Property gloom is good news

Three months have passed since John Key chickened out of taxing capital gains and as luck would have it, we are making progress.

Monday's New Zealand Herald brought news that house prices remain static, sales are down, gloom rises. Gloom for those who borrowed too much for a rental house maybe, but good news for the future.

It could have been so different after the May Budget. Remember the next day's real estate advertisements? "The [tax] changes weren't as formidable as they could have been," chirped one property investment adviser, Tanya Kwasza, who calculated the loss of depreciation claims would cost a $350,000 house only $30 or $40 a week, the equivalent of no more than a 1 per cent rise in interest rates.

Tax specialist Mark Withers said: "Proper investors can breathe a collective sigh of relief ... There will be no capital gains tax, ring fencing of losses, deemed rate of return, land tax ... I believe property investors will now return to the market."

I wouldn't wish unemployment on anyone but property investment touts. There must be something more useful they could do.

To read the full NZ Herald article, click here

Posted: 14 Aug 2010

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