New house and section packages start around $700,000 in Tauranga. Therefore the Govt gets at least $105,000 GST per new home. TCC says we have a 4 billion dollar fiscal hole (over next 10 years) for infrastructure and can't afford more new subdivisions or the roading network to cope with current population, let alone growth.

I'm sure this is common throughout NZ. How much is the Govt taking without sharing the costs in return? What's the answer? I think the problem will worsen next year as we see even higher immigration numbers.

I think the Govt needs to put this money into large scale builds like they did in the 50's. Just get on with it and build 100,000 3 bedroom, 1 bathroom, 1 living room boxes throughout NZ. Gotta be better than living in a motel right? And yet again the taxpayer is paying for this at around $500 a week per family. The Govt can then set families up in their own homes with Govt loans too.... It's actually all been done before, why's it so hard now?

Edited by carstauranga001 at 2:57 pm, Wed 9 Dec

carstauranga001 - 2020-12-09 14:55:00

Wasnt this a try but fail with kiwibuild ? Govt lucky to get $105000 on a 700k sale try 20-30 k .
Immigrantions a bigger mess than housing my partner has been in nz 7 years on tourist visa we are coming upto 3rd nz born child a phone call to NZI yesterday a decision on resident visa not until 2022 .
They only thing that will fix issues is a full meltdown and Reset .

kata001 - 2020-12-09 17:15:00

kata001 wrote:

Wasnt this a try but fail with kiwibuild ? Govt lucky to get $105000 on a 700k sale try 20-30 k .
Immigrantions a bigger mess than housing my partner has been in nz 7 years on tourist visa we are coming upto 3rd nz born child a phone call to NZI yesterday a decision on resident visa not until 2022 .
They only thing that will fix issues is a full meltdown and Reset .

How do you get 30K? 15% of 700 was 105 when I went to school. All new builds are on new sections that first time round the developers paid GST on the sale price. All materials to build a house along with the labour also attract GST. Then there's GST on the margin the seller makes... The entire house build is a commercial entity (broken into many parts) and thus attracts GST albeit paid in many smaller portions.. Next time sold as residential property GST doesn't apply.

carstauranga001 - 2020-12-09 17:26:00

carstauranga001 wrote:

How do you get 30K? 15% of 700 was 105 when I went to school. All new builds are on new sections that first time round the developers paid GST on the sale price. All materials to build a house along with the labour also attract GST. Then there's GST on the margin the seller makes... The entire house build is a commercial entity (broken into many parts) and thus attracts GST albeit paid in many smaller portions.. Next time sold as residential property GST doesn't apply.

Because a builder doesn't make 100% profit on 700k has costs and has claimed GST thoughout project .
Try GST on 100k .

Edited by kata001 at 5:35 pm, Wed 9 Dec

kata001 - 2020-12-09 17:34:00

kata001 wrote:

Because a builder doesn't make 100% profit on 700k has costs and has claimed GST thoughout project .
Try GST on 100k .

The buyer pays GST on the full price. While the builder may pay lees, the balance goes to the Govt via the other inputs. In GST, the govt ends up with GST on the full retail cost to the buyer.

tony9 - 2020-12-09 17:48:00

It would be nice to see a cost/benefit analysis of paying motels vs paying market rate done by the govt before they continue this practice into 2021. They could be housing people in 2yr-5yr tenancies for what they are paying for a shorter duration, not to mention all the bureaucracy in processing grants weekly.

Large scale builds are the way to go + cutting of some costs eg double glazing which seems almost offensive when people are sleeping in cars.

sweetgurl108 - 2020-12-09 18:22:00

tony9 wrote:

The buyer pays GST on the full price. While the builder may pay lees, the balance goes to the Govt via the other inputs. In GST, the govt ends up with GST on the full retail cost to the buyer.

They shore do . But by that point the Govt has paided out 90% in GST of property value in advance Ie govt if your a builder funds you 15% of project .

kata001 - 2020-12-09 18:38:00

kata001 wrote:

They shore do . But by that point the Govt has paided out 90% in GST of property value in advance Ie govt if your a builder funds you 15% of project .

You're definitely not an accountant and you definitely don't understand the GST system.

carstauranga001 - 2020-12-09 19:31:00

kata001 wrote:

They shore do . But by that point the Govt has paided out 90% in GST of property value in advance Ie govt if your a builder funds you 15% of project .

You don't understand GST.

The builder gets back the gst they paid, but not the gst you paid.

Govt starts with $0
Builder pays 30k gst on supplies, govt now has 30k
Govt reimburses 30k gst they paid, govt now has 0
You pay 105k gst, govt now has 105k
End, Govt better off 105k

The builder and other steps along the chain collect gst on behalf of the government, the refunding (or offsetting) along that line is just book-keeping required because of that collecton method to make sure gst is only taxed on the final value to consumers at the end of the chain, refunds do not represent 'free money', a cost, or a reduction in gst take.

bitsy_boffin - 2020-12-09 19:44:00

kata001 wrote:

They shore do . But by that point the Govt has paided out 90% in GST of property value in advance Ie govt if your a builder funds you 15% of project .

Shore....

sparkychap - 2020-12-09 20:57:00

carstauranga001 wrote:

15% of 700 was 105 when I went to school.

Where did you go to school I thought it would be closer to 91.3 not 105.

loud_37 - 2020-12-09 21:31:00

loud_37 wrote:

Where did you go to school I thought it would be closer to 91.3 not 105.

700 x .15 = 105.

apollo11 - 2020-12-09 21:37:00

apollo11 wrote:

700 x .15 = 105.

Asking prices for new dwellings are GST inclusive .
So 15% of 700K is 91K.

Sub Total: $608,695.65
GST Amount: $91,304.35
Subtotal: $700,000.00

Edited by sparkychap at 9:51 pm, Wed 9 Dec

sparkychap - 2020-12-09 21:50:00

apollo11 wrote:

700 x .15 = 105.

They said 15% of 700 not 700 + 15%

loud_37 - 2020-12-09 21:52:00

Cheers. Well that's something I've been doing wrong for a very long time.
"To find out the GST component of a GST-exclusive amount, multiply the GST-exclusive amount by 15 percent. To calculate the GST component of a GST-inclusive amount, multiply the GST-inclusive figure by 3, then divide by 23. This will always give you the right answer."

apollo11 - 2020-12-10 00:09:00

Or
$700 divided by 115 multiplied by 15. 700/115x15= $91,304.35
($700x3/23=91,304.35) It's beyond me why they dreamt up that crazy 3/23 formula in the 1st place.
If you want to know the gst exclusive cost then 700/1.15=608,695.65

supernova2 - 2020-12-10 02:44:00

OK now we're agreed on the maths, lets go back to Car's original point:

The Government takes $$$ in GST on new builds which goes into the central government coffers when local governments are struggling to provide the infrastructure needed to support new builds. If they could redirect that to local council infrastructure that could help speed up new developments.

Alternatively, removing GST on new builds (which you take out a mortgage to pay) would reduce the cost of new builds, having a knock on effect on existing house values....

sparkychap - 2020-12-10 07:26:00

loud_37 wrote:

Where did you go to school I thought it would be closer to 91.3 not 105.

You can immedatly see that 15% of 700 is a whole number without even working it out.

curlcrown - 2020-12-10 08:01:00

curlcrown wrote:

You can immedatly see that 15% of 700 is a whole number without even working it out.

And the relevancy is?

zak21 - 2020-12-10 08:38:00

curlcrown wrote:

You can immedatly see that 15% of 700 is a whole number without even working it out.

lol see above working....

sparkychap - 2020-12-10 09:20:00

Thanks ya all for the math's class.... after I did the original post I realised my mistake. Yea, 700 including GST, not plus are different but quite frankly, sitting at home unwell I couldn't be bothered altering it.

The point still stands. Just Tauranga has built thousands of new homes in the boom of the last 5 - 8 years. About 2000 sections built on in my subdivision "The Lakes" to start with and I'd guess as many in Papamoa. Imagine how much GST and tax on each and every builder and associated subcontractor the successive Govt's have taken, but not reinvested into roading etc. It seems time all Councils got some sort of percentage of this back to help further growth. Na, just put out rates up. Oh and add GST on our rates increase too. No worries.

carstauranga001 - 2020-12-10 09:42:00

The biggest GST input for the government comes with the land change. I recently sold small titles as lifestyle and had to pay the GST and no one can claim it back, if i had sold it as a farm still, then the buyer would claim it back and government would get nothing, however with the land change GST was not claimable, only payable and yea i gave them heaps.

3tomany - 2020-12-10 13:43:00

zak21 wrote:

And the relevancy is?

On close inspection, none.

curlcrown - 2020-12-10 18:52:00

curlcrown wrote:

On close inspection, none.

You might make the angry man happy.

zak21 - 2020-12-10 20:22:00

3tomany wrote:

The biggest GST input for the government comes with the land change. I recently sold small titles as lifestyle and had to pay the GST and no one can claim it back, if i had sold it as a farm still, then the buyer would claim it back and government would get nothing, however with the land change GST was not claimable, only payable and yea i gave them heaps.

Didn't you claim the GST at the time you purchased the land? So the government was out of pocket in the beginning.Or at least when the property was originally purchased. Maybe not by you but by the vendor you bought it off.

Edited by evorotorua at 7:34 pm, Mon 14 Dec

evorotorua - 2020-12-14 19:32:00