Housing and First Home Buyer in NZ
My personal opinion is that the Government is just trying to evade the issue and in Spencer’s own words– “Investors are often setting the marginal market prices that are then applied to the full housing stock within a regional market. Indicators point to an increasing presence of investors in the Auckland market and this trend is no doubt being reinforced by the expectation of high rates of return based on untaxed capital gains,”
The Government is not at all really interested in tackling the high house price inflation as their preference is for favouring the house investors rather than help the first home buyer. The government should heed the advice of RBNZ by treating investors in houses as a separate group. There is no clear cut enforcement of the capital gains laws for these investors and they pay nothing by way of taxes on their gains. Why should salary earners and other business people pay their taxes on every penny earned and these profiteers go scott free? Also ring fencing of losses and gains is a proposition that should be actively considered if the government is really interested in tackling the issue.
The National Governments initiatives of kiwisaver incentives is not going to go anywhere in stemming the house inflation rates and I would suggest that they try and tackle the cause rather than the effect of the whole issue.
Capital Gains on trading of houses is a must. Exemption to the house used for residence is a consideration to exclude the real owner from harsh taxation. Ring fencing of losses should come into force immediately.
See Andrew Little’s response to he Governments recent measures (18/05/2015)