Brightline, trusts...and other new rules fishooks
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| 1 | Some more little fishooks with trusts and the ten year brightline. In fact every aspect of the new rules has fishooks that some landlords probably haven't thought through yet. If you transfer a long held rental into a family trust, the ten years starts again. One of the very few ways left to get your own property back is by moving into it yourself. If it's in a trust though, can you still use that? Certainly under the old rules a property owned by a company (and a trust?), didn't qualify for a shorter notice period, for owner or family moving in. Can we then assume that that is still the rationale? If so, getting a property back that is in a trust or company, pretty much means selling it...(assuming the tenants aren't super terrible and doing major work isn't on the cards). Other thoughts (outside of the trust issues)...not only can you not claim interest expenses, you are then also paying tax on rent as if it was all principal (and therefore 'profit'). So if you buy a rental where the rent covers the mtge, come tax time, that rent is also seen as income and you will have a nice big tax bill. I suspect some newbys are not allowing for the, on the face of it obvious fact, that not deducting also means paying tax on it...and potentially moving into a higher tax bracket because of it. Edited by rose2004 at 9:58 am, Fri 26 Mar rose2004 - 2021-03-26 09:56:00 |
| 2 | oops fish hooks, lol rose2004 - 2021-03-26 10:42:00 |
| 3 | The below blog post has some discussion about beneficiaries moving in to a trust owned rental. Answer - maybe, maybe not. It's a few months old though so might be something more definitive now. NBR headline today - 'A housing policy on the hoof'. Yep. Meantime Finance Minister Robertson says people who can't afford their rent can look elsewhere. That sounds like an official Ok to hike rents to cover increased costs and rents and tell tenants the government said to move. artemis - 2021-03-26 10:57:00 |
| 4 | Pity about democracy and due process. pcle - 2021-03-26 11:00:00 |
| 5 | pcle wrote:
Well you say that, but landlords are doing very well indeed under this government. Fewer rentals, higher rents, upgrades paid for by tenants, capital gains, no need to take on even slightly risky tenants. Not to mention no CGT for most sellers. Time to stop being frugal and go for luxury. What's not to like? artemis - 2021-03-26 11:08:00 |
| 6 | pcle wrote:
Far out...…what an overreaction. No warning you say ...well we could all see that doing something to stop the housing crisis was needed or did you miss this? The requirement was of a scale that only Govt could change macro driver/economic settings to achieve it...the market could not..it has failed abysmally, so far, to moderate. Perhaps you could look for some land to buy and put up some new dwellings for rent. We need new stock not old stock endlessly recycled through Trusts, M & D landlords, LTCs etc, And we needed to start yesterday preferably. There will be discussion on the nuts and bolts. shanreagh - 2021-03-26 11:26:00 |
| 7 | The unfortunate thing is that they should have started this under the Key government. But perhaps they were trying to be a calm hand on the wheel, while the GFC typhoon raged? And let's not forget: 'High house prices are a good thing'. From the mouth of the Donkey himself. apollo11 - 2021-03-26 11:51:00 |
| 8 | The front line of the so-called housing crisis is the social housing waiting list and the number of households in transitional housing (motels etc). Though still a minute % of the population the change in numbers and costs have escalated dramatically since September 2017. Before that numbers and costs, while not ideal, were not that different over many years given population and demographic changes. Most other households have a roof over their head one way or another. Ask yourselves what changed. Better still, ask landlords as they have been dealing with the many increases in cost, compliance, risk along with rolling their eyes at the media depictions of them. And making decisions about keep/sell/rents/what tenants are less risk - because they can. If those decisions result in higher rents and a shortage of rentals for less than ideal tenants, the tenants can look elsewhere. Says Mr Tin Ear. artemis - 2021-03-26 12:38:00 |
| 9 | apollo11 wrote: so right. That guy turned out to be a real dud. Sadly a reflection of the true state of that party, even today, long after he has gone. As for alternatives, well I am afraid it’s the best of a bad crowd.... lakeview3 - 2021-03-26 16:07:00 |
| 10 | shanreagh wrote:
You do know that in quite few areas new builds are to capacity and sold off the plans 12 months in advance? Where are all of these mythical new houses to invest to provide accommodation going to come from? Especially given the current constraints with land availability for building, labour shortages and materials delays. Yes there's supposed to be some Govt infrastructure spend but that will take at least two to five years of getting stuff in the ground before a house can be built, longer with this lot given the way that most of the "6-12 month shovel ready projects" still haven't made it through their systems - @ early March 205 projects approved, only 49 started, and it's been about 9 months since awarded. hers.nz - 2021-03-27 11:41:00 |
| 11 | Carter Holt Harvey supply shakeup could change the future of housing in New Zealand, federation says A decision by Carter Holt Harvey to stop supplying wood products to major retailers could redefine how houses are built in New Zealand, an industry organisation says. Mitre 10 and Bunnings have confirmed to Stuff Carter Holt Harvey has stopped supplying them with wood products. Mitre 10 chief of customer solutions Chris Peak said Carter Holt Harvey Woodproducts had told Mitre 10 that it could not supply it with structural timber for the foreseeable future. “This poses an industry-wide issue,” Peak said. gabbysnana - 2021-03-27 17:23:00 |
| 12 | you mean those that only build houses with built in garages kamo631 - 2021-03-27 18:36:00 |
| 13 | Why is that Kamo? sparkychap - 2021-03-27 19:06:00 |
| 14 | They closed a loophole. masturbidder - 2021-03-27 19:16:00 |
| 15 | This message was deleted. kittycatkin - 2021-03-27 19:24:00 |
| 16 | I wonder what happens now? ???? lovelurking - 2021-03-27 19:28:00 |
| 17 | This message was deleted. kittycatkin - 2021-03-27 19:30:00 |
| 18 | This message was deleted. kittycatkin - 2021-03-27 19:32:00 |
| 19 | kittycatkin wrote: That's what he said recently but when he was PM he did comment that rising house prices were good for public confidence and the use if withdrawn equity pumped spending and the GDP. sparkychap - 2021-03-27 19:42:00 |
| 20 | How about buying a rental in a company. When it comes to sell, you don't sell the house but instead sell the shares in the company. No brightline test as ownership of the house technically is still the company. Also bonus for the owner, the brightline test period continues (e.g. if the company has owned the house for 6 years then that continues with the new owner) logo - 2021-03-27 22:15:00 |
| 21 | lovelurking wrote: air bnb and empty homes next and if that doesn’t work, income and asset tested pensions. Also an increase in interest rates is possible. Don’t get angry about it. Blame it on people’s collective greed and FOMO. Edited by lakeview3 at 10:19 pm, Sat 27 Mar lakeview3 - 2021-03-27 22:17:00 |
| 22 | logo wrote:
Yeah, nah. We asked our accountant and lawyer about that when we sold our previous rental that had been our family home. Because it is real property (i.e. real estate) you can't do it via company share sale. Also can't expense agent's fees but you can if you use a broker to sell any other business, go figure! Edited by hers.nz at 2:08 pm, Sun 28 Mar hers.nz - 2021-03-28 14:08:00 |
| 23 | lakeview3 wrote:
Hmmm, I wonder what the costs would be to income and asset test every pensioner every year and how much would be clawed back from those effing boomer pensioners opps, I mean those lovely old people in the exclusive R65 Gold Card club... lovelurking - 2021-03-28 14:18:00 |
| 24 | This message was deleted. kittycatkin - 2021-03-28 14:31:00 |
| 25 | This message was deleted. kittycatkin - 2021-03-28 14:34:00 |
| 26 | This message was deleted. kittycatkin - 2021-03-28 14:36:00 |
| 27 | kittycatkin wrote: apollo11 - 2021-03-28 15:01:00 |
| 28 | This is another interview he did: apollo11 - 2021-03-28 15:05:00 |
| 29 | And this is interesting, too- discussing how the opportunity to tackle this issue was wasted: apollo11 - 2021-03-28 15:12:00 |
