We are screwed. And tenants are screwed even more.
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|---|---|
| 1 | Loan interest is non-deductable? That kills the business model of those building rentals. masturbidder - 2021-03-23 10:36:00 |
| 2 | They are talking that new builds may be exempt - sounds messy.... "Consultation will cover an exemption for new builds acquired as a residential investment property, and whether all people who are taxed on the sale of a property [for example under the bright-line tests] should be able to deduct their interest expense at the time of the sale," today's announcement said. asp001 - 2021-03-23 10:43:00 |
| 3 | Yup Rents are going up that’s for sure magicroundbout - 2021-03-23 10:44:00 |
| 4 | It does worry , it means I will have to save a lump out of each rental payment, which I have been using to pay water costs, rates increases, garden maintenance, house maintenance for tenants benefit. I have been keeping the rent well below market rates as believe in being ethical as I intend to return once family obligations are met... don't want to increase rent, want security for the people 'borrowing' my home ... argh!!! upfront1 - 2021-03-23 10:46:00 |
| 5 | upfront1 wrote: apollo11 - 2021-03-23 11:09:00 |
| 6 | upfront1 wrote: masturbidder - 2021-03-23 11:13:00 |
| 7 | The biggest rent subsidy is being removed. pcle - 2021-03-23 11:31:00 |
| 8 | It would seem as usual the people drafting the legislation have not looked at consequences. I agree with other posters that rents will go up to cover the lack of tax benefits. We have a property in Raumanga Whangarei which possibly may be taken under the Public Works Act. We have owned it for approx. 7 years - if this happens under the 10 years will we have to pay tax on the increase in value? Meantime anyway we are in limbo as to whether this will happen - tenant is interested in buying it, but we rightly pointed out that until a decision is made regarding the widening of the road, it is unethical of us to sell to them, as the property may be needed for the project. Without reading the whole announcement it would seem to be very messy and I do not think it will achieve anything much - definitely not for tenants, and even not much to curb speculators. Capricorngirl mlarkin - 2021-03-23 11:55:00 |
| 9 | mlarkin wrote:
It's not unethical at all to sell it to them if they know about the road widening and you both agree on a price taking that risk/reward into account. I agree it would be immoral (unethical would be if you're an real estate agent for example) to sell it to them without telling them about the road widening but some might argue that it's their job to do their due diligence. loose.unit8 - 2021-03-23 12:33:00 |
| 10 | Mlarkin the 10 year clause will not apply to you as you have bought under a different set of bright line tests. msigg - 2021-03-23 12:33:00 |
| 11 | mlarkin wrote:
Yep, yep and yep. This is painful for everyone and what happens when you don't really have a strategy. Predictable. sweetgurl108 - 2021-03-23 12:36:00 |
| 12 | If your rental is highly mortgaged, then the interest is a considerable part of the total expenses. If the government suddenly changes the cost structure of your business, by increasing them in some way, what choice is there but to put up the price? All landlords will be justified in doing this. How does this help the tenant? If they are the ones that will always need to rent, then they are one step closer to the street, and if they are the ones who might be a first home owner one day, them they are unable to save as quickly for their deposit. Not sure this was well thought through at all. The government needs to work out that unless it wants to be the biggest landlord of them all, then they need to understand what makes the Ma and Pa landlord so VERY important to NZ's housing regime. Rents are going to go up a lot. If I borrowed $400K to get a rental, at 5% interest p.a, then this is a $20K per year expense. If I earn $70K then I will lose 33% of this $20K under the new rules. Which is $126 per week. Not insignificant I would think, if this just gets recovered via a rent rise. oskybosky - 2021-03-23 12:41:00 |
| 13 | It looks like destroying the private rental business is the plan. pcle - 2021-03-23 12:44:00 |
| 14 | msigg - we may have bought under a different set of brightline rules, but I am never confident over changes in both tenancy and landlord rules. Don't trust the interpretation of changes by inexperienced pen pushers in the backrooms of beauracy (spelling)! Unfortunately this government and their predecessors have meddled too long and achieved very little in recent years. Supply and demand has always driven rental prices and the more government rules are introduced the more tenants suffer. Capricorngirl mlarkin - 2021-03-23 12:47:00 |
| 15 | Auctions might be interesting in the next few weeks if investors start pricing in the non deductibility of interest into pricing. I think people will still keep an investment property as part of a retirement plan if it's generating an income stream. There is still probably $150 billion in term deposits so plenty of money around to buy if some current investors want out. I guess investors will really start screaming like a stuck pig if the RBNZ removes IO loans for non owner occupiers. ian1990 - 2021-03-23 13:12:00 |
| 16 | well i just read that 40% of homes are being sold to investors. This should turn things around a little to people buying their own homes to live in. When I think back to my teens, most rentals were crappy old villas that were divided up into little apartments. Some of those building were decaying and rotten but hey it was cheap rent. Homes as such were not rentals. They were owned by families. The idea of a three-bedroom house being a rental just didn't happen. That was an owner occupier home. It should get back to that. kamo631 - 2021-03-23 13:43:00 |
| 17 | kamo631 wrote:
The aforementioned cheaper rentals don't exist any longer due to the rules brought in in the last couple of years. People who used to be able to rent them just have to live with their parents, try and get a housing NZ house (probably one of the reasons the waiting list has increased to 5 times what it was when Labour got into government) or live on the street now. Edited by loose.unit8 at 2:24 pm, Tue 23 Mar loose.unit8 - 2021-03-23 14:15:00 |
| 18 | Wow, fun times. Can't see any investors new to the market stepping in. For those of us already here I guess it's just another day at the coalface. Interest deductions, not sure about the fine print on that one for existing buyers. Some sort of phased rollout or not? There'll be a few baling rapidly if they are now in over their heads, on this new playing field. Next thing we will have rent rises followed by a rent freeze, as recent landlords desperately try to stay out of mtgee auction territory. When you can only put rent up once a year, many will be making it a big one. How to exacerbate a rental shortage 101. Commercial property will be the winner here. Edited by rose2004 at 2:47 pm, Tue 23 Mar rose2004 - 2021-03-23 14:45:00 |
| 19 | Properties at the bottom of the market will have accelerated value gains in the next six months as well. Edited by loose.unit8 at 3:00 pm, Tue 23 Mar loose.unit8 - 2021-03-23 15:00:00 |
| 20 | The more government’s try to fix things,,,,, the more they theme to stuff things up ..... and it dosen’t matter what it is, if we had a true” free market “ we probably would not have a rental shortage or a housing crises, simply because the market would supply them to fill any shortages that would occur. But because of government interference ( let’s call it rules and regulations / or restrictions) that’s the only reason we are on this mess. Just let’s hope the government can supply more houses then kiwi build could. ????. ( good luck with that! argentum47 - 2021-03-23 15:03:00 |
| 21 | Who complained when they cut interest rates in half 5 times since the GFC? funkydunky - 2021-03-23 15:09:00 |
| 22 | argentum47 wrote:
Kiwibuild was 9 years in the planning and they didn't even get the basics right. If anyone has any faith left in this government's ability to build houses then they are an idiot. loose.unit8 - 2021-03-23 15:12:00 |
| 23 | Discrimination against those in business who happen to derive income from their business investment- property. market1 - 2021-03-23 16:35:00 |
| 24 | It's hard to see what they are trying to achieve, because (as with most landlords) I'll be passing the extra expense on to my tenants? Even if I did sell my rental, because the occupancy rate (i.e. per bedroom) is considerably lower for home owners than renters (check Govt Stats site if you're interested) I'll be adding to the housing shortage. Although well intended I think the law of unintended consequences will make this about as successful as Kiwibuild! sr2 - 2021-03-23 17:11:00 |
| 25 | This message was deleted. puddleduck00 - 2021-03-23 17:12:00 |
| 26 | The member deleted this message. puddleduck00 - 2021-03-23 17:18:00 |
| 27 | *popcorn, anyone?* sparkychap - 2021-03-23 17:21:00 |
| 28 | Bob Jones got out of domestic rentals in his first years as a landlord. You can see why. bryshaw - 2021-03-23 17:36:00 |
| 29 | puddleduck00 wrote: I fully agree. Using ones age/wealth/educational advantages to screw over young people, in some case their own children and grandchildren is morally bankrupt. Then if that wasn’t disgusting enough, these same people who have done this will then sit back and take a pension paid for by the taxes generated by those same people they screwed over. Some people’s greed knows no end. Edited by lakeview3 at 5:39 pm, Tue 23 Mar lakeview3 - 2021-03-23 17:39:00 |
| 30 | puddleduck00 wrote: LoL johotech - 2021-03-23 17:50:00 |
| 31 | sparkychap wrote: orphic1 - 2021-03-23 18:38:00 |
| 32 | This message was deleted. kittycatkin - 2021-03-23 18:48:00 |
| 33 | kittycatkin wrote: orphic1 - 2021-03-23 18:52:00 |
| 34 | Rents can't keep going up as people don't have that much money, property investors like any other business need to get there product cheaper, or not be so leveraged up. loud_37 - 2021-03-23 19:04:00 |
| 35 | kittycatkin wrote: probably lakeview3 - 2021-03-23 19:05:00 |
| 36 | orphic1 wrote: yes that’s right you gang up with her, you two will have a great time having a crack at me! Oh wait, that’s just you, she picks on everyone else as well! lakeview3 - 2021-03-23 19:06:00 |
| 37 | Listen to the screams, tax, OMG, what an idea. lythande1 - 2021-03-23 19:23:00 |
| 38 | lythande1 wrote:
exactly, i think it means we will pay about $800 a year more.. i can live with that. heather902 - 2021-03-23 19:24:00 |
| 39 | Homeless numbers will grow even more. Pretty terrible now. Oh well. Enjoy the even higher rents. pcle - 2021-03-23 19:39:00 |
| 40 | lakeview3 wrote: orphic1 - 2021-03-23 19:54:00 |
| 41 | orphic1 wrote: Youre not my boss! lakeview3 - 2021-03-23 19:59:00 |
| 42 | masturbidder wrote:
Personally, I don't see why a property investor or someone that makes money on an asset that pays itself off, should get tax deducted from the income. solster - 2021-03-23 20:42:00 |
| 43 | Perhaps we will now start to see purpose build high density rentals instead of investors snapping up family homes. solster - 2021-03-23 20:43:00 |
| 44 | I also think, with less people\investors going for family homes, more rentals will be available and demand will cool off the rental market too! solster - 2021-03-23 20:45:00 |
| 45 | mlarkin wrote:
Only those bought AFTER the 27 March 2021 is subjected to the 10yr. rayonline_tm - 2021-03-23 20:47:00 |
| 46 | Short term this new legislative tax change will impact on landlords. Medium to long term, this tax change will negatively impact on tenants. The government will now expose tenants to the cold draughts of cause and effect. market1 - 2021-03-23 20:50:00 |
| 47 | rayonline_tm wrote:
Yes there is a sliding scale as the tax change come in like a creeping tide. God help tenants in the future. This will impact on them severely as the Government takes away what was a win for Landlords and a win for Tenants. For some Landlords, the tax on interest deduction being taken away, then applies the landlord to look for more income. That will be the tenancy income. Bad decision by Labour. market1 - 2021-03-23 20:54:00 |
| 48 | Short term IMHO, Investors will have to think longer term, if they no longer get tax relief, home buyers will have more choice and perhaps better chances of purchase, renters will have more availability, and with less demand cool rental pricing. solster - 2021-03-23 20:56:00 |
| 49 | masturbidder wrote: rojill - 2021-03-23 21:02:00 |
| 50 | solster wrote: rojill - 2021-03-23 21:18:00 |
