Housing shortages and government actions

[Crash]

So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.

The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.

Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.

Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.

So how does this fix the housing crisis? It does not.

The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.


--
Crash McBash

[James Christophers]

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?

Thus the decades-long rewards of mediocrity and the palpably degenerate intellectual lassitude it spawns, all shrugged off in those three little weasel words:

"Yeah - nah - she'll be right."

[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

[Crash]

On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.


--
Crash McBash

[James Christophers]

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

That's what governments do to win elections. With the talents on offer from any party, what better do you expect (ref my previous post)?

Post by Crash

[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

I don't argue with any of that since I have already addressed some of the long-term causes and effects that have led to this "do something initiative in my previous post. Together, both government and nation have, with a surpassing lack of well-informed foresight b oxed themselves into a corner good and proper.

So, explain which sector of the population and/or the economy that **should really** be targeted, showing why and how.

Not as easy as it seems is it, which partly explains the intractable problem the government and the nation faces; not that New Zealand is in any way unique in this. Furthermore, I see no evidence of Collins and her mob clamouring and slavering to get their toothless gums into this dog's dinner either.

New Zealand has to easily been suckered into the delusions and consequent economic degeneration that come with cheap printed paper. It will pay the price for its blind ineptitude.

[Rich80105]

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[James Christophers]

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

They "had the answer" only in as much as they "had an as yet uninformed and therefore unformed idea how best to tackle the housing problem".

So inevitably, and hyped by the irrational exuberance that characterises governments-in-waiting, they hadn't actually worked out how to plan, fund, build and deliver on that idea. Which is why I for one am on record in this group as saying at the very outset, that Labour hadn't a hope in hell of successfully putting their housing "policy" into practice.

And this is also why I am unreceptive to all those "fretful sleepers" (Bill Pearson 1951) out there who have since woken up to the truth of it all, only then to hypocritically bang on about today's manifestation of a pernicious fact-of-the-matter that has existed for decades longer than is decent; but which successive governments, along with those bangers-on already living safely and securely under freehold title, have responded to by kicking the can down the road, muttering "Yeah, neeaahh, she'll be right" in all their smug self-righteousness.

"Pull up the ladder, I'm doing just fine."

[Crash]

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Lets look at a recent press release from Labour:

https://www.labour.org.nz/news-housing-2021-plan-faq

Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

Now look at this:

https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors

Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

--
Crash McBash

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.

"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets, leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[Crash]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

People have been drawn to Property Investment for 2 reasons:

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.

2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.

Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.

This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

--
Crash McBash

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

I was not as clear as I should have been. Ensuring that everyone has a
home, is a different issue from ensuring that every home is warm and
dry. They both came through as priorities for government at around the
same time - both were not seen as a problem by the pre-2017
government, who only accepted the housing shortage as a problem prior
to the last election

Post by Crash

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Post by Crash

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

The ''bright line"" test did not change the tax laws - just whether
the IRD were forced to make an assessment, and also the default
presumption for the result of that test.

Post by Crash

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

I suspect a greater problem is putting in infrastructure before
dwellings are started - and with water and waste problems in many of
our cities that represent maintanenace having been deferred for far
too long, resouces are having to be put to those areas. Then there are
the problems of supply for materials; while some is domestic we do not
have an efficient market - too few large suppliers; and Covid has
affected transport. One of the significant decisions that has helped
is Auckland changing some planning restrictions - while made some time
ago it is now affecting the ability of developers to build higher and
more densely - many suburbs are seeing single houses on a large
section being replaced by multiple units - this year will see a
significant rise in dwellings, and for the first time in some years a
lower average size of new builds.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[Crash]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.

Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds. The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

The ''bright line"" test did not change the tax laws - just whether
the IRD were forced to make an assessment, and also the default
presumption for the result of that test.

Post by Crash

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

I suspect a greater problem is putting in infrastructure before
dwellings are started - and with water and waste problems in many of
our cities that represent maintanenace having been deferred for far
too long, resouces are having to be put to those areas. Then there are
the problems of supply for materials; while some is domestic we do not
have an efficient market - too few large suppliers; and Covid has
affected transport. One of the significant decisions that has helped
is Auckland changing some planning restrictions - while made some time
ago it is now affecting the ability of developers to build higher and
more densely - many suburbs are seeing single houses on a large
section being replaced by multiple units - this year will see a
significant rise in dwellings, and for the first time in some years a
lower average size of new builds.

Services to new subdivisions are paid for by the developers. This
includes connection to existing infrastructure and reticulation
throughout the subdivision. The government is helping where existing
infrastructure cannot handle the increased load of a new subdivision.
My original comment about the RMA reforms was aimed at local bodies
that use the planning process to prohibit new subdivisions. This
needs to be loosened up - if someone wants to create a new subdivision
for residential housing, any prohibitions on this should be looked at
as part of the RMA review.

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

--
Crash McBash

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.

Many buildings could be used for rental accomodation, but in fact only
a small proportion are - those are owned by the rental accomodation
industry, and the provisions only apply to that industry.

Post by Crash
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds. The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

The actual number of sales is relatively low - given that all sales
are recorded it is not difficult to track when any particular property
was purchased and when it is subsequently sold.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

The ''bright line"" test did not change the tax laws - just whether
the IRD were forced to make an assessment, and also the default
presumption for the result of that test.

Post by Crash

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

I suspect a greater problem is putting in infrastructure before
dwellings are started - and with water and waste problems in many of
our cities that represent maintanenace having been deferred for far
too long, resouces are having to be put to those areas. Then there are
the problems of supply for materials; while some is domestic we do not
have an efficient market - too few large suppliers; and Covid has
affected transport. One of the significant decisions that has helped
is Auckland changing some planning restrictions - while made some time
ago it is now affecting the ability of developers to build higher and
more densely - many suburbs are seeing single houses on a large
section being replaced by multiple units - this year will see a
significant rise in dwellings, and for the first time in some years a
lower average size of new builds.

Services to new subdivisions are paid for by the developers. This
includes connection to existing infrastructure and reticulation
throughout the subdivision.

Our problems started through an increase in immigration, particularly
of low paid workers to assist employers who could not attract New
Zealanders to very low wage jobs. That was criticised at the time for
not having taken into account the need for housing for these people,
many of whom stayed and became New Zealanders. Much of our
infrastructure resources were directed towards roading, some of it
very necessary, but also some that were 'vanity' projects.

Post by Crash
The government is helping where existing
infrastructure cannot handle the increased load of a new subdivision.

We now find that existing infrastracure in some of our cities has over
many years suffered from poor maintenance and poor monitoring for
replacement at end of effective life. Urban intensification, which we
are seeing in most of our large cities, is exacerbating existing
problems, and in many cases new subdivisions are requiring upgrades to
existing systems - all of which takes time, and resources that we do
not have or that have been diverted to other projects.

Post by Crash
My original comment about the RMA reforms was aimed at local bodies
that use the planning process to prohibit new subdivisions. This
needs to be loosened up - if someone wants to create a new subdivision
for residential housing, any prohibitions on this should be looked at
as part of the RMA review.

"Should be looked at" is critical. Blind acceptance is leading us to
continuing expansion of urban sprawl over fertile farmland, leading
to produce needing to be being transported further, and workers
travelling further, but with worse transport options than previously.
It was for example appalling that the Hamilton Expressway was planned
and implemented without accompanying planning and allowance for high
speed rail connections from Auckland to Hamilton and probably on to
Rotorua. As Auckland are finding, purchasing housing to create a rail
lonk is very very expensive. We do also have Climate Change
commitments that should also be allowed for.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[Crash]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.

Many buildings could be used for rental accomodation, but in fact only
a small proportion are - those are owned by the rental accomodation
industry, and the provisions only apply to that industry.

Post by Crash
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds. The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

The actual number of sales is relatively low - given that all sales
are recorded it is not difficult to track when any particular property
was purchased and when it is subsequently sold.

Sales are not the issue. Reviewing tax returns for investors that
have a mix of residential rentals bought before and after the change,
and residential new builds bought before and after the change, produce
a nightmare of working out the validity of the interest claimed as an
expense. They can claim the interest related to the new builds, and
the existing properties bought before and after the change have
different levels of allowing interest costs as a deduction. Now
consider the fact that this investor may have multiple mortgages, all
at different interest rates and all over parts of multiple properties.
This is simply done by funding a property purchase from drawing down
further on more than one mortgage. Prior the the announced changes
his tax return was simple - all interest costs, regardless of which
mortgage they came from and regardless of which properties he owned,
were tax-deductible expenses. Now some interest is tax-deductible and
some is not. How does the IRD verify the interest cost of each
property, given that there is no direct relationship between each
mortgage the investor has and each property they own?

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

The ''bright line"" test did not change the tax laws - just whether
the IRD were forced to make an assessment, and also the default
presumption for the result of that test.

Post by Crash

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

I suspect a greater problem is putting in infrastructure before
dwellings are started - and with water and waste problems in many of
our cities that represent maintanenace having been deferred for far
too long, resouces are having to be put to those areas. Then there are
the problems of supply for materials; while some is domestic we do not
have an efficient market - too few large suppliers; and Covid has
affected transport. One of the significant decisions that has helped
is Auckland changing some planning restrictions - while made some time
ago it is now affecting the ability of developers to build higher and
more densely - many suburbs are seeing single houses on a large
section being replaced by multiple units - this year will see a
significant rise in dwellings, and for the first time in some years a
lower average size of new builds.

Services to new subdivisions are paid for by the developers. This
includes connection to existing infrastructure and reticulation
throughout the subdivision.

Our problems started through an increase in immigration, particularly
of low paid workers to assist employers who could not attract New
Zealanders to very low wage jobs. That was criticised at the time for
not having taken into account the need for housing for these people,
many of whom stayed and became New Zealanders. Much of our
infrastructure resources were directed towards roading, some of it
very necessary, but also some that were 'vanity' projects.

Post by Crash
The government is helping where existing
infrastructure cannot handle the increased load of a new subdivision.

We now find that existing infrastracure in some of our cities has over
many years suffered from poor maintenance and poor monitoring for
replacement at end of effective life. Urban intensification, which we
are seeing in most of our large cities, is exacerbating existing
problems, and in many cases new subdivisions are requiring upgrades to
existing systems - all of which takes time, and resources that we do
not have or that have been diverted to other projects.

Post by Crash
My original comment about the RMA reforms was aimed at local bodies
that use the planning process to prohibit new subdivisions. This
needs to be loosened up - if someone wants to create a new subdivision
for residential housing, any prohibitions on this should be looked at
as part of the RMA review.

"Should be looked at" is critical. Blind acceptance is leading us to
continuing expansion of urban sprawl over fertile farmland, leading
to produce needing to be being transported further, and workers
travelling further, but with worse transport options than previously.
It was for example appalling that the Hamilton Expressway was planned
and implemented without accompanying planning and allowance for high
speed rail connections from Auckland to Hamilton and probably on to
Rotorua. As Auckland are finding, purchasing housing to create a rail
lonk is very very expensive. We do also have Climate Change
commitments that should also be allowed for.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

--
Crash McBash

[James Christophers]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.

Many buildings could be used for rental accomodation, but in fact only
a small proportion are - those are owned by the rental accomodation
industry, and the provisions only apply to that industry.

Post by Crash
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds. The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

The actual number of sales is relatively low - given that all sales
are recorded it is not difficult to track when any particular property
was purchased and when it is subsequently sold.

Sales are not the issue. Reviewing tax returns for investors that
have a mix of residential rentals bought before and after the change,
and residential new builds bought before and after the change, produce
a nightmare of working out the validity of the interest claimed as an
expense. They can claim the interest related to the new builds, and
the existing properties bought before and after the change have
different levels of allowing interest costs as a deduction. Now
consider the fact that this investor may have multiple mortgages, all
at different interest rates and all over parts of multiple properties.
This is simply done by funding a property purchase from drawing down
further on more than one mortgage. Prior the the announced changes
his tax return was simple - all interest costs, regardless of which
mortgage they came from and regardless of which properties he owned,
were tax-deductible expenses. Now some interest is tax-deductible and
some is not. How does the IRD verify the interest cost of each
property, given that there is no direct relationship between each
mortgage the investor has and each property they own?

May I join you in shedding a dutiful tear for the IRD and its never-ending travails?

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.

Many buildings could be used for rental accomodation, but in fact only
a small proportion are - those are owned by the rental accomodation
industry, and the provisions only apply to that industry.

Post by Crash
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds. The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

The actual number of sales is relatively low - given that all sales
are recorded it is not difficult to track when any particular property
was purchased and when it is subsequently sold.

Sales are not the issue. Reviewing tax returns for investors that
have a mix of residential rentals bought before and after the change,
and residential new builds bought before and after the change, produce
a nightmare of working out the validity of the interest claimed as an
expense. They can claim the interest related to the new builds, and
the existing properties bought before and after the change have
different levels of allowing interest costs as a deduction. Now
consider the fact that this investor may have multiple mortgages, all
at different interest rates and all over parts of multiple properties.
This is simply done by funding a property purchase from drawing down
further on more than one mortgage. Prior the the announced changes
his tax return was simple - all interest costs, regardless of which
mortgage they came from and regardless of which properties he owned,
were tax-deductible expenses. Now some interest is tax-deductible and
some is not. How does the IRD verify the interest cost of each
property, given that there is no direct relationship between each
mortgage the investor has and each property they own?

If there is no new borrowing, then there is no change to what part of
interest can be written off. If there is new borrowing, the percentage
of interest on that borrowing will reduce over the appropriate period.
I am sure Accountants can identify the verifiable facts to the
satisfaction of the IRD. If borrowing for a new build cannot be
identified from other borrowing for existing buildings then I would
expect it to be presumed to be all in relation to existing buildings.
I suspect banks will be happy to arrange separate drawings for the
different properties where requested. Not really difficult provided
basic pronicples can be promulgated and agreed.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
https://www.stuff.co.nz/business/124629199/anger-over-government-moves-against-property-investors
Labour have been unable to specifically target property speculators,
but have targeted all who own residential rental properties. Interest
costs on business loans is a legitimate expense that all businesses
can claim as part of their tax return - except now not for those who
have debt against a rental property. No loophole has been closed -
tax deductibility has been removed for a targeted sector. There is
credible evidence that owners of rental properties will sell some of
their properties either to exit residential property or to reduce
their rental property indebtedness. So renters will be given 90-day
notices because the property will then be put up for sale unencumbered
by a tenant, so that a first-home buyer can buy it.

It has been clear for many years that laws relating to property have
led to an expensive distortion of invesmtnet markets,

1. We understand how rental housing works in far more detail than any
other form of investment. Most of us start our working or student
lives as renters, then as time goes on we become property owners.
2. Mortgage finance is easily accessible once a property owner has
significant levels of equity. Much of that equity was never earned
but came about with house price inflation.
Name any other form of investment that delivers like this. There is
none. The best that can be hoped for is that instead of investing in
residential property, investors will turn to other forms of real
estate despite not being that familiar with how it works.
This has nothing to do with laws or tax, though there have been some
tax advantages to residential property investment in the past that
were addressed by the advent of the 'bright line test' that ensured
that capital gain from houses but and sold in the short term was
deemed taxable income.

The ''bright line"" test did not change the tax laws - just whether
the IRD were forced to make an assessment, and also the default
presumption for the result of that test.

Post by Crash

Post by Rich80105
leading to an
emphasis on property investment to the detriment of business, and to
housing stock designed for those with more money than average rather
than for all New Zealanders. Of course those most advantaged by the
unsatisfactory situation will protest about losing those unfarir
advantages.

Post by Crash
We are now discovering why past governments (led by both National and
Labour) have passed on housing market regulation.

Exactly - change was always going to be hard - and we now have the
added problems of Covid - with substantial spending (largely agreed by
New Zealanders) which have affected our ability to progress other
issues, and also distrorted our financial position. One effect has
been lower interest rates. Through the time of that reduction, which
will have reduced costs for landlords significantly, rents continued
to rise. The small increase cost of the tax changes is relatively
minor compared with the previous reduction in interest rates, but the
answer is of course that every opportunity will always be takent o
increase rents . . .

Landlords can raise rents because tenants cannot find somewhere else
to move to. The answer is to increase supply to exceed demand for
residential housing. The government has started down this path but
results will be limited until RMA reforms make it easier and cheaper
to get building consents.

I suspect a greater problem is putting in infrastructure before
dwellings are started - and with water and waste problems in many of
our cities that represent maintanenace having been deferred for far
too long, resouces are having to be put to those areas. Then there are
the problems of supply for materials; while some is domestic we do not
have an efficient market - too few large suppliers; and Covid has
affected transport. One of the significant decisions that has helped
is Auckland changing some planning restrictions - while made some time
ago it is now affecting the ability of developers to build higher and
more densely - many suburbs are seeing single houses on a large
section being replaced by multiple units - this year will see a
significant rise in dwellings, and for the first time in some years a
lower average size of new builds.

Services to new subdivisions are paid for by the developers. This
includes connection to existing infrastructure and reticulation
throughout the subdivision.

Our problems started through an increase in immigration, particularly
of low paid workers to assist employers who could not attract New
Zealanders to very low wage jobs. That was criticised at the time for
not having taken into account the need for housing for these people,
many of whom stayed and became New Zealanders. Much of our
infrastructure resources were directed towards roading, some of it
very necessary, but also some that were 'vanity' projects.

Post by Crash
The government is helping where existing
infrastructure cannot handle the increased load of a new subdivision.

We now find that existing infrastracure in some of our cities has over
many years suffered from poor maintenance and poor monitoring for
replacement at end of effective life. Urban intensification, which we
are seeing in most of our large cities, is exacerbating existing
problems, and in many cases new subdivisions are requiring upgrades to
existing systems - all of which takes time, and resources that we do
not have or that have been diverted to other projects.

Post by Crash
My original comment about the RMA reforms was aimed at local bodies
that use the planning process to prohibit new subdivisions. This
needs to be loosened up - if someone wants to create a new subdivision
for residential housing, any prohibitions on this should be looked at
as part of the RMA review.

"Should be looked at" is critical. Blind acceptance is leading us to
continuing expansion of urban sprawl over fertile farmland, leading
to produce needing to be being transported further, and workers
travelling further, but with worse transport options than previously.
It was for example appalling that the Hamilton Expressway was planned
and implemented without accompanying planning and allowance for high
speed rail connections from Auckland to Hamilton and probably on to
Rotorua. As Auckland are finding, purchasing housing to create a rail
lonk is very very expensive. We do also have Climate Change
commitments that should also be allowed for.

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by James Christophers
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

In targeting property investors by disallowing what is otherwise a
legitimate business expense, the current government shrieks that they
are desperate to 'do something' that is as poorly targeted as it is
thought through.

[James Christophers]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.

This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.

Time to get real and yank this degenerate rort out from under the carpet once and for all.

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

[Crash]

On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.

I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.

To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.

This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.


--
Crash McBash

[Rich80105]

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.

Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

[Crash]

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.


--
Crash McBash

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.

OK, so you couldn't identify any of those regulations that was in any
way equivalent to recent government decisions.

[Crash]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.

OK, so you couldn't identify any of those regulations that was in any
way equivalent to recent government decisions.

You expose your inability to comprehend precisely what I said. I
identified one of the current measures taken against owners of rental
residential property was 'Muldoonist', and that that this is an
indicator that the government is prepared to use Muldoonist
interventions (Google RD Muldoon if you don't understand this
concept). If you do not understand which of the current measures is
'Muldoonist', I have suggested a way to address this. If you are not
capable or willing to do this, you cannot credibly post a rebuttal of
my viewpoint.


--
Crash McBash

[Rich80105]

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.

OK, so you couldn't identify any of those regulations that was in any
way equivalent to recent government decisions.

You expose your inability to comprehend precisely what I said. I
identified one of the current measures taken against owners of rental
residential property was 'Muldoonist', and that that this is an
indicator that the government is prepared to use Muldoonist
interventions (Google RD Muldoon if you don't understand this
concept). If you do not understand which of the current measures is
'Muldoonist', I have suggested a way to address this. If you are not
capable or willing to do this, you cannot credibly post a rebuttal of
my viewpoint.

I merely asked a question. "So just what were those Muldoonist levels
of regulation and control of the housing market that you fear may be
upon us, Crash?"

You have not identified any decision of the current government that
represent "Muldoonist levels of regulation and control" or been able
to give an example of a similar regulation from Muldoon times. I was
not seeking to rebut your viewpoint, but to identify just what that
viewpoint was and what it is based on. You have been unable to assist
- that is OK. You also said "Other crude interventions may well
be on the way." You claim that can be understood by a google search,
but I find that identifies the most obvious as being a general wage
and price freeze or foreign currency controls; I would be interested
in your evidence that such actions ar any more likely from the current
government than any government since Muldoon was PM!

[John Bowes]

On Tuesday, March 30, 2021 at 9:54:55 AM UTC+13, Rich80105 wrote:
<typical garbage in defence of his glorious leader snipped>

Give up Crash! Rich is incapable of comprehending anything not written by Carl Marx, Lenin or their accolyt Ardern......

[Crash]

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.

OK, so you couldn't identify any of those regulations that was in any
way equivalent to recent government decisions.

You expose your inability to comprehend precisely what I said. I
identified one of the current measures taken against owners of rental
residential property was 'Muldoonist', and that that this is an
indicator that the government is prepared to use Muldoonist
interventions (Google RD Muldoon if you don't understand this
concept). If you do not understand which of the current measures is
'Muldoonist', I have suggested a way to address this. If you are not
capable or willing to do this, you cannot credibly post a rebuttal of
my viewpoint.

I merely asked a question. "So just what were those Muldoonist levels
of regulation and control of the housing market that you fear may be
upon us, Crash?"
You have not identified any decision of the current government that
represent "Muldoonist levels of regulation and control"

OK I will spell it out: The Government is not allowing owners of
residential rental properties the ability to include interest costs as
a deductible expense when calculating taxable income. Every other
commercial enterprise has and continues to be allowed to do so, and
this includes new residential rental-housing builds along with all
other forms of real-estate investment.

Post by Rich80105
or been able
to give an example of a similar regulation from Muldoon times.

This article by Steven Joyce covers a wider range of viewpoints but
scroll down to the photo of Sir Robert Muldoon for this context. I
realise that you will most likely reject Joyce's opinions because of
your obsession with supporting the Labour Party, but non-the-less this
is my cite in support of a Muldoon-like trend in the recent
announcements on residential real-estate investment.

Post by Rich80105
I was
not seeking to rebut your viewpoint, but to identify just what that
viewpoint was and what it is based on. You have been unable to assist
- that is OK. You also said "Other crude interventions may well
be on the way." You claim that can be understood by a google search,
but I find that identifies the most obvious as being a general wage
and price freeze or foreign currency controls; I would be interested
in your evidence that such actions ar any more likely from the current
government than any government since Muldoon was PM!

--
Crash McBash

[James Christophers]

Post by Rich80105

Post by Rich80105

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties. Do you expect anyone to weep for the
dire plight you find yourself in, Crash?

Who said I was in any level of dire need? I was merely pointing out
why so many people find investment in rental real-estate to be so
attractive. In your response you have attacked me rather than the
reason rental real-estate is such a popular form of investment.

Post by Rich80105

Post by Crash

Post by James Christophers

Post by Crash
The properties they
own today have a phase-in period (4 years?) for the removal of
interest as a deductible expense, the existing properties they buy
from now on have no interest deductibility but the new builds they buy
today do. I am glad I am not involved in testing the new software the
IRD will need to get this right.

Since it is Kiwi ingenuity that devises the software critical to Team Emirates' consistent successes, then what reason can there possibly be for that same Kiwi ingenuity not to be applied with the same skill and diligence to the IRD's bean-counting - and with equal success?

Read my words again and comprehend the meaning of 'testing'. I
predict that residential property investors tax returns will be so
complex when it comes to validating the interest deductions claimed
that this software will require extremely complex testing routines to
find the bugs. Interest will need to be calculated per property (new
builds can be claimed at 100% claimable, properties owned today come
into effect over a 4 year transition from 100% to 0% claimable, and
properties purchased after today that are not new-builds are 0%
claimable). As of today investors in residential real-estate include
interest as a single amount for tax deductibility because there is no
need to be any more specific.
This is going to be hard. There is a high level of risk that we are
headed towards Muldoonist levels of regulation and control of the
housing market.

So just what were those Muldoonist levels of regulation and control of
the housing market that you fear may be upon us, Crash?

We have already seen one of them. Other crude interventions may well
be on the way. If you don't know what I am referring to then Google
'RD Muldoon' - the result is a good cross-section of articles.

OK, so you couldn't identify any of those regulations that was in any
way equivalent to recent government decisions.

You expose your inability to comprehend precisely what I said. I
identified one of the current measures taken against owners of rental
residential property was 'Muldoonist', and that that this is an
indicator that the government is prepared to use Muldoonist
interventions (Google RD Muldoon if you don't understand this
concept). If you do not understand which of the current measures is
'Muldoonist', I have suggested a way to address this. If you are not
capable or willing to do this, you cannot credibly post a rebuttal of
my viewpoint.

I merely asked a question. "So just what were those Muldoonist levels
of regulation and control of the housing market that you fear may be
upon us, Crash?"
You have not identified any decision of the current government that
represent "Muldoonist levels of regulation and control"

OK I will spell it out: The Government is not allowing owners of
residential rental properties the ability to include interest costs as
a deductible expense when calculating taxable income. Every other
commercial enterprise has and continues to be allowed to do so, and
this includes new residential rental-housing builds along with all
other forms of real-estate investment.

Interest costs have reduced enormously. Time, surely, for the rentier class to now "give a little", perhaps if only to give "The unacceptable face of Capitalism" [**Tory** PM, Edward Heath] a better look?

You are questioning the "appropriateness" of the government's new tax-law initiative?

Until now, when did tax law - with its cynically contrived and built-in loop-holes and exceptions - ever once reflect, let alone uphold and enhance, New Zealand's hitherto dearly-held notion of a fair and equitable society?

Even up against those twin degenerates, Greed and Corruption, democracy has always done, and still does, its level best to represent and enact the fair and the equitable as its core thesis and ethos.

However, the inconvenient truth for a few is that lurking within that same ideal is New Zealand's predatory rentier class that, in all its conspiratorial exclusivity and rank humbug, legislates, enacts and imposes taxes.

So how does this sit with you, Crash? Or for that matter, with that upright, Knight-of-the -Realm and pillar of Trans-Tasman society, yer 83 year-old sex-fiend and convict, Sir (ya can't make it up!) Ron Brierly?

Post by Rich80105
or been able
to give an example of a similar regulation from Muldoon times.

This article by Steven Joyce covers a wider range of viewpoints but
scroll down to the photo of Sir Robert Muldoon for this context. I
realise that you will most likely reject Joyce's opinions because of
your obsession with supporting the Labour Party, but non-the-less this
is my cite in support of a Muldoon-like trend in the recent
announcements on residential real-estate investment.

Post by Rich80105
I was
not seeking to rebut your viewpoint, but to identify just what that
viewpoint was and what it is based on. You have been unable to assist
- that is OK. You also said "Other crude interventions may well
be on the way." You claim that can be understood by a google search,
but I find that identifies the most obvious as being a general wage
and price freeze or foreign currency controls; I would be interested
in your evidence that such actions ar any more likely from the current
government than any government since Muldoon was PM!

--
Crash McBash

[Gordon]

[Snip]

Post by Crash

Post by Rich80105
I merely asked a question. "So just what were those Muldoonist levels
of regulation and control of the housing market that you fear may be
upon us, Crash?"
You have not identified any decision of the current government that
represent "Muldoonist levels of regulation and control"

The situation was the other side of the coin. It was inflation and interest
rates, way above the 11% freeze which Sir Robert forced upon the country. There
was a feeling that people, Joe Average might have to sell as they could not
afford the payments. Not good for votes.

Muldoon was also on the other side of the House.

Post by Crash
OK I will spell it out: The Government is not allowing owners of
residential rental properties the ability to include interest costs as
a deductible expense when calculating taxable income. Every other
commercial enterprise has and continues to be allowed to do so, and
this includes new residential rental-housing builds along with all
other forms of real-estate investment.

This is the main point, it is inconsistant and Market Forces are not allowed
to Govern. Of course they never are if things get abit near to self
correction. The Government steps in and does it best to flatten another
type of curve.

Still this will be all forgotten by the public when the next crisis arrives.

Post by Crash

Post by Rich80105
or been able
to give an example of a similar regulation from Muldoon times.

This article by Steven Joyce covers a wider range of viewpoints but
scroll down to the photo of Sir Robert Muldoon for this context. I
realise that you will most likely reject Joyce's opinions because of
your obsession with supporting the Labour Party, but non-the-less this
is my cite in support of a Muldoon-like trend in the recent
announcements on residential real-estate investment.

Post by Rich80105
I was
not seeking to rebut your viewpoint, but to identify just what that
viewpoint was and what it is based on. You have been unable to assist
- that is OK. You also said "Other crude interventions may well
be on the way." You claim that can be understood by a google search,
but I find that identifies the most obvious as being a general wage
and price freeze or foreign currency controls; I would be interested
in your evidence that such actions ar any more likely from the current
government than any government since Muldoon was PM!

--
Crash McBash

[Gordon]

Post by Rich80105

Post by Crash
On Sun, 28 Mar 2021 14:36:07 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash

Post by Rich80105

Post by Crash
On Fri, 26 Mar 2021 22:35:51 -0700 (PDT), James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."

Previous governments ignored the problem or did nothing. This
government made the claim that they had the answer.

They said they regarded it as a problem and would do some things about
it, but I don;t recall any claim that they ""had the answer"" - can
you provide a cite?

Are you seriously suggesting a political party will acknowledge a
problem but not have the answer? Labour have acknowledged the problem
in their 2020 manifesto: https://www.labour.org.nz/policy. Click on
this link then click through to the manifesto - housing is covered on
page 13. The headline is "Ensuring every New Zealander has a warm dry
home".

Acknowledgement that there even was a problem was a significant
difference between the major political parties, and of course neither
of those parties, or the smaller ones, had "the answer" - to expect a
single answer to such a complex problem is to not understand the
nature of the problem.
"Ensuring every New Zealander has a warm dry home" is in part a
different issue - but the resolution of that issue has an impact on
both landlords and tenants, and on the difficulties of any
one-dimensional view of the housing problems. Of course there are
conflicts - real change will require changes in investor and tenant
expectations, but as a country it is not unreasonable for us to
tolerate some of the conditions inwhich years of worsening housing
supply have led some families and individuals.

"ensuring every new Zealander has a warm dry home" is clearly a
reference to the housing market - it cannot be anything else. For
those who don't have a 'warm dry home' one has to be found or built.

Post by Rich80105

Post by Crash
https://www.labour.org.nz/news-housing-2021-plan-faq
Click on 'What's Labour doing to tackle the housing crisis?. Under
'Helping to tip the balance in favour of first home buyers' they
describe the removal of a 'loophole' that allowed property speculators
to claim interest costs on business debt as a deductible business
expense.

And indeed it was ''helpng to tip the balance'' - anyone reading that
woud know that sucess depends on reasonable actions from others, and
other actions over time.

Is it reasonable to specifically target residential property investors
by disallowing the cost of interest as a part of calculating taxable
income, where every other commercial enterprise is permitted to do so?

Yes - we have different regulations for different sectors. We do not
apply banking regulations to other companies for example.

Banking regulations are industry-specific (apply to all banks).
Residential property investors who buy an existing home are being
targeted by removing the ability to claim interest as a deductible
business expense. Residential property investors who invest in new
builds, along with all other forms of commercial enterprise continue
to be able to claim interest as a deductible business expense. This
limitation on claiming interest as deductible business expense is
therefore not equivalent to industry-specific regulation. It targets
owners of a specific asset class.
Good luck to the IRD trying to figure out the tax return of a property
investor who owns existing residential rental properties, and then
buys more existing and new residential builds.

For the IRD, a condition and a challenge that only arises in the first place through what amounts to a singular economic anomaly, this based solely on speculative, **unearned, un-taxed** income - a rampant, zero-productivity, **wealth-extracting** luxury for the very few that you and I know the vast majority of New Zealanders can no longer afford to underwrite; this if only for the increasingly widespread social disenfranchising and dislocation you and I can no longer afford to ignore.
This mare's nest is no longer about what is legal, Crash; it's about what is just, a consideration more often than not derided and dismissed when there's a fast buck in it for the selfish and unfettered ratchet-up rentier.
Time to get real and yank this degenerate rort out from under the carpet once and for all.

Time to debunk some of these often-repeated misconceptions. Investment
in residential property is not solely speculative, nor are the profits
from it solely unearned and untaxed. I invested for a long-term
return and paid taxes on profits year-on-year though these were low.
I did benefit from capital gain and this was not taxed because of the
20-year window in which I invested. I earned an income slightly
higher than the national median, so affordable to the vast majority of
the many in my position.
I invested in residential real-estate because I new exactly how it
worked. I knew the value of properties at the time and could do the
sums on likely rental income, property maintenance costs and what
return on investment I would likely get over 20 years. The returns
were higher than projected because residential housing value rose more
than I expected. There is no other form of investment that matches
this - if you believe there is then name it. Sharemarket? Start a
new business? Kiwisaver? Funds investment? Endowment Insurance? All
you can do is put your money in and hope for the best.
To divert investment away from residential real-estate will therefore
require this form of investment to be deliberately devalued (we have
started down this track now) and/or simply made illegal.

Yet you happily accept that those who do not have your ability to
invest sufficient to get into property, and instead invest in
Kiwisaver, will have capital gains derived from investment in any type
of asset subject to tax on those capital gains regardless of the
length of investment. And those investing in shares will also
beliable to tax on trading gains. Such a distortion of our investment
markets has starved companies of share capital (leading many to seek
fund offshore and eventually being sole overseas), and supported
increased inequality in our country.
Landlords that needed borrowing have had an increase in profits due to
reduced interest rates that is far larger than the effect of not
getting a deduction for the low amounts of interest now being charged
- and by all accounts rents were not increased in that period, but
instead increased to gain a desired return on the (unreasised) higher
market values of the properties.

Ah missed that one. Interest rates will rise and *all* the costs will be
borne by the landord so rents will go up on this alone.

Then we can add the Water Authority affect on the cost of water. Double to 3
times is the estimate. Still this might be passed off to the tennants to pay
directly.

[Gordon]

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will?

Let us start with

1) Cut immigration, reduce pressure on housing numbers.
2) Take out the insentive for housing to be an easy investment
3) Build more houses, lots more
4) Realise that this is an ongoing issue, not a Lets try this! when things
get out of control.

Number 4 is about the only thing that will happen.

[James Christophers]

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

Now on a different but related tack, here's a rental property in Bristol UK, a modern up-and-coming city directly connecting with the rest of the UK by rail and motorway, with a population numbering roughly that of Wellington. I randomly clicked on Bristol/Zoopla and it came up with this at the very first go:

https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98

That done, I then clicked on this URL which gives the average salary of people working and living in the Bristol area:

https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98

Q1: Granted, it's difficult to compare like with like between countries, how do salaries and rents correlate in Wellington compared to those in Bristol? (£1.00 = NZ$2.00)

Q2: And how about the comparative quality of accommodation (perceived in the case of Bristol)? As rentals go, the Zoopla job looks pretty flash to me.

Note: The flat is in Pembroke Road, one of Bristol's most expensive residential roads. IOW, the flat can be counted a "des res".

(From a one-off random search): The University of Bristol has ranked within the top 60 universities in the world and ninth best in the UK, according to the QS World Rankings. As of August 2017, there were 106 universities in England.

[Rich80105]

On Mon, 29 Mar 2021 17:07:13 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98
https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98
Q1: Granted, it's difficult to compare like with like between countries, how do salaries and rents correlate in Wellington compared to those in Bristol? (£1.00 = NZ$2.00)
Q2: And how about the comparative quality of accommodation (perceived in the case of Bristol)? As rentals go, the Zoopla job looks pretty flash to me.
Note: The flat is in Pembroke Road, one of Bristol's most expensive residential roads. IOW, the flat can be counted a "des res".
(From a one-off random search): The University of Bristol has ranked within the top 60 universities in the world and ninth best in the UK, according to the QS World Rankings. As of August 2017, there were 106 universities in England.

The second url should not be the same as the first.

[James Christophers]

Post by Rich80105
On Mon, 29 Mar 2021 17:07:13 -0700 (PDT), James Christophers

Post by James Christophers

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.

That said, what will? And after at least 30 years of successive half-pie, no-clear-plan governments knowingly ostriching over a growing multi-faceted problem, why should this particular government now be expected to have all the answers?[1] As for New Zealand's "government - skulking? - in waiting", would you, or anyone else for that matter, even give 'em the time of day?
"Yeah - nah - she'll be right."
[1] No different from its predecessors, the current government is comprised of those who have earlier been influenced by the sub-standard norms and mores of every government that has preceded them over the past 50 years. Groundhog day, perpetually licensed in full by an electorate that, similalrly conditioned, wishes it would all go away, but that then also demands as of right that a quart of milk be drawn from a pint bottle.

Post by Crash
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

And it can boggle as much and for as long as it cares to in the cases you refer to; the significant difference being that the humanitarian right to a roof over one's head is rightfully based on the universal instinctual - primal - need to survive. This is why the policies and actions of every government include, first and foremost, its prime mandate to defend both the state and its people from harm.

https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98
https://www.zoopla.co.uk/to-rent/details/58126853/?search_identifier=9e84285053c6ad264bc1e0ebfbf89f98
Q1: Granted, it's difficult to compare like with like between countries, but how do salaries and rents correlate in Wellington compared to those in Bristol? (£1.00 = NZ$2.00)
Q2: And how about the comparative quality of accommodation (perceived in the case of Bristol)? As rentals go, the Zoopla job looks pretty flash to me.
Note: The flat is in Pembroke Road, one of Bristol's most expensive residential roads. IOW, the flat can be counted as "des res".
(From a one-off random search): The University of Bristol has ranked within the top 60 universities in the world and ninth best in the UK, according to the QS World Rankings. As of August 2017, there were 106 universities in England.

The second url should not be the same as the first.

Oooops!

https://www.payscale.com/research/UK/Location=Bristol-England%3A-Bristol/Salary

[Gordon]

Post by Crash
So we finally have an attempt to re-direct how the housing market
works, however Labour have simply taken measures that are not much
better than previous governments.
The popularity of investment in housing simply cannot be countered by
any other form of investment. All of us understand in far more detail
how this investment works and anyone who has significant equity in the
primary residence has the ability to borrow to by another house. The
opportunity to use this significant equity to invest in any other
direction is far more risky and therefore far more limited borrowing
power to invest. There are a lot of other investment options - funds,
shares, starting a new business etc. but buying another house involves
much less risk and making that investment work is far more easily
understood by the investor/owner.
Recent initiatives by the Government to skew the housing market away
from investors to owner/occupiers is a clear admission that Labour
have no clear plan to address the distortion in housing costs that has
continued over the last 30 years or so. It is of particular concern
to me that Labour have decided that interest costs, which are a
legitimate cost for businesses that have debt, cannot be included as
an expense when calculating taxable profits where the business owns
residential rental housing. In all other circumstances, interest
costs are an allowable expense.
Some property investors will inevitably sell down some of their
properties to clear debt. This will mean renters tossed out in favour
of the new owner/occupier. Other Landlords will simply increase the
rent to cover the loss of interest as a deductible expense. The
inevitable result is that renters lose one way or another.
So how does this fix the housing crisis? It does not.
The risks here are precedent. Will other forms of investment be
deemed worthy of the same deterrent in the future? For example, will
fossil-fuel investors or those investing in brothels etc be similarly
targeted by not allowing them to claim interest as an allowable
expense? The mind boggles.

This has been pointed out by Judith Collins, from about hour 1.

I have had discussions/debates that being a landlord is a business, the fact
that it is entangled with the Housing Crisis is not relevant from the tax
side of things. But no it is these greedy landlords using the market to
their full advanatage which means that they must be punished finanically. No
matter that they are providing rental accomadation which is needed.

Hosung is different from other forma of business in that in other
businesses the asset devalues. Houses do not.

So the trucking firm has trucks which depreciate and they need replacing
which requires capital, which she can burrow against the credit rating of
the company. In the housing situation the capital is in the houses owned so
one can buy another house. This is the issue.

So make it for all investment properties the equity in them is say at least
70%. Or the value of the property remains at the value of the purchase price
for say 10 years. Longer if needed.

Stop trying to use tax to control the market.

Anyhow, the really concerning point is one of the PM refering to this tax
deuction as a "loophole". It is not and if the Government country starts
thinking this way we will end up with other "loop holes".

[George Black]

Post by Gordon
This has been pointed out by Judith Collins, from about hour 1.
I have had discussions/debates that being a landlord is a business, the fact
that it is entangled with the Housing Crisis is not relevant from the tax
side of things. But no it is these greedy landlords using the market to
their full advanatage which means that they must be punished finanically. No
matter that they are providing rental accomadation which is needed.
Hosung is different from other forma of business in that in other
businesses the asset devalues. Houses do not.
So the trucking firm has trucks which depreciate and they need replacing
which requires capital, which she can burrow against the credit rating of
the company. In the housing situation the capital is in the houses owned so
one can buy another house. This is the issue.
So make it for all investment properties the equity in them is say at least
70%. Or the value of the property remains at the value of the purchase price
for say 10 years. Longer if needed.
Stop trying to use tax to control the market.
Anyhow, the really concerning point is one of the PM refering to this tax
deuction as a "loophole". It is not and if the Government country starts
thinking this way we will end up with other "loop holes".

Currently the 'housing' problem is that there are insufficient building
supplies to supply every chippie out there.
And those who plan these things didn't include the need for real
products to produce their dreams.....