Reply # 1394345 25-Sep-2015 12:39
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joker97:
Which EU country does not allow dual citizenship?


One of the bigger countries that do not allow dual citizenship is Germany (although they allow dual citizenship with EU countries), others include Austria, Estonia, Hungary and some others.

Norway (although not a EU country, but a part of EFTA) does not allow dual citizenship.

There are some exceptions to the rules that vary from country to country that do not allow dual citizenship.

More here: https://en.wikipedia.org/wiki/Multiple_citizenship





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  Reply # 1394364 25-Sep-2015 13:16
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Wow didn't know that, thanks. Assumed a first world country automatically means it allows dual citizenship.



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  Reply # 1394946 26-Sep-2015 17:29
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joker97: Assumed a first world country automatically means it allows dual citizenship.


yep germany. the ones i know intimately that studied here would never trade their citizenship to stay. plenty more countries with the same system. but we have no need for citizenship. resident vs permanent resident should be the definer imo.

ive found it ironic the skills list, jobs that there are very few of and already a flood of local talent are on the list. i think our whole immigration system is crap. too many highly skilled europeans being sent home after completing doctorates and spending a fortune on education here.

but then i think that of our education, health and social welfare systems.

it would be interesting to get those japan and dublin graphs and overlay our recent vertical spike in the last 3 years.

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  Reply # 1394982 26-Sep-2015 18:09
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Many people live here 50+ years and never become a citizen, and one reason is because it costs. Unless you need it for something like going on a local council, there is no reason for many.



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  Reply # 1395273 27-Sep-2015 16:44
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that is a very good point, along with having to vote. i mean imagine trying to vote when currently we have health, tppa, housing bubble issues with a government trying to distract us from some very serious issues with a pointless flag change. and then not having a better opposition to vote for. ;-p

its the same in oz, so many kiwis still residents, but id u didnt arrive before 2001 they could change that at any time and stop more coming and with this affordability crisis why would you want to live in auck and get paid 40% less (when the currency isnt at its peak etc)

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