I wrote about loss ring-fencing in my December article, and it is still a hot topic. With the rules to take effect from 1 April 2019, and the legislation still not finalised, there are a number of questions that remain. I address some of these using case studies, which could well apply to you.  

But first, in case you missed my last blog, the main points from the draft ring-fencing of losses bill are.....

 

On 5 December 2018, the Government released the first draft of legislation dealing with the proposed ring-fencing of tax losses from rental properties. First impression on reading the Bill is that it is extraordinarily complicated and leaves questions unanswered. Here is a quick summary of the key points........

 

There is a reasonable chance you have already heard about the phenomenal rates being offered almost across the board now with most banks having rate specials down into the 3%'s.

What you may not be aware of is that you don’t necessarily need to wait until your current fixed rates expire in order to take advantage of these very low rates.

There is no doubt the Tax Working Group’s recently released interim report is the topic du jour. Accordingly, it is only appropriate that I offer my two cents’ worth, particularly in relation to the comments on a possible capital gains tax. 
 

• The Tax Working Group (TWG) has ruled out a land tax or an inheritance tax, but appears to me to clearly be pushing towards implementation of CGT. They have noted that it is premature to form a view without firstly determining exactly how the tax may apply, but I would be highly surprised if their final report did not support implementation of CGT.
• The TWG is of the view that CGT should apply across assets broadly, so not restricted solely to real estate. It would also apply to shares, intellectual property, goodwill, business assets etc. The one exception to this will be the family home.  

I’ve noticed most people starting this year with a bit of optimism. However, it’s hard to say how much of that is based around fundamentals, and how much is more attributable to the amazing weather we have been having and a decent summer break.

From our side of the Finance Desk, it has actually been a busy start to the year with quite a few purchasers signing up new properties over the break, and general rhetoric has suggested that well-presented properties have been moving relatively quickly. Most banks have also been in contact saying that they are.....

 

The new government, their proposed changes to policies, and their effect on landlords/investors, what does it all mean?

The election has blown over, our political environment has been set for at least the next 3 years, and the term under Labour seems like it will be influential for property owners/investors with the fact it was such a hot topic in the campaign.

To re-cap on our previous newsletter, I am primarily focusing on the property/rental market, the economy and how this will impact us as investors.

From this perspective, the Labour party plans on the following changes, which I’ve grouped together based on.....
 

Watch Matthew Gilligan and Tony Alexander as they give their post-election analysis. They discuss what is likely to happen in the economy and property market over the next 12 months, factors influencing the market, and how you can invest and profit in the current and unfolding conditions.

 

Election time is less than a couple of days away and a lot has changed in the last 6 weeks with it being interesting to see if the ‘personality politics’ that worked so well for National under John Key also work with Jacinda Ardern taking the reigns over a Labour party that until that stage had managed to continue to trip over itself over the best part of the last decade. Under MMP....

 

Labour has targeted investors in its housing policy released. Ringfencing tax losses, five-year bright line rules and a tax committee (to mask their desire to bring in capital gains tax) are all on their agenda......

 

After a fun couple of months with the Lions and American’s Cup taking up much of the countries attention I now expect this to divert to the upcoming election. While the property market has already slowed considerably I expect it may continue to do so until post 23^rd of September.

While the mainstream media seems to be doing its best to crash the market in reality it is just not going to happen and there is no “cliff” we are about to fall off.....

 

Most of you will already be aware that funding is much more difficult than it was only a year ago and this is before proposed additional changes such as Debt – to – Income Ratios and the potential for the RBNZ to increase the capital banks require to hold. We have already seen over the ditch Australian banks be regulated in regards to lending on an interest only basis and here we.....

 

If you missed our latest Webinar with David Faulkner on "Successfully navigating the challenges of being a Property Investor and Landlord in 2017" click on the below link to watch the recording.
 

Click here to watch the KPM Webinar

 

This morning the Reserve Bank has released its latest Financial Stability Report. This is released twice a year and has previously been the platform which the RBNZ has used to announce measures such as some of the previous LVR restrictions.....

 

 

I was recently asked whether there was an upper limit to the ratio between property price and household income, which in Auckland currently sits at about 10 to 1. In other words, the average property price is worth 10 times the average annual income.

Also known as the median multiple, this is an internationally recognised measure of housing affordability and is calculated by dividing house price by.....