Posts by BenWilson
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Cracker: Johnny Foreigner & the Auckland…, in reply to Jim Welch,
Indeed. Which makes it the number one dodge for property owners. That encourages people to have properties that are worth considerably more than they actually need. All the profit is gravy.
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Hard News: The Real Threat, in reply to Jarno van der Linden,
I'd never thought of it that way. The meta-ness of the data is in the eye of the beholder.
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Cracker: Johnny Foreigner & the Auckland…, in reply to Chris Waugh,
Not necessarily. There’s plenty of examples up here of people buying up many, many apartments as an investment and leaving them empty.
I suggest that the intention is to sell them for a profit in the end, and that is based on an anticipation that they will eventually be tenanted in some way. Eventually might even be after the whole lot is knocked down and turned into something else, if they are being extremely speculative. Or if they have some inside knowledge or power, which is highly possible in China, no?
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I think you’re thinking of stamp duty which is applied to home sales in Aus, not CGT.
sez Wiki
CGT operates by having net gains treated as taxable income in the tax year an asset is sold or otherwise disposed of.
This applies to investment property. Although I'm not sure if that's exactly what you were referring to.
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Cracker: Johnny Foreigner & the Auckland…, in reply to Jim Welch,
So you’d just move to a completely different community every time you could realise a profit from your family home?
Not every time, but the value of the money could easily be a lot more than the value of the house, to me. My community is my address book anyway, I don't lose them by moving house. I have to travel to see people now. My neighbors are not my close friends, particularly, and if they were, I would make sure to keep seeing them.
Sounds like pretty bloodless property-bubble thinking to me.
I'm not sure if it's my kind of thinking that causes bubbles, or the kind that simply can't see a million dollars as a million dollars, and would genuinely find being given it a hardship. That's so alien to me that I couldn't understand why Damien used that example. I do not feel in any way entitled to live in a particular area. I'm not even entitled to live in my own house now, if I can't pay the mortgage, and that's the biggest bill we have every month. Someone who managed to buy in Sandringham and made a million dollars is not an unlucky person. You have to think completely differently to me to even begin to think that. I can think of one hell of a lot more useful things I'd do with that cash than merely "live in an unremarkable house in Sandringham".
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Cracker: Johnny Foreigner & the Auckland…, in reply to JonathanM,
CGT in Oz is taken at the sale, as far as I know. It's also nowhere near as much as most people think, because it is inflation adjusted. If you take it at the time of the sale, you know they've actually got the money, so no one is forced out of their home by the tax. It is practical - taxing assets before their profits are realized is not a good idea, IMHO, because the profit is a function of whatever method you use to guess the value. At the sale, there is no guessing, the profit is known. Property value can be guessed reasonably accurately, but some things really aren't like that, like businesses, or valuable art. Also, it's hard to break a piece off the property to pay the tax, whereas it's not hard to break a piece off the profits from a sale.
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Cracker: Johnny Foreigner & the Auckland…, in reply to Damian Christie,
No, demand’s source in this case is “people who want to buy property” regardless of whether they want to live in it
If they're not going to live in it, they're going to rent it out. If no one will rent it, it has no value, unless someone else will buy it, which in turn will be a proposition based around whether they can live in it, or rent it out for money. Property investment 101 here. I expect most foreign investors who don't want to live here are professionals and understand this extremely basic piece of financial wisdom. It really does actually matter if people will live in the house, and how much they will pay to do so.
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Cracker: Johnny Foreigner & the Auckland…, in reply to Damian Christie,
well I don’t think “stoked” would describe it.
In my case it would describe it very well. To me, 800K is a hell of a lot of money, and a house is just a house.
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Cracker: Johnny Foreigner & the Auckland…, in reply to andin,
Funny thing, there’s a lot of people who don’t think like that. And surprise, surprise!
It is very hard to accept, admittedly. I struggle periodically to convince my wife that we'd be a whole lot better off if we just sold our place and rented for a few years while I'm retraining. But we'd be "going backwards". My plan is to turn up the heat on this idea when I get a stronger feeling that the Reserve Bank really is going to jack up interest rates. But since they don't have any other plan for the economy than to debt-fuel it, the critical moment has not yet come.
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Cracker: Johnny Foreigner & the Auckland…, in reply to andin,
Some very wealthy people consider themselves battlers. Guess some can make anything suck
Once Were Battlers?
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