Good morning and/or afternoon.
We here at My Thinks pride ourselves on our regular contributions to the prevailing zeitgeist. Today’s post is no exception. We will be taking a deep dive into the recent changes to investment property rules that have seen all property investors become instantly destitute. Our deep dive will consist of over 410 words, so, in retrospect, the previous sentence appears to be somewhat of a misnomer. Let’s call this a dipping of the big toe into the pond scum of analysis.
With the extension of the brightline test to ten years and the removal of the ability of investors to claim interest payments in their tax things are not looking good. I’ve been listening to the commentary from the various investor organisations and opposition politicians and I am very surprised that we even still have a housing market.
I mean, how on earth is a property investor meant to make money when all they have to fall back in is double digit inflation over the ten year period they have to hang onto a house before flipping it?
I agree with Judith Collins. No-one in their right mind would invest in property now because the income they earn from a capital gain is now being fully taxed. I would be very surprised if Amy Adams doesn’t instantly sell her three houses – if the trust that owns them for tax purposes allows it. Maybe she will be joined by Andrew Bailey dumping his three houses (admittedly he only owns a share of the Coromandel property), or Gerry Brownlee getting rid of his five properties. Either way, if I owned so much property, as does the National Party, I would be really worried about paying so much tax. Luckily trusts come into play.
Mind you, Labour really have shot themselves in the foot here. If I was an MP with loads of property, the last thing I’d be doing is changing the law so I had to pay more tax. Unless they want to pay more tax because it’s the right thing to do? It doesn’t really make much sense.
Either way, if you personally own more houses than the entire 18-30 year old age group of New Zealand, then hopefully you can make money out of all your other investments. Or your superannuation fund. Or your commercial property investments. Or your many business interests.
It really is a sad, sad day for property investors.