Latest / The SME Stream / Ed McKnight: A capital gains tax would require clarity

Transcript

Ed McKnight: A capital gains tax would require clarity · The SME Stream

• 0:01
  Speaker 1: House as a crowd.
• 0:12
  Speaker 2: There's always something.
• 0:15
  Speaker 3: Way house, proud.
• 0:20
  Speaker 2: Nothing, ladies, littlemen, welcome to back to the show. This
• 0:27
  Speaker 2: is the Weekend Collective. My producer Tyra is looking incredibly
• 0:30
  Speaker 2: happy because there's nothing that Tyra loves more than finding
• 0:33
  Speaker 2: a song to theme to whatever we're talking about. And
• 0:36
  Speaker 2: so well this is Madness our house and this is
• 0:39
  Speaker 2: the One Roof Radio show. So there's one nil to
• 0:42
  Speaker 2: Tyra on that one. There's a clock up a win anyway. Uh. This,
• 0:46
  Speaker 2: by the way, if you miss out on any of
• 0:48
  Speaker 2: the hours, you definitely want to catch the podcast. Just
• 0:51
  Speaker 2: look for the Weekend Collective on iHeartRadio or wherever you
• 0:54
  Speaker 2: get your podcasts. Joining me for the One Roof Radio show.
• 0:58
  Speaker 2: He's a resident economist at Partners. It's Opes and his
• 1:03
  Speaker 2: name is Ed McKnight. Good afternoon, Great to be here, Tim,
• 1:07
  Speaker 2: of course it is. Yeah, ah, how are you.
• 1:10
  Speaker 4: We're doing really good. We're gonna we've got some great
• 1:13
  Speaker 4: topics on today as well.
• 1:14
  Speaker 2: We do. Now, look look at this is not a
• 1:17
  Speaker 2: topic that ever really goes away, but then again, I
• 1:19
  Speaker 2: mean it is the property are so we are going
• 1:21
  Speaker 2: to sort of have There are certain themes that pop
• 1:23
  Speaker 2: up from time to time. But the reason that this
• 1:26
  Speaker 2: we're going to talk about CGT a little bit or
• 1:28
  Speaker 2: a lot, oh eight hundred eighty ten eighty text nine
• 1:31
  Speaker 2: two nine two, don't forget standard SMS charges apply is
• 1:36
  Speaker 2: Antonio Watson, the CEO of A n Z, said that
• 1:40
  Speaker 2: she thought now was about the time for it. And
• 1:43
  Speaker 2: I think that I think that, if I interpret from memory,
• 1:48
  Speaker 2: her reasons for it was that she had maybe inherited
• 1:53
  Speaker 2: or something. She'd come into ownership of a of a
• 1:55
  Speaker 2: of a residential property and she looked at the returns
• 1:59
  Speaker 2: for it. This is what's she likes the share market,
• 2:03
  Speaker 2: and she thought, well, and she thought when she looked
• 2:06
  Speaker 2: at the calculations for a property, she basically went, well,
• 2:10
  Speaker 2: of course, people if they're buying a property to me
• 2:13
  Speaker 2: have given the poor yield, then really, let's be honest,
• 2:16
  Speaker 2: people are buying it for the capital gain. Therefore, from
• 2:18
  Speaker 2: a point of view of fairness, it seemed to me
• 2:20
  Speaker 2: she was saying you should probably have a capital gains
• 2:23
  Speaker 2: tax on it, and that we did talk back on
• 2:26
  Speaker 2: this in the middle of the week as well, and I, okay,
• 2:32
  Speaker 2: I'm going to be forgetting whether I say anything smart
• 2:35
  Speaker 2: or dumb, which is probably the way I run anyway
• 2:40
  Speaker 2: I could probably find I think there was a very
• 2:43
  Speaker 2: good point made by David Farrer on Heathers Show that
• 2:46
  Speaker 2: people who don't mind the idea of a capital gains
• 2:50
  Speaker 2: tax all of a sudden when they read what the
• 2:52
  Speaker 2: legislation entails, if there's something that doesn't suit them, there
• 2:55
  Speaker 2: all of a sudden they don't like it. But in principle,
• 3:00
  Speaker 2: taking into account issues of fairness and family homes and
• 3:03
  Speaker 2: things like that, I'm actually not, in principle offended by it.
• 3:07
  Speaker 2: It's not I've got other things I would worry about
• 3:10
  Speaker 2: a lot more. Because, for instance, if I could make
• 3:12
  Speaker 2: a truckload and property, so I could buy and flick
• 3:15
  Speaker 2: something on and make and we know that is taxed anyway.
• 3:18
  Speaker 2: But let's say over ten years, I could buy a
• 3:20
  Speaker 2: property and it would double in value twelve years and
• 3:22
  Speaker 2: I could make a bit of money that way. The
• 3:24
  Speaker 2: fact that I would have to pay tax on it
• 3:26
  Speaker 2: doesn't freak me out, because I can still make a
• 3:29
  Speaker 2: lot of money. It's like some people make a lot
• 3:30
  Speaker 2: of money when they go to work, and the fact
• 3:32
  Speaker 2: that they get text on that large income doesn't deter
• 3:35
  Speaker 2: them because they're still making a lot of money, so
• 3:37
  Speaker 2: it doesn't bother me so much. Does a CGT bother you?
• 3:43
  Speaker 2: And I mean we're talking businesses and things, but this
• 3:45
  Speaker 2: is the property show, so we have sort of got
• 3:47
  Speaker 2: a CGT up to a point away. You go, ed McKnight.
• 3:50
  Speaker 4: Yeah, I'm not a fan of it, Tim, And I'll
• 3:52
  Speaker 4: tell you the reason why. We'll come to the fairness argument.
• 3:55
  Speaker 4: So I think it's important to talk about them. But
• 3:57
  Speaker 4: the first point where I start is, Okay, the government
• 4:01
  Speaker 4: wants to raise more revenue. Do I want to give
• 4:04
  Speaker 4: more money to the government?
• 4:05
  Speaker 5: Now?
• 4:06
  Speaker 4: My view is that the government is not very good
• 4:07
  Speaker 4: at spending our money as it is anyway, So do
• 4:11
  Speaker 4: I really want to give more of that money to
• 4:14
  Speaker 4: the government. But I remember speaking to Peter Dunn. He
• 4:17
  Speaker 4: was the leader of United Future, and he was saying
• 4:21
  Speaker 4: that before you introduce a new tax, the first thing
• 4:24
  Speaker 4: you've got to think about is what do we want
• 4:27
  Speaker 4: to spend the money on, Because the purpose of the
• 4:29
  Speaker 4: tax system is to raise money in order to fund
• 4:32
  Speaker 4: the government's programs. And the big issue I have with
• 4:36
  Speaker 4: the debate around a capital gains tax is we usually
• 4:39
  Speaker 4: start from the perspective of should we have one or
• 4:41
  Speaker 4: should we not without really thinking about well, what are
• 4:45
  Speaker 4: we going to spend that money on? And there are
• 4:47
  Speaker 4: two options. So if we bring in a capital gains tax,
• 4:50
  Speaker 4: one option is to say, well, we've got an aging
• 4:53
  Speaker 4: population here in New Zealand, the cost of healthcare, the
• 4:58
  Speaker 4: cost of the pension system is going to arise, and
• 5:01
  Speaker 4: so one option is to bring in a capital gains
• 5:04
  Speaker 4: tax to pay for that, so that we don't have
• 5:06
  Speaker 4: to change any of those settings. So that could make sense.
• 5:09
  Speaker 4: The other one that sometimes comes up is let's introduce
• 5:13
  Speaker 4: a capital gains tax. But what we will do is
• 5:16
  Speaker 4: what's called a tax switch, where we then decrease the
• 5:20
  Speaker 4: tax rates for things like income tax. Now, I kind
• 5:25
  Speaker 4: of like the idea of a tax switch. I like
• 5:27
  Speaker 4: the idea of paying less in terms of income tax,
• 5:30
  Speaker 4: because at the moment, what happens is that even quite
• 5:33
  Speaker 4: low income earners pay a decent proportion of their income
• 5:37
  Speaker 4: in tax.
• 5:37
  Speaker 2: Mind you, high income earners pay a huge percentage. If
• 5:40
  Speaker 2: we're talking income. If you're earning let's plack three hundred
• 5:44
  Speaker 2: thousand a year, which people consider a blooming good income,
• 5:47
  Speaker 2: you're paying a lot of you do I think people
• 5:50
  Speaker 2: forget that it's all like people go with the rich
• 5:52
  Speaker 2: people I'm not paying a lot of tax. Well, maybe
• 5:54
  Speaker 2: on their assets, but when it comes to income, and
• 5:57
  Speaker 2: this is not a property argment, this is just correcting
• 6:00
  Speaker 2: the facts that actually, people who earn a lot of
• 6:01
  Speaker 2: money through income tax through income pay a truckload in tax.
• 6:07
  Speaker 4: And one thing you've got to think about is if
• 6:08
  Speaker 4: you're earning one hundred thousand dollars or more a year,
• 6:11
  Speaker 4: and about sixteen percent of wage and salary earners earn
• 6:15
  Speaker 4: one hundred thousand dollars or more per year, about twenty
• 6:18
  Speaker 4: five thousand dollars is what you're paying in tax per year.
• 6:21
  Speaker 4: And I think what everyone needs to ask themselves is
• 6:24
  Speaker 4: are you getting good value for money for that twenty
• 6:27
  Speaker 4: five thousand dollars. And if we were to talk about
• 6:29
  Speaker 4: all of the different things that we really care about.
• 6:31
  Speaker 4: We care about having decent roads, we care about educating
• 6:35
  Speaker 4: young people, we care about taking care of pensioners, we
• 6:37
  Speaker 4: care about a healthcare system. You probably say, Okay, well,
• 6:40
  Speaker 4: that's all very well and good, but how's that going
• 6:42
  Speaker 4: for us now? And we've seen a huge expansion of
• 6:45
  Speaker 4: the state over the last four to five years, especially
• 6:48
  Speaker 4: over COVID times. And my question is have things gotten
• 6:52
  Speaker 4: substantially better given that we are devoting a higher share
• 6:56
  Speaker 4: of our GDP to the public sector. I think any
• 6:59
  Speaker 4: person on the street would probably say no. So do
• 7:02
  Speaker 4: we want to give even more money to the government.
• 7:05
  Speaker 2: I can argue for you in a way because I
• 7:07
  Speaker 2: think that what you touched on before was also, you know,
• 7:11
  Speaker 2: how do we raise money to pay for government programs?
• 7:13
  Speaker 2: And I think from what we know about capital gains taxes,
• 7:17
  Speaker 2: they are not a very good way of raising tax
• 7:20
  Speaker 2: for the government. That's probably the chief argument. That's why
• 7:24
  Speaker 2: I think Antonia Watson, if I'm interpreting her sort of
• 7:28
  Speaker 2: I wouldn't say they were throwaway comments either. But I
• 7:30
  Speaker 2: think she was just talking about it from a point
• 7:32
  Speaker 2: of view of fairness, that if people are making these
• 7:35
  Speaker 2: massive capital gains and someone else is working really hard
• 7:38
  Speaker 2: and getting taxed up the ying yang for their hard work.
• 7:41
  Speaker 2: It was a bit like that. But here's the other
• 7:43
  Speaker 2: complicated factor, which is why I think it's difficult to
• 7:46
  Speaker 2: have an honest discussion about this is even in the
• 7:49
  Speaker 2: report I read, it talked about that capital gains or
• 7:53
  Speaker 2: a wealth tax, they are completely different things. Capital gains
• 7:58
  Speaker 2: tax philosophically, I think you can argue for in a
• 8:01
  Speaker 2: lot more convincing way rather than a wealth tax, which
• 8:04
  Speaker 2: is just an envy tax. And I don't have a
• 8:07
  Speaker 2: lot of money, but I don't want a wealth tax
• 8:09
  Speaker 2: because I just think it's why it's nonsense.
• 8:14
  Speaker 4: Yeah, well, the interesting thing, and we'll talk specifically about
• 8:16
  Speaker 4: the capital gains tax for a second, digging into the
• 8:19
  Speaker 4: fairness age.
• 8:19
  Speaker 2: One confuses the other. People conflate them. They think they're
• 8:22
  Speaker 2: the same.
• 8:22
  Speaker 4: Yeah, people often do so, for example, just to define
• 8:25
  Speaker 4: the difference. A capital gains tax you often pay at
• 8:28
  Speaker 4: the end. So you buy a house, it goes up
• 8:30
  Speaker 4: in value, or you buy a share, it goes up
• 8:32
  Speaker 4: in value, you sell it, then you pay the tax.
• 8:34
  Speaker 4: With a wealth tax, Well you've got a million dollar
• 8:37
  Speaker 4: house and you're paying ten thousand dollars a year one
• 8:40
  Speaker 4: percent of the value just by owning that property, not
• 8:44
  Speaker 4: when you sell it, just for owning it. And so
• 8:47
  Speaker 4: that really starts to become quite difficult because then if
• 8:50
  Speaker 4: you're somebody who and if we look at the Green
• 8:53
  Speaker 4: Party's policy what they proposed at the last election, you
• 8:56
  Speaker 4: could have maybe a holiday home and it's mortgage free
• 9:00
  Speaker 4: and it's worth a million dollars or you'd be paying
• 9:03
  Speaker 4: that you know, might be somewhere I think from memory
• 9:06
  Speaker 4: the policy was somewhere between ten thousand and up to
• 9:09
  Speaker 4: up to two and a half twenty five thousand dollars
• 9:12
  Speaker 4: a year just for the pleasure of owning that property.
• 9:16
  Speaker 2: Here's the other complication. For Look, I'm arguing in your court.
• 9:18
  Speaker 2: All of a sudden, I've said it doesn't offend me.
• 9:20
  Speaker 4: Well, I'm going to start arguing again for a second.
• 9:23
  Speaker 2: Let's switch. Here's the other one is that the government
• 9:29
  Speaker 2: adjusted our tax brackets for inflation, which was long overdue.
• 9:34
  Speaker 2: So for those of you who are trying to vaguely
• 9:37
  Speaker 2: remember the reason for adjusting the tax brackets and don't
• 9:40
  Speaker 2: forget about, you know, tax backs for landlords and all
• 9:42
  Speaker 2: that nonsense, they adjusted the tax brackets because as inflation
• 9:47
  Speaker 2: hits and you get paid more and more, you end
• 9:50
  Speaker 2: up in the higher tax bracket even though you're no
• 9:52
  Speaker 2: better off, so you're paying a larger proportion of your income.
• 9:55
  Speaker 2: And so the government changed the income tax brackets to
• 9:57
  Speaker 2: make it fair. So it's not here's the thing. Here's
• 10:01
  Speaker 2: the thing. So it's not a tax on inflation. That's
• 10:05
  Speaker 2: the problem with a capital gains tax as well, because
• 10:07
  Speaker 2: if a value of something such as property goes up
• 10:10
  Speaker 2: simply because of inflation, that is a nonsense tax because
• 10:14
  Speaker 2: and that's the problem. How do you take into account inflation?
• 10:17
  Speaker 2: Can you? Well, it's any country do it? I don't know.
• 10:19
  Speaker 4: I reckon that if you're going to introduce a capital
• 10:21
  Speaker 4: gains tax, you've got to take You've got to take
• 10:23
  Speaker 4: the GST approach. So GST we never have an argument
• 10:27
  Speaker 4: about because it is broad based and it applies to
• 10:29
  Speaker 4: absolutely everything. So if we dig into the CEO of
• 10:32
  Speaker 4: a in Z's Antonio Watson's arguments, if we're thinking about fairness,
• 10:37
  Speaker 4: we've got to tax everything, not just investment properties. We're
• 10:40
  Speaker 4: going to tax businesses. We've got to tax shares, yes,
• 10:42
  Speaker 4: and I actually think you've got to tax the own
• 10:44
  Speaker 4: home as well. You've got to make it so it
• 10:46
  Speaker 4: is completely broad based. And here's something very controversial you
• 10:50
  Speaker 4: talked about previously that the reason that capital gains taxes
• 10:54
  Speaker 4: is sometimes not that palatable is they don't tend to
• 10:57
  Speaker 4: raise a lot of revenue. The reason is because generally
• 11:01
  Speaker 4: when they are brought in that they are only forward looking.
• 11:04
  Speaker 4: So you buy a house today and when you eventually
• 11:06
  Speaker 4: sell it in seven years, you've made a capital gain.
• 11:09
  Speaker 4: The government taxes you then for a capital gains tax.
• 11:12
  Speaker 4: If you were to implement it, for it to be effective,
• 11:14
  Speaker 4: I think you've got to make it retrospective. So even
• 11:17
  Speaker 4: though you bought your house in nineteen eighty and it
• 11:20
  Speaker 4: was an investment property, if you sell it next year,
• 11:22
  Speaker 4: you get pay tax.
• 11:23
  Speaker 2: Oh no, you can't be retroactive. You can't be retrospective
• 11:26
  Speaker 2: with taxes.
• 11:27
  Speaker 4: Well, I don't think. I don't think that it would
• 11:29
  Speaker 4: ever get past the voters. But for it to be effective,
• 11:33
  Speaker 4: for it to be sustainable, you've got to make it retrospective.
• 11:37
  Speaker 4: And i'll tell you the reason why, because the government
• 11:39
  Speaker 4: has to start getting revenue straight away so that the
• 11:43
  Speaker 4: next government doesn't come in and say, right, we're going
• 11:45
  Speaker 4: to get rid of that.
• 11:46
  Speaker 2: Well, let's be honest, that's that would never happen anywhere.
• 11:49
  Speaker 2: You can never have a retrospective tax because you could
• 11:51
  Speaker 2: say to someone who bought their house for you know,
• 11:53
  Speaker 2: fifteen thousand dollars fifty years ago, that all of a
• 11:55
  Speaker 2: sudden they're up for now that I don't think that
• 11:58
  Speaker 2: would ever wear. But I do think, as I do
• 12:00
  Speaker 2: think that you can have simple things like that in
• 12:02
  Speaker 2: the fat in the family home or your house of
• 12:04
  Speaker 2: residents primary residents in Australia. I mean, it's easy you
• 12:08
  Speaker 2: exempt it because is it your primary residence. I can
• 12:11
  Speaker 2: argue against myself again. This by the way, Ed and
• 12:14
  Speaker 2: I are going to talk until the cows come home.
• 12:15
  Speaker 2: I forgot to say. I probably said at the start
• 12:17
  Speaker 2: of the show. Can call on I eight hundred and
• 12:19
  Speaker 2: eighty ten eighty. But you can join the conversation anytime
• 12:21
  Speaker 2: you want by picking up the phone and getting on
• 12:23
  Speaker 2: the blower. I eight one hundred and eighty ten and eighty.
• 12:25
  Speaker 2: Here's the other I'm going to argue against myself again.
• 12:28
  Speaker 4: Switch tib have I got now?
• 12:30
  Speaker 2: I know, but because but the reason we can do
• 12:32
  Speaker 2: this is because it's such a divert. It's such a
• 12:35
  Speaker 2: it's such a nuanced topic. And this is where politics
• 12:38
  Speaker 2: sometimes doesn't do us any favor because it deals like
• 12:40
  Speaker 2: it argues in sleechhammers sometimes. But here's one side. Remember
• 12:44
  Speaker 2: the cat. Remember how labor adjusted the bright line test
• 12:47
  Speaker 2: out to ten years, effectively making it a capital gains
• 12:51
  Speaker 2: tax on property for anyone who's sold within a ten
• 12:53
  Speaker 2: year period. Correct, Well, there are a lot of young
• 12:56
  Speaker 2: people who can't who live maybe let's pretend they live
• 12:59
  Speaker 2: in Auckland who can't afford to buy and get on
• 13:03
  Speaker 2: the property market in Auckland. If they could, they could
• 13:06
  Speaker 2: buy a family their own home and it wouldn't be
• 13:09
  Speaker 2: subject to the bright line test. But of course, because
• 13:12
  Speaker 2: they can't afford to their way of getting on the
• 13:14
  Speaker 2: ladder is to buy in I don't know Gisbone or
• 13:18
  Speaker 2: Napierors anywhere christ Church. But of course, of course it's
• 13:23
  Speaker 2: their only house, but it's not their primary residence. They
• 13:26
  Speaker 2: sell it to try and get on the ladder and
• 13:27
  Speaker 2: get ahead. And what happens, Whamo you hit them with
• 13:30
  Speaker 2: a tax. So that's why it is complicated, isn't it.
• 13:33
  Speaker 6: Yeah?
• 13:33
  Speaker 4: And I think one of the big issues that you
• 13:35
  Speaker 4: have with tax generally is you create unexpected consequences and
• 13:40
  Speaker 4: changes in people's behavior. So again, if it comes back
• 13:43
  Speaker 4: to how do you introduce a capital gains tax in
• 13:45
  Speaker 4: the right way, there should be no limit to what
• 13:47
  Speaker 4: it is. You know, if I was put in charge
• 13:49
  Speaker 4: as an economist of implementing implementing a capital gains tax,
• 13:53
  Speaker 4: there would be no limit to or how long you
• 13:56
  Speaker 4: have to own it so that you don't have to
• 13:59
  Speaker 4: pay tax. It would no matter how long you own it,
• 14:01
  Speaker 4: whether it's ten, twenty, thirty, fifty years, you're still paying
• 14:05
  Speaker 4: it once you end up selling it. Because what was
• 14:07
  Speaker 4: really interesting is when we look at the changes to
• 14:11
  Speaker 4: the bright line test, as it got lengthened and lengthened,
• 14:14
  Speaker 4: we actually saw the housing stock decrease. So even as
• 14:18
  Speaker 4: we saw New Zealand's population increasing, Well, if you bring
• 14:22
  Speaker 4: in a brightline test, people say, well, I have to
• 14:23
  Speaker 4: hold my house for ten years before I sell it now.
• 14:26
  Speaker 4: So the total number of listings ended up coming down
• 14:29
  Speaker 4: because people were saying, well, I have to hold onto
• 14:30
  Speaker 4: my house. I can't bring it on to market, and
• 14:33
  Speaker 4: so you see really unexpected behavior that you don't think about.
• 14:37
  Speaker 2: Actually, actually, just on that topic, I think that's one
• 14:40
  Speaker 2: of the reasons there's something to do with the thirty
• 14:42
  Speaker 2: year interest rates in the States. Totally unrelated, but that's
• 14:44
  Speaker 2: why there are certain disincentives to people selling and buying
• 14:47
  Speaker 2: another house, which is meant that stock in the United
• 14:49
  Speaker 2: States is not as doesn't turn over as much. But
• 14:52
  Speaker 2: that's a slightly different topic. Isn't it, And we weren't
• 14:55
  Speaker 2: going to go there because we're going to take a break.
• 14:56
  Speaker 2: Come back with your calls the CGT. How would it
• 15:01
  Speaker 2: work for you? And would it Actually here's the here's
• 15:04
  Speaker 2: a really simple question. It's a way it gets away
• 15:07
  Speaker 2: from the pros and cons, but we wanted to We're
• 15:10
  Speaker 2: going to continue hashing out the pros and cons. Would
• 15:13
  Speaker 2: it put you off getting into property? See? I don't
• 15:17
  Speaker 2: think it would, but I want your calls on eight
• 15:20
  Speaker 2: hundred eighty text twenty two past four News Talk said
• 15:24
  Speaker 2: B and welcome back to the show. This is one
• 15:45
  Speaker 2: roof radio show. Okay, well clock up a small win
• 15:48
  Speaker 2: for Tira that this is a home and a house
• 15:50
  Speaker 2: related song, but a kind of bit average. My guess
• 15:55
  Speaker 2: is Ed McKnight. This is the one roof radio show show.
• 15:59
  Speaker 2: Cgts want to put you off investing in property? Do
• 16:02
  Speaker 2: you care? And which way do you want to go
• 16:04
  Speaker 2: when it comes to that discussion which was initiated a
• 16:06
  Speaker 2: few days ago by Antonio Watson, the CEO of a
• 16:10
  Speaker 2: n Z. If you like acronyms, and let's keep going
• 16:13
  Speaker 2: all abbreviations, right, let's get onto the call show. We
• 16:15
  Speaker 2: Ed Mark Hello, Yeah, Hi.
• 16:19
  Speaker 6: Look, I've had property and I'm dead against property gains tax.
• 16:25
  Speaker 6: I want to just know, why don't put it over
• 16:28
  Speaker 6: every type of business. Every person that has a business
• 16:32
  Speaker 6: makes a profit. Why don't you just put it on everything?
• 16:36
  Speaker 2: Well, I think it would. I think it would be
• 16:39
  Speaker 2: But because this is the one REEF radio show, we're
• 16:41
  Speaker 2: just talking about it in the context of property.
• 16:44
  Speaker 6: Yesh, I realize that. But you're winy people up and saying, well,
• 16:48
  Speaker 6: you should have it on property, and you sent to
• 16:51
  Speaker 6: always want it on property because they make a profit.
• 16:54
  Speaker 6: Why didn't you put it on the banks. Why don't
• 16:56
  Speaker 6: you cut their profit down? Why aren't you doing that that?
• 17:01
  Speaker 2: Well, I think you're misconstruing me. Mark, I'm just putting
• 17:04
  Speaker 2: things in the context of property. I would say, yes,
• 17:05
  Speaker 2: if you have a CGT, you do put it on
• 17:07
  Speaker 2: other things and shares and all sorts of things and businesses.
• 17:10
  Speaker 2: Does that change your opinion of me?
• 17:12
  Speaker 6: No, because I'm thinking that you're cutting down the gains
• 17:16
  Speaker 6: that someone might have worked sixty or seven years and
• 17:20
  Speaker 6: building a property portfolio, and you're penalizing them. And it's
• 17:25
  Speaker 6: only in the near well in the past that everyone's
• 17:30
  Speaker 6: decided ay, property should be penalized.
• 17:33
  Speaker 2: Well, here's the argument why that's not logical, because if
• 17:37
  Speaker 2: you're just talking about people work hard for their money,
• 17:40
  Speaker 2: A lot of people work hard as all sorts of jobs,
• 17:43
  Speaker 2: and they pay tax their entire life on every cent
• 17:45
  Speaker 2: they ever earned. So the idea that that's not working
• 17:48
  Speaker 2: for me. But do you think Mark was kind of
• 17:50
  Speaker 2: misconstruing our context their ed.
• 17:52
  Speaker 4: I think what Mark's coming to is that deep sense
• 17:55
  Speaker 4: of fairness of that what is fear if we're going
• 17:58
  Speaker 4: to bring in a capital gains tax that people who
• 18:00
  Speaker 4: own shares and banks, as we pretty much all to
• 18:03
  Speaker 4: because we own it through our care we savers, that
• 18:06
  Speaker 4: everything should be tax even you know, I own a
• 18:09
  Speaker 4: business myself. If you build it up from zero dollars
• 18:12
  Speaker 4: to a million dollars and you sell your business for
• 18:14
  Speaker 4: a million dollars, you currently don't pay tax on it,
• 18:16
  Speaker 4: maybe there should be some tax paid there.
• 18:18
  Speaker 2: And I think that's what it would be. I'm not
• 18:21
  Speaker 2: arguing about it, and we're just focusing on the property.
• 18:23
  Speaker 4: Issue's and I understand that especially landlords like Mark, who
• 18:27
  Speaker 4: may have been building up that portfolio over twenty thirty,
• 18:30
  Speaker 4: forty fifty years, you do feel a bit targeted because
• 18:33
  Speaker 4: often when we're talking about capital gains tax people are
• 18:36
  Speaker 4: specifically talking about property investors, but really it should be
• 18:40
  Speaker 4: applied to everything.
• 18:41
  Speaker 2: Okay, right, let's take some more calls down high. How
• 18:45
  Speaker 2: are you good? Thanks?
• 18:47
  Speaker 1: Real simple question to answer the question is why the
• 18:51
  Speaker 1: hell would you want to have more taxation? Been professional
• 18:57
  Speaker 1: for thirty years, I've seenrous clients that are mid range
• 19:04
  Speaker 1: and right now the struggling. For example, an average mortgage
• 19:08
  Speaker 1: half a mel fifteen years to go, you're talking about
• 19:13
  Speaker 1: forty eight hundred dollars a month. You're talking about rates
• 19:16
  Speaker 1: on top of that, insurance on top of that, and
• 19:19
  Speaker 1: there's sixty percent of income going to it. Right, So
• 19:23
  Speaker 1: why on earth are you trying to text a man
• 19:26
  Speaker 1: out of existence when they retire? And let's look at
• 19:30
  Speaker 1: those and near toiment or in retirement. You know, at
• 19:34
  Speaker 1: the end of the day, we don't need any more text.
• 19:37
  Speaker 1: What we need to do is use it more effectively.
• 19:40
  Speaker 1: And if you think it's such a great idea, you
• 19:42
  Speaker 1: bloody pay it, and anyone else who agrees with you,
• 19:46
  Speaker 1: they can bloody pay it and leave the middle key
• 19:49
  Speaker 1: week alone.
• 19:52
  Speaker 2: End of Okay, good on your Dan I'm not sure
• 19:56
  Speaker 2: I'm the legislator on this one, but good on you
• 19:58
  Speaker 2: for the hostility.
• 20:00
  Speaker 4: I kind of like what Dad was saying. It was
• 20:02
  Speaker 4: both We kind of introed this show with that. You know,
• 20:06
  Speaker 4: is the government very good or doing currently doing a
• 20:10
  Speaker 4: very good job at spending our money as it is
• 20:12
  Speaker 4: a lot of people would probably say no, which I
• 20:14
  Speaker 4: think was Dan's point as well. And when Dan was
• 20:17
  Speaker 4: sharing his story there, it actually made me think of
• 20:19
  Speaker 4: something I heard from Rodney Height, who used to be
• 20:21
  Speaker 4: the leader of the act Party, and somebody once said
• 20:25
  Speaker 4: to him, Rodney, why is it that you are the
• 20:27
  Speaker 4: happiest man in Parliament? Way, always so happy? And he said,
• 20:31
  Speaker 4: because I came into Parliament thinking that government wasn't very
• 20:33
  Speaker 4: good at getting things done, and so as I was
• 20:36
  Speaker 4: going throughout my career, I saw that happening and that's
• 20:38
  Speaker 4: what I was expected. Whereas some people come into parliament
• 20:41
  Speaker 4: thinking they can change the world, and then they realized
• 20:43
  Speaker 4: that the government is not always good at getting things done,
• 20:46
  Speaker 4: and so they get their dreams and hopes slashed by that.
• 20:49
  Speaker 4: And I think it comes back to Dan's point, which
• 20:51
  Speaker 4: is the government very good at spending the money they've
• 20:53
  Speaker 4: already got Do we really want to give them anymore?
• 20:56
  Speaker 2: Yeah? Yeah, I mean I think yeah, it's just when
• 20:59
  Speaker 2: people say my hard you know, I'm investing my money,
• 21:02
  Speaker 2: it's really hard work. It's like that doesn't in an
• 21:05
  Speaker 2: argument that impresses me, because everyone works hard for their money.
• 21:08
  Speaker 2: You know, the idea that somehow the property, if you're
• 21:12
  Speaker 2: investing in property, you shouldn't be taxed on that. I mean,
• 21:15
  Speaker 2: I think that's when you start to lose the argument.
• 21:17
  Speaker 2: I think the argument is one when you say it's
• 21:19
  Speaker 2: hard to implement and it's hard to work it out
• 21:22
  Speaker 2: in a fair way where people will feel you know
• 21:23
  Speaker 2: what I mean. I think the argument that, like, you know,
• 21:27
  Speaker 2: I've invested in my property portfolio for years, it's hard work.
• 21:30
  Speaker 2: It's like crime a river baby. I mean, I know people.
• 21:33
  Speaker 2: I see people who turn up and their job is
• 21:34
  Speaker 2: working through the night cleaning commercial buildings, and they might
• 21:38
  Speaker 2: do that for years. They get taxed on every penny.
• 21:41
  Speaker 2: So the SOB story is not the strongest argument.
• 21:44
  Speaker 7: Yeah.
• 21:44
  Speaker 4: I understand your point around saying everybody works hard for
• 21:47
  Speaker 4: their money, including you know, like shift workers and some
• 21:49
  Speaker 4: of those examples you gave. I think where the likes
• 21:52
  Speaker 4: of Mark and Dan are coming from are saying yeah,
• 21:55
  Speaker 4: but US property investors often get singled out when we're
• 21:58
  Speaker 4: talking about capitals gained Texas. We are often specifically talking
• 22:03
  Speaker 4: about property in vistas. And actually, if you bring it
• 22:05
  Speaker 4: in it should cover everybody, not just in vesta.
• 22:09
  Speaker 2: Here's the funny thing about it, which and we've got
• 22:11
  Speaker 2: to get onto more course, because they are lining up. Technically,
• 22:17
  Speaker 2: if you buy property from a legal point of view,
• 22:20
  Speaker 2: if your goal is the capital gains and that is
• 22:24
  Speaker 2: the reason you have bought it, you actually do have
• 22:27
  Speaker 2: to pay. But the reason you don't is because it's
• 22:30
  Speaker 2: not so straightforward to prove. That's why they introduced the
• 22:32
  Speaker 2: bright line. But if you buy anything and the intention
• 22:36
  Speaker 2: is capital gain and the inland revenue can prove it,
• 22:40
  Speaker 2: guess what, folks, You're liable for capital gains. But it
• 22:43
  Speaker 2: just doesn't happen. And I think Antonia was reflecting the thing.
• 22:46
  Speaker 2: It's like, well, the yields are so terrible. Of course
• 22:48
  Speaker 2: you buy it for capital gain. And that is factually true,
• 22:52
  Speaker 2: isn't it that legal? If you buy an asset for
• 22:54
  Speaker 2: the capital gain, doesn't matter how long you intend to
• 22:56
  Speaker 2: keep it, you should pay tax on it.
• 22:58
  Speaker 4: Yeah, that is correct. It's just not often implemented that
• 23:01
  Speaker 4: way because it's extraordinarily hard to prove. And actually, just
• 23:03
  Speaker 4: before we get into the calls, it's interesting that you
• 23:05
  Speaker 4: were saying that one of the reasons that Antonio was
• 23:09
  Speaker 4: bringing it up on Radio New Zealand was that she
• 23:12
  Speaker 4: did inherit it a home. Well, the really interesting thing
• 23:15
  Speaker 4: about that is that under the brightline rules, inherited homes
• 23:18
  Speaker 4: don't aren't caught by the bright line as it is.
• 23:21
  Speaker 2: Yeah, there we go eight eighty By the way, you know,
• 23:26
  Speaker 2: let's not get too worked up in the emotion front.
• 23:28
  Speaker 2: This is just a what if conversation. And I think
• 23:31
  Speaker 2: the interesting question is also would it put you off
• 23:34
  Speaker 2: property either way? And it wouldn't put me off I
• 23:37
  Speaker 2: got it anyway. But I've been thinking about it for
• 23:39
  Speaker 2: a long time. Pete Hello, Yes, yes, okay.
• 23:46
  Speaker 8: I reckon. What should happen is personally is that when
• 23:52
  Speaker 8: the government was in before, when it was had it
• 23:55
  Speaker 8: is you buy properly. You've got to kick them from
• 23:57
  Speaker 8: ten years. And I asked that, yes, you got to
• 23:59
  Speaker 8: play text once he got ten years that where it
• 24:01
  Speaker 8: keeps the keeps the stock of the rental supply stable
• 24:07
  Speaker 8: and they make their money when they when they sell it,
• 24:10
  Speaker 8: which is fair enough, but I reckon the first home
• 24:11
  Speaker 8: should not be text. And we all know if you
• 24:15
  Speaker 8: if you flick your properties now, if you're a trade,
• 24:18
  Speaker 8: if you're a what a flipper? What he's going to
• 24:20
  Speaker 8: pull it to pay text? Anyway, I think it's gone
• 24:22
  Speaker 8: too much for the way of the Crystal axing. They're
• 24:28
  Speaker 8: all doing all those MPs, they're all doing it.
• 24:30
  Speaker 2: You're talking about the light, We're talking about the bright
• 24:32
  Speaker 2: line test, don't you rather than the Capital.
• 24:34
  Speaker 5: Games Capital games?
• 24:36
  Speaker 8: But I reckon bring it in, but it's got to
• 24:37
  Speaker 8: be not from the first ten years, so you basically
• 24:40
  Speaker 8: hold the stock the people not flicking them, and that
• 24:43
  Speaker 8: way they get head after ten years. So you say
• 24:45
  Speaker 8: you keep the supply of properties on a wold. So
• 24:49
  Speaker 8: there's a lot of people now they see it because
• 24:51
  Speaker 8: Crystal acts. I shouldn't say it's a rich prick's great
• 24:53
  Speaker 8: good game.
• 24:53
  Speaker 2: It is.
• 24:54
  Speaker 8: You can't deny that that's what he's in there for
• 24:56
  Speaker 8: and he doesn't want to pay text. And that's what
• 24:59
  Speaker 8: they do it bring it back and keep it for
• 25:01
  Speaker 8: ten years, sell it in ten years you pay text.
• 25:04
  Speaker 2: Well, actually funny enough, the brightline test inhibits the market,
• 25:08
  Speaker 2: which restricts supply, which pushes prices up a bit, doesn't it.
• 25:11
  Speaker 2: So you better to actually just be able to free
• 25:14
  Speaker 2: free to buy and sell regardless whenever, shouldn't you?
• 25:16
  Speaker 9: Ed?
• 25:16
  Speaker 2: What do you think? Any comments?
• 25:18
  Speaker 4: Yeah, my view for that, Pete would be, you actually
• 25:20
  Speaker 4: don't want to have a certain number of years that
• 25:23
  Speaker 4: you've got to hold it and then you can sell
• 25:24
  Speaker 4: it without tax anyway. And I'll see the reason why.
• 25:27
  Speaker 4: Let's say that I was an investor, at which I am,
• 25:30
  Speaker 4: and then I buy a property, I hold it for
• 25:31
  Speaker 4: five years. That property no longer suits me for whatever
• 25:35
  Speaker 4: reason in terms of my investment strategy. But then I go, well,
• 25:38
  Speaker 4: I can't sell it because if I sell it now,
• 25:41
  Speaker 4: I've got to pay a whole heap of tax. So
• 25:44
  Speaker 4: I better just keep holding on to that property rather
• 25:47
  Speaker 4: than releasing it to the market. I better I hold
• 25:49
  Speaker 4: it for another five years so that I can get
• 25:52
  Speaker 4: outside of that window. And that's where again the trouble
• 25:55
  Speaker 4: with taxes is it changes our behavior. What you really
• 25:59
  Speaker 4: want is if an investor or a first home by
• 26:02
  Speaker 4: owns a property and now all of a sudden it
• 26:04
  Speaker 4: doesn't really fit with their strategy. You want them to
• 26:07
  Speaker 4: release it onto the market because then somebody else can
• 26:09
  Speaker 4: buy it.
• 26:10
  Speaker 2: Yeah, because it does have this artificial restriction of the
• 26:12
  Speaker 2: supply where you introduced a time limit for exemptions or otherwise. Yeah,
• 26:17
  Speaker 2: it's funny. It's almost like you'd argue for CGT is
• 26:19
  Speaker 2: better than a bright line in terms of just supply
• 26:23
  Speaker 2: and demand.
• 26:23
  Speaker 4: I add, that's what I would argue. That's why I
• 26:25
  Speaker 4: think it's going to be across everything with no number
• 26:28
  Speaker 4: of years.
• 26:29
  Speaker 2: Excellent, There we go. Don't. By the way, Ed doesn't
• 26:32
  Speaker 2: love the CGT. Just in case that sounded like a
• 26:34
  Speaker 2: brief confession. It's just a preference ahead of the brightline test.
• 26:37
  Speaker 2: Thank you Pete for your call. Really appreciate it. Let's
• 26:39
  Speaker 2: carry on.
• 26:40
  Speaker 5: Richard High Hello, Tim, Hello, Hi, hello Tim. To be
• 26:48
  Speaker 5: quite frank, a capital gains I remember many many many
• 26:51
  Speaker 5: years ago when Holy was there, it's a capital gains
• 26:55
  Speaker 5: tax was talked about that it's a political upper suicide,
• 27:00
  Speaker 5: and wholly mentioned that it's political suicide. And to be
• 27:04
  Speaker 5: quite frank, for the chief executive or whatever they had
• 27:07
  Speaker 5: said on an enormous salary that she is on, it's
• 27:11
  Speaker 5: a bloody check of her to talk about capital gains taxes?
• 27:14
  Speaker 5: What is and to be quite frank, To be quite frank,
• 27:17
  Speaker 5: I'll be quite to the point that woman needs to
• 27:20
  Speaker 5: be psychologically examined.
• 27:22
  Speaker 2: Subject up, well, hang on, hold on, hold by note, Richard,
• 27:25
  Speaker 2: can I just mildly challenger on something. How have other
• 27:28
  Speaker 2: countries managed to bring in a How come it's such
• 27:31
  Speaker 2: a hot potato here? As because of our because other
• 27:35
  Speaker 2: countries have got cgts, lots of them.
• 27:38
  Speaker 5: We're talking about here. Other countries have got a capital
• 27:41
  Speaker 5: gains tax. True, a number of countries have got capital
• 27:44
  Speaker 5: gains tax, but we're talking about New Zealand here. And
• 27:47
  Speaker 5: to be quite frank, if you're going to raise taxes,
• 27:49
  Speaker 5: drop the sorry, dropped the what's it called it? The
• 27:53
  Speaker 5: pa ye to a threshold and increase the GST. That's
• 27:57
  Speaker 5: the best way, and that's the best way over all
• 27:59
  Speaker 5: to do it. Capital gains tax is an absolute satan
• 28:04
  Speaker 5: in disguise, Richard.
• 28:08
  Speaker 2: It makes amazing how Australia managed to implement a capital
• 28:11
  Speaker 2: gains tax.
• 28:12
  Speaker 4: Then, well, it's quite funny because I was actually out
• 28:14
  Speaker 4: for lunch with one of my colleagues and he argues, oh,
• 28:16
  Speaker 4: we should have a capital gain tax because I want
• 28:18
  Speaker 4: my income tax rate to go down. That happened, and
• 28:20
  Speaker 4: Australia's got one. I said, yeah, but you can't go
• 28:23
  Speaker 4: over and look at Australia and say, well, they've got one.
• 28:26
  Speaker 4: So it's inevitable that we are going to have one
• 28:28
  Speaker 4: in New Zealand because they introduced their capital gains tax
• 28:30
  Speaker 4: I believe in nineteen eighty five. That would be thirty
• 28:33
  Speaker 4: nine years ago, and we still haven't got one there
• 28:36
  Speaker 4: and yet to Richard's point there about if you were
• 28:39
  Speaker 4: to bring one and then you probably should decrease income
• 28:43
  Speaker 4: taxes as well, I would agree with that, but I
• 28:46
  Speaker 4: just don't trust any political party enough that if they
• 28:48
  Speaker 4: make that tax switch, eventually they're going to increase income taxes.
• 28:51
  Speaker 2: Anyway. I do love people's passionate about it, Richard's I've
• 28:55
  Speaker 2: spoken Richard on a few occasions, lovely man, and it's
• 28:58
  Speaker 2: the most impassioned i've heard. Definitely love your work, Richard, fantastic.
• 29:02
  Speaker 2: We'll be back in just a moment. Is twenty two
• 29:04
  Speaker 2: minutes to five news talk zby welcome back. This is
• 29:20
  Speaker 2: the week in collective. I'mton Beverage. This is the one
• 29:23
  Speaker 2: roof of radio show I guess is Ed McKnight of
• 29:26
  Speaker 2: OPA's partners. You can check them out. O p op
• 29:28
  Speaker 2: e s. What's the website again.
• 29:30
  Speaker 4: Ed op ees partners dot COZ.
• 29:33
  Speaker 2: I just should have just carried on talking and editor
• 29:34
  Speaker 2: dot cod and Z. We've got truckloads of course coming
• 29:37
  Speaker 2: and let's keep it going. Rod.
• 29:38
  Speaker 9: Hello, Hi Tim, I really can't understand why people are
• 29:44
  Speaker 9: ignoring the elephant in the room. In Sofara's property transactions
• 29:48
  Speaker 9: are concerned. Uh huh many many years ago. Well not
• 29:54
  Speaker 9: that many, I suppose, But in nineteen seventy one when
• 29:57
  Speaker 9: I purchased my first home, I paid stamp duty. Now
• 30:01
  Speaker 9: stamp duty, the imposition of stamp duty on any property
• 30:05
  Speaker 9: transactions is a simple way of actually gathering revenue for
• 30:10
  Speaker 9: the government. It's on a percentage basis of the sale
• 30:14
  Speaker 9: price of the house, and it's paid by the purchaser. So,
• 30:18
  Speaker 9: in other words, of the house changes hands many many times,
• 30:21
  Speaker 9: each time it changes hands, is stamp duty payable on it?
• 30:25
  Speaker 9: And I really think that it. I mean, take, for example,
• 30:28
  Speaker 9: just as an example, five hundred thousand dollars house, a
• 30:34
  Speaker 9: zero point five percent stamp duty payable two and a
• 30:38
  Speaker 9: half thousand dollars straight into the government coffers, and to
• 30:43
  Speaker 9: me it just seems why haven't they reintroduced it. I
• 30:48
  Speaker 9: just can't understand it.
• 30:49
  Speaker 2: I think that actually, for me, I don't like the
• 30:54
  Speaker 2: idea of the purchase having to pay it, just because
• 30:58
  Speaker 2: it seems like a hurdle for the first time. But
• 31:00
  Speaker 2: what do you reckon? Heed?
• 31:01
  Speaker 4: Well, actually, I think Rods might have a point there.
• 31:04
  Speaker 4: It's quite interesting over in Melbourne, for instance, in Victoria
• 31:07
  Speaker 4: and Australia, they have stamp duty and they have variable
• 31:11
  Speaker 4: rates of stamp duty based on who the purchaser is.
• 31:14
  Speaker 4: So if you're an investor, you pay a higher stamp duty.
• 31:16
  Speaker 4: If you're an investor from overseas, you pay I'm going
• 31:20
  Speaker 4: to butcher the figure, but it was over ten percent
• 31:22
  Speaker 4: the last time I spoke to one of my counterparts
• 31:26
  Speaker 4: in Australia, so it can be quite hefty over there,
• 31:29
  Speaker 4: and I think Rod's right to say, well, maybe maybe
• 31:32
  Speaker 4: that should be part of the conversation. It's quite interesting
• 31:35
  Speaker 4: though that a lot of us would have an aversion
• 31:37
  Speaker 4: to that because we say, well, we don't want the
• 31:39
  Speaker 4: purchaser to have to pay it. It should be that
• 31:42
  Speaker 4: grubby investor who made all that money.
• 31:45
  Speaker 2: Now, I just think of it being put it on
• 31:47
  Speaker 2: the seller as a transaction tax, just because once you're
• 31:52
  Speaker 2: in it doesn't matter. When you're buying and selling, it
• 31:54
  Speaker 2: doesn't matter. But I just sort of think for that
• 31:55
  Speaker 2: first time by it feels like an impediment.
• 31:57
  Speaker 4: Well, you've got to remember, with any tax, the buyer
• 32:00
  Speaker 4: is eventually paying it. So even if we look at GST,
• 32:03
  Speaker 4: the seller pays it, but it has obviously passed on
• 32:06
  Speaker 4: to the buyer. And that would be the same with
• 32:08
  Speaker 4: any capital gains tax as well. Eventually that's going to
• 32:10
  Speaker 4: be passed on to the buyer.
• 32:12
  Speaker 2: Although if a house is worth a million dollars, it's
• 32:14
  Speaker 2: not suddenly worth more than a million plus stamp duty
• 32:17
  Speaker 2: because it's only willing worth what someone's prepared to pay
• 32:19
  Speaker 2: for it, you know, and people think of the seller
• 32:21
  Speaker 2: will just add that to the price. It's like, it
• 32:23
  Speaker 2: doesn't quite work like that. The market is the market, yeah.
• 32:25
  Speaker 4: But what you might also see is that people then
• 32:28
  Speaker 4: delay when they sell it. That can restrict supply. That
• 32:31
  Speaker 4: pushes house prices up. So it's impossible to just say
• 32:35
  Speaker 4: we're going to introduce a tax and only the seller
• 32:37
  Speaker 4: is going to bear the brunt of it. All taxes
• 32:40
  Speaker 4: are eventually passed on to the buyer.
• 32:42
  Speaker 2: Interesting question, anything to add Rod before we go.
• 32:44
  Speaker 7: Yeah.
• 32:45
  Speaker 9: The other thing is that it could be an incentive
• 32:47
  Speaker 9: for someone that's selling a house. If it is the
• 32:50
  Speaker 9: purchaser that's paying the stamp duty. A seller can say, hey, look,
• 32:55
  Speaker 9: I'm prepared to reduce the price of the house by
• 32:58
  Speaker 9: the amount of stamp duty. So in effect they are
• 33:00
  Speaker 9: paying it. The seller is paying it anyway, but they're
• 33:03
  Speaker 9: reducing the price for the purchaser. And there's also both
• 33:06
  Speaker 9: sort of connotations that come into it. And I really
• 33:09
  Speaker 9: think that it's a simple system. I mean, they've got
• 33:12
  Speaker 9: it in force in the UK they pay stemp duty,
• 33:16
  Speaker 9: the purchaser pays there. In Australia and I'm not sure
• 33:19
  Speaker 9: about the States they may do too, But that's a
• 33:23
  Speaker 9: simple system.
• 33:24
  Speaker 2: Yep. Thanks, right, it's interesting, I think, yeah, you know,
• 33:30
  Speaker 2: we're not going to bring one of those in either.
• 33:31
  Speaker 2: Let's be honest to good A.
• 33:35
  Speaker 5: How are you good?
• 33:36
  Speaker 2: Thanks?
• 33:37
  Speaker 3: I was just waiting for the same answer to give
• 33:39
  Speaker 3: about the stamp duty. I wanted government to introduce some
• 33:43
  Speaker 3: kind of stamp duties on the houses.
• 33:45
  Speaker 2: Yep, you like that idea, Yes, I do like it.
• 33:49
  Speaker 3: So that will be like godman will get some money
• 33:51
  Speaker 3: out of it, and government can make sure and ask
• 33:54
  Speaker 3: them where the money is going to use for like
• 33:56
  Speaker 3: to make new hospitals or new schools or something like that.
• 34:00
  Speaker 3: So if you can not that the money is going yeah.
• 34:02
  Speaker 2: Actually that is actually that The other thank you to.
• 34:05
  Speaker 2: The other argument for that is is a tax that
• 34:07
  Speaker 2: happens right now, yeah, instant.
• 34:09
  Speaker 4: If you get that tax revenue straight away, then it
• 34:12
  Speaker 4: becomes very politically unpalatable to then remove it because then
• 34:15
  Speaker 4: you've got to decrease some government programs. But it's interesting
• 34:19
  Speaker 4: that there are a number of countries, including Singapore, which
• 34:23
  Speaker 4: has stamp duty. What's interesting is Singapore has stamp duty
• 34:26
  Speaker 4: but does not have a capital gains tax. So maybe
• 34:29
  Speaker 4: you can have one without the other.
• 34:30
  Speaker 2: Okay, thanks for your call, Pinto and a high Yeah.
• 34:35
  Speaker 10: Hi not a fan of capital gains tax quite a
• 34:38
  Speaker 10: number of different reasons. First one of them is does
• 34:40
  Speaker 10: it improve our economic performance that I think you've touched
• 34:44
  Speaker 10: on a toll. Second one is that we've got a
• 34:47
  Speaker 10: housing shortage. Does it incentivize people to build and own houses?
• 34:51
  Speaker 10: The third one is that if you if you sell
• 34:53
  Speaker 10: a house which is worth a million bucks and you
• 34:57
  Speaker 10: pay capital gains taxes, let's they've worked hard, you paid
• 34:59
  Speaker 10: your mortgage, of you buy another house which is with
• 35:01
  Speaker 10: a million bucks and all of a sudden, hey pressed tho,
• 35:03
  Speaker 10: you've now got a mortgage, which seems pretty unfair. With
• 35:07
  Speaker 10: all you're doing is you're selling sense you like for like.
• 35:10
  Speaker 2: I think that's why, well, I think if that's why,
• 35:12
  Speaker 2: you wouldn't have it on your place principal place of residence,
• 35:15
  Speaker 2: which is an easy drafted exception.
• 35:17
  Speaker 10: Yeah, I would agree, and you've been back to the
• 35:19
  Speaker 10: Ford on that one. The other thing is that, I mean,
• 35:21
  Speaker 10: we encourage people to save for their retirement and because
• 35:24
  Speaker 10: we all know that pension is not exactly princely and
• 35:28
  Speaker 10: then you know, but if you start doing these kind
• 35:29
  Speaker 10: of things, you reduce certainty for people who've possibly been
• 35:33
  Speaker 10: doing this for a long long time, in decades and
• 35:36
  Speaker 10: you're just up in their retirement planning, which is it's
• 35:39
  Speaker 10: a dramatic effect on people. So if you just did
• 35:42
  Speaker 10: that at the spur of the drop of a hat,
• 35:43
  Speaker 10: that would have a really devastating effect a lot of people.
• 35:47
  Speaker 2: Good on you. Actually, I'll be honest. If I suddenly
• 35:49
  Speaker 2: was really into investing in property, I probably really load
• 35:52
  Speaker 2: the idea. That's personal interest.
• 35:54
  Speaker 4: Yeah, well I am and property, and obviously I don't
• 35:57
  Speaker 4: think it's the best idea.
• 36:00
  Speaker 2: Okay, good on you. Hey, look we need to take
• 36:03
  Speaker 2: a quick moment. We'll come back with one roof Property
• 36:05
  Speaker 2: of the week. We'll try and squeeze another call or two,
• 36:07
  Speaker 2: but if we can, but before we wrap up the hour.
• 36:09
  Speaker 2: But thank you so much for your feedback everything so far,
• 36:12
  Speaker 2: and we'll be back in just to take us eleven
• 36:13
  Speaker 2: minutes to five news talks b.
• 36:19
  Speaker 9: Then some eleven roots left just then.
• 36:30
  Speaker 2: And welcome back to the One Roof radio show. I'm
• 36:32
  Speaker 2: turn Beverage. My guest is Ed McKnight. It is eight
• 36:35
  Speaker 2: minutes to five. The one roof property of the week
• 36:40
  Speaker 2: on the weekend Collective. Yes, the one roof property of
• 36:43
  Speaker 2: the week. It's I'll tell you what you're getting a
• 36:44
  Speaker 2: lot for your money on this one. By the way,
• 36:46
  Speaker 2: just go to the one roof site and look for
• 36:48
  Speaker 2: one nine six Tinui that's t I n Ui Valley
• 36:53
  Speaker 2: road masterton the I'll give you the price in just
• 36:56
  Speaker 2: a second. I'll describe a few things about it. The
• 36:59
  Speaker 2: blue sort of. It's a stunning estate, seamlessly blending the
• 37:02
  Speaker 2: charm of a small farm with the comforts of an
• 37:05
  Speaker 2: expansive lifestyle retreat, nestled in the tranquil and pure picturesque
• 37:11
  Speaker 2: to Nui Valley. It's just thirty five minutes from Masterton.
• 37:14
  Speaker 2: Four bedrooms on a nineteen point eight eight hectare site.
• 37:20
  Speaker 2: It's a big property and guess what you reckon you're
• 37:23
  Speaker 2: going to be paying for it. I've had a look
• 37:24
  Speaker 2: around it. It's a pretty modern looking house, quite large,
• 37:28
  Speaker 2: lots of bedrooms, plenty of living space. Expect to estimate
• 37:33
  Speaker 2: eight hundred thousand dollars, which ed quite a lot of
• 37:37
  Speaker 2: bang for your buck if you want to be in
• 37:38
  Speaker 2: that neck of the woods.
• 37:39
  Speaker 4: Huge property. You got to remember that the average sale
• 37:42
  Speaker 4: price for a property in Marsterton starts with a three
• 37:45
  Speaker 4: in front of it, three hundred and sixty five thousand dollars.
• 37:48
  Speaker 4: I think this is a good reminder actually that houses
• 37:50
  Speaker 4: are actually not expensive everywhere in New Zealand. There are
• 37:54
  Speaker 4: pockets of New Zealand where you can still pick up
• 37:56
  Speaker 4: a lot of house relatively cheaply.
• 37:58
  Speaker 2: Yeah, that you would definitely be here your country Lord
• 38:02
  Speaker 2: and lady. Wouldn't you being in that one? But yeah, twenty.
• 38:05
  Speaker 4: Hectares, I wouldn't want it too much worked for me.
• 38:10
  Speaker 2: You'd have to have a ride on Moa, I think probably,
• 38:12
  Speaker 2: but yeah, go and check it out. It's a very
• 38:16
  Speaker 2: attractive looking property. Lovely tree lined driveway that I'm looking
• 38:19
  Speaker 2: for here. There's a quite a comprehensive set of photos there,
• 38:23
  Speaker 2: but the size of the property. In fact, I love
• 38:25
  Speaker 2: it for its driveway. I love a good tree lined driveway.
• 38:27
  Speaker 2: Do you like a tree lined driveway?
• 38:28
  Speaker 3: Ed?
• 38:29
  Speaker 4: If I could afford it term, i'd have one myself.
• 38:32
  Speaker 2: I love it tree line driveway. Depending where you want it,
• 38:36
  Speaker 2: of course, if you want nineteen point eight eight hectares
• 38:38
  Speaker 2: in Auckland, it'd be worth a couple hundred million anyway,
• 38:42
  Speaker 2: but eight hundred thousand. Go and check it out on
• 38:45
  Speaker 2: the one roof site. Let's see if we can squeeze
• 38:47
  Speaker 2: the very quickly on the CGT one more call Alan,
• 38:50
  Speaker 2: it's you here.
• 38:52
  Speaker 5: Hi.
• 38:53
  Speaker 7: I lived in Australia for a while and they have
• 38:56
  Speaker 7: a comprehensive capital gains text and basically this is how
• 39:01
  Speaker 7: it works. The family home is exempt the house you
• 39:05
  Speaker 7: live in is exempt. You don't ever pay any tax
• 39:08
  Speaker 7: on that. Now, the other thing is they have a
• 39:10
  Speaker 7: starting date. They nominate a starting date, and that starting
• 39:14
  Speaker 7: date is reviewed every now and then every few years
• 39:18
  Speaker 7: they change the date. Now, the other thing, you're allowed
• 39:23
  Speaker 7: Every year, you're allowed whatever the rate of inflation is
• 39:27
  Speaker 7: the cost of living business, So every year you are
• 39:31
  Speaker 7: allowed that. Now, all it does really over there is
• 39:35
  Speaker 7: catch people that are buying and selling all the time
• 39:39
  Speaker 7: as the principal means of making a living.
• 39:42
  Speaker 2: Well, if you're buying and selling all the time, you're
• 39:44
  Speaker 2: going to get pained anyway. Do you like it? Do
• 39:46
  Speaker 2: you like the tax owing or not?
• 39:48
  Speaker 11: Well, the way it works over there, hardly anybody pays it.
• 39:53
  Speaker 11: People that are buying and selling shares are the main
• 39:58
  Speaker 11: people that get caught. You've got to keep very strict
• 40:01
  Speaker 11: records if you're in the share market.
• 40:03
  Speaker 7: And you're buying and selling shares. But it has very
• 40:06
  Speaker 7: little effect on the real estate market. And as for
• 40:10
  Speaker 7: people landlords you know that have two or three houses,
• 40:14
  Speaker 7: that sort of thing, well, they as long as they
• 40:17
  Speaker 7: sit on those houses for years and years and years,
• 40:20
  Speaker 7: they don't pay any They don't pay any capital gains tax.
• 40:24
  Speaker 7: It's only paid when you sell.
• 40:26
  Speaker 2: Yeah, okay, hey, look we're running a bit short of
• 40:29
  Speaker 2: time there, and any comment on that before we wrap
• 40:30
  Speaker 2: it up.
• 40:30
  Speaker 4: Ed, Yeah, it's really interesting my fiance Angela, who's probably
• 40:34
  Speaker 4: listening to the show as a financial advisor. And one
• 40:38
  Speaker 4: thing if you're thinking about taxing shares that you've got
• 40:40
  Speaker 4: to be really careful about is when you are rebalancing
• 40:43
  Speaker 4: your portfolio. So often what will happen if you're investing
• 40:46
  Speaker 4: in shares is you might have bought some shares they've
• 40:48
  Speaker 4: gone up in value. So then you say, hey, I
• 40:50
  Speaker 4: need to sell some put some money in turn deposits.
• 40:52
  Speaker 4: You've just got to make sure that you're not captured
• 40:54
  Speaker 4: by those.
• 40:55
  Speaker 2: Indeed, God, that was a quick answer, because the time
• 40:57
  Speaker 2: is upon us. Ed, how quickly has that our gone
• 41:01
  Speaker 2: real farn rocketed? Look, I can sum it all up.
• 41:04
  Speaker 2: I would say as a cultural thing, New Zealander is
• 41:06
  Speaker 2: generally hated capital gains tax, or at least listeners to
• 41:09
  Speaker 2: this show and well that's where we can park it.
• 41:12
  Speaker 2: Ed McKnight from Op's Partners Ops Partners dot co in Ze,
• 41:15
  Speaker 2: thanks for your time. We'll be back with the parents
• 41:16
  Speaker 2: squad John Cowen is waiting on the wings back shortly