Luxon ?

[neels]

LOL there is as much likelyhood of that happening as the tax breaks to landlords that The Thumb is going to dish out trickling down to cheaper rents for tenants.

The past few years have made sure that's not going to happen, it's already at the point where it's cheaper to rent a house than own it with a 80% mortgage, as more rentals come off low interest rates and the week to week interest cost increases rents aren't going to come down. What will probably happen is that more landlords will get sick of tipping money in and sell off to first home buyers, further reducing the availability of rentals.

I'm not sure when it became normalised to refer to interest deductibility as a 'tax break' for landlords, when it's the same as any other business that borrows money and interest cost is considered an expense.

Some might say that the legislation that makes all these shiny arsed fuckwits buying SUVs the LOGICAL choice is the problem. As a business owner I could go out and buy a Ranger doublecab 4 x 4 as a work vehicle and get the GST back, no FBT and the business pays the running costs.

That's the bit that seems to have been missed that a large proportion of these vehicles are business owned, so it's a few more tax deductible dollars the business fronts up to buy it, but the current tax structure still makes it a better proposition as an ongoing business expense.

So, clearly that is the problem. Its very easily solved, too: either build all these levies into the cost of fuel, or registration. Make it economically viable for people, particularly people in towns to drive sensible fucking cars..

Wasn't it proposed to remove the tax from petrol, and charge RUC for all vehicles? At the moment there's an incentive to reduce the number of litres you pour in as that's the tax multiplier, if the tax is on mileage you'll get the stupid situation that exists for small diesels where the RUC cost far outweighs the gains from spectacularly good fuel economy.

[pete376403]

The past few years have made sure that's not going to happen, it's already at the point where it's cheaper to rent a house than own it with a 80% mortgage, as more rentals come off low interest rates and the week to week interest cost increases rents aren't going to come down. What will probably happen is that more landlords will get sick of tipping money in and sell off to first home buyers, further reducing the availability of rentals..

Isn't this a zero-sum game, though? Every rental that is sold to a first home buyer means there is one less previous-renter requiring rental accomodation. (not completely zero-sum, though. The banks win every time)

[nerrrd]

I'm not sure when it became normalised to refer to interest deductibility as a 'tax break' for landlords, when it's the same as any other business that borrows money and interest cost is considered an expense.

Investment properties aren’t businesses though, are they? Otherwise they’d need to be commercially viable to get financed in the first place (owners always point out that the running costs make them pretty unnattractive as businesses).

It’s all based on leveraging other assets to get in there and reaping the eventual capital gain, innit?

[neels]

Isn't this a zero-sum game, though? Every rental that is sold to a first home buyer means there is one less previous-renter requiring rental accomodation. (not completely zero-sum, though. The banks win every time)

That would be true if enough houses were being built for the new entrants into the market to buy, but they're not, so a first home buyer moving out of home into an ex rental is taking a house out of the rental market.

Investment properties aren’t businesses though, are they? Otherwise they’d need to be commercially viable to get financed in the first place (owners always point out that the running costs make them pretty unnattractive as businesses).

It’s all based on leveraging other assets to get in there and reaping the eventual capital gain, innit?

That's certainly the perception that's being promoted.

[R650R]

The left wanted GST taken off food to make it cheaper.

Just imagine if you reduced taxes on landlords and construction so housing was cheaper????
It’s the crippling envy of the left that seeks to take as much as they can from anyone remotely successful to perpetuate an environment of poverty to create voters for their cause.

[pritch]

Just imagine if you reduced taxes on landlords and construction so housing was cheaper????

Your faith in human nature is as noble as it is misplaced. You seriously think a tax cut to landlords would result in cheaper rents?

Luxon says he'll do this, so we'll get a chance to see how that works out in the real world.

[george formby]

Your faith in human nature is as noble as it is misplaced. You seriously think a tax cut to landlords would result in cheaper rents?

Luxon says he'll do this, so we'll get a chance to see how that works out in the real world.

Just more coin filtering up, never filters down under blue rule.

[F5 Dave]

Just like he faltered when asked if he would reduce his own charged rent on his properties.

Europe is currently in a construction price explosion. This isn't somehow a local phenomenon.

[george formby]

Just like he faltered when asked if he would reduce his own charged rent on his properties.

Europe is currently in a construction price explosion. This isn't somehow a local phenomenon.

So true, pretty much everywhere is under the pump and despite what people think and the tidbits the media put out, NZ is not doing too bad.

That has been hugely overlooked of late.

[neels]

Just imagine if you reduced taxes on landlords and construction so housing was cheaper????

Never mind the tax for landlords, how about just making it cheaper to build an house, and make them meet the market by increasing supply of houses.

At the moment we have a situation where government want to build social housing for people to rent, and leave owner occupier development entirely to the private sector.

In the 60s & 70s when there was a housing shortage, councils and government developed land and balloted to eligible buyers at cost to develop, and left them to decide which company would build their house.

It would be interesting to see what would happen to costs if there was genuine competition between house builders, rather than the fixed price house and land package nonsense that we currently have, or stupid covenants that only allow people to use the housing companies selected by the developers.

Can't see it happening though, there's far too much money being made by everyone in the housing food chain.

[pete376403]

While competition between builders might make a small difference, how about genuine competition between the big material suppliers - CHH, Fletchers, and so on. I've read that a house load of building materials can be imported from USA cheaper than supplied here e .g 8 foot length 2 x 4 framing - #US3.66, equivalent from Bunnings 50 x 100 x 2.4 no1 framing $NZ21.43

[HenryDorsetCase]

While competition between builders might make a small difference, how about genuine competition between the big material suppliers - CHH, Fletchers, and so on. I've read that a house load of building materials can be imported from USA cheaper than supplied here e .g 8 foot length 2 x 4 framing - #US3.66, equivalent from Bunnings 50 x 100 x 2.4 no1 framing $NZ21.43

my brother is a joiner and at one point he was bringing container loads of board in direct. He is now big enough that he gets a price he can live with.

But not only price. There are a lot of technologies that we dont get. Window joinery systems particularly. Hell, we're only just starting to see uPVC windows.....

[Jantar]

Isn't this a zero-sum game, though? Every rental that is sold to a first home buyer means there is one less previous-renter requiring rental accomodation. (not completely zero-sum, though. The banks win every time)

Most first home buyers are young couples who are looking to start a family, or already have only one or two children. Most rentals have at least 5 or 6 people living in them.

So converting a rental to a first home leaves 2 or 3 people homeless.

[R650R]

Fluff news worried about the “important” stuff as per usual…

https://i.stuff.co.nz/national/polit...ection-success

Wonder if electoral commission breaks down who voted what by gender?

Never mind that two of Nats best MPs most likely to roll Luxon are women and even ACTs Brooke is likely to taker over from Seymour in longer term.

[nerrrd]

The whole 'mum and dad property investors becoming the main suppliers of rental accommodation idea' was probably a good one in the beginning.

Whenever the supply not meeting demand question is discussed, however, nobody ever mentions the demand from investors distorting the equation. We all want property prices to rise over time, but some investors want those rises to happen as quickly as possible, especially the ones with big portfolios who can apparently make a lot of money just by selling houses to each other (with the banks happily fuelling that speculation).

I'd say it's those investors who've gotten us to this stage now, driving prices up to the point where mum and dad landlords can barely afford the running costs and renters can barely afford the rent (and often need government subsidies to do so).

Meanwhile councils will say they can't lower the cost of consents because of infrastructure deficits, and builders will say they can't lower their costs because of industry challenges, so the supply stays constrained (which suits the larger investors as well).

Maybe a capital gains tax isn't such a bad idea in that context.