Unlike most economists, Banking experts and political analysts who for months before the CGT decision was made, pussy footed around with generalizations about how the new CGT will work. Property Investor Centre called it 100% correct again saying it won’t happen. I actually don’t know of anyone else who said the same thing ?
Sure enough Jacindarella burned CGT at the stake vowing to never go there again.
It’s easy being an expert on some topic or event AFTER it has happened, (just watch how the above ‘so called’ experts will now say they knew CGT would never eventuate) But to make the big calls beforehand about the property cycle, and how to invest in different markets, you need your finger on the pulse and experience of what is actually happening in the current property market.
In case you missed our last blog, this is what we said about CGT;
An even bigger talking point around NZ at the moment is Capital Gains Tax , not only with property investors, but with everyone and anyone who owns any type of property, whether it be a farm, business or property investment.
Unfortunately CGT is a punishment for anyone who has worked hard, saved hard and taken risks to get ahead in life. Some are calling it an “Envy Tax” from the poor for the rich.
Currently nothing has been decided but it appears if it does come in the family home will be exempt. And for the rest of us it will be a mountainous can of worms being opened up.
1) Who gets taxed what?
2) Are all land & property owners taxed the same rate?
3) Are just (Evil) residential property investors taxed 33%, and everyone else a lot less?
4) How do we measure the gain, will the valuation industry boom (at our expense)
In my own opinion I think the Government will realise CGT could backfire hugely for their own popularity and cost them at the next election.
I actually don’t think it will happen. (Watch this space)
So common sense prevails and good news for anyone who has strived to do well in life, worked hard, saved hard and taken calculated risks with investing in the residential property market.
As we have already stated, we are heading into a turbulent phase of the market. A phase where greed will turn to fear for most and many will disappear for several years. Of course there will be many golden opportunities arising but you will need the fortitude and focus to go against the grain and invest when the majority are running scared. Education & confidence will be key, and the ones who are organised will do very well.