Best Asia Real Estate Editor's Comments:
It appears that New Zealand is going the same route as Australia and Canada buy trying to curtail speculators buying of real estate which has driven prices through the roof recently.
"This proposal will ensure residential property speculators pay income tax on their gains and makes property speculation less attractive"
Historically whenever the government gets involved in containing real estate prices prices do drop because speculators don't want to have to deal with government regulations.
I have now turned bearish on New Zealand's major cities residential real estate. I expect a downturn of 2 to 5 years.
If you want to find out what markets in the world I am bullish on come to my seminars starting on the 28th or third of March. See details below.Click Here For a Reservation
The extension of the previous government's bright-line test aims to dampen property speculation and make homes more affordable. Picture / Jason Dorday
NZ Herald -By: Dene Mackenzie
The Government has gone too far with its attempt to dampen property speculation through an extension to the bright-line test, says Dunedin tax expert Scott Mason.
The proposed changes would have unintended consequences if the circumstances of owners changed and had overreaching characteristics, Mason said.
Revenue Minister Stuart Nash announced this week the bright-line test on residential property sales would be extended from two years to five years in legislation currently making its way through Parliament.
The extension of the previous government's bright-line test would help dampen property speculation and make homes more affordable.
The extension to five years meant profits from residential investment properties which were bought and sold within five years would be generally taxable, he said.
"This proposal will ensure residential property speculators pay income tax on their gains and makes property speculation less attractive.
"We need investment which grows the economy and creates jobs, not the sort of investment which distorts the residential housing market."
The measure would bring fairness back into the tax system, Nash said.
Current exemptions would remain, including the exemption for the main home of the owner-occupiers of the residential property.
Polson Higgs tax partner Michael Turner said it was "interesting" to read in the regulatory impact statement the new test might push up rents and house prices, despite what Labour said it was thinking of doing.
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|Bali seminar attendees January 2018|
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