Posts by Swan
Last ←Newer Page 1 2 3 4 5 Older→ First
-
Polity: House-buying patterns in Auckland, in reply to talkie_toaster,
One issue is the fact that you are comparing percentages of buyers with total population percentages. What is of more interest is the proportion of people in cohorts that are sorted with regard to their likelihood of house buying. Recent immigrants certainly fall into a category of people likely to buy houses. What is the proportion of migrants to Auckand that have Chinese sounding surnames?
Another issue is that, if their are foreign investors buying, they may be doing so with the intention of migrating sooner or later. It's impossible to sort this group from genuinely foreign investors.
Another other issue is it is a three month snapshot.
-
Polity: House-buying patterns in Auckland, in reply to Rae Sott,
If the market was functioning properly, an increase in demand would generate a supply response. And indeed it will even in Auckland although it is far from optimal given the current planning regime.
Certainly the idea of promoting owner occupiers being desirable in and of itself is popular, but what are the reasons? Remember that idea was one of the major causes of the GFC.
In any case, as I previously stated, in a completely supply constrained market, tipping the scales in favour of owner occupiers is a zero sum game coming at the expense of (on average poorer) renters.
-
Notwithstanding my comment above, this analysis does look highly speculative. The idea that we should be comparing the % of buyers to the total population is dubious. The latest surge in property prices in Auckland has correlated rather well, nlike it usually does with a boom of inward migration. The stats show that nearly 40% of immigrants are from Asia. A lot of those will be from China. So we can't draw much from the data.
-
If Labour are correct in their analysis, then this shows two things. One we are recieving foreign direct investment in an area where we have a shortage of investment - housing. That's pretty much an entirely good news story.
Two, the price response shows the supply side of the market is broken - that is the problem here.However, even if the supply curve was vertical, foreign buyers purchasing is good for renters. Being against investors is really the same as being against renters which is pretty regressive.
-
"There’s no way EQC will be able to get reinsurance for red zone land: it’s way too risky. Therefore no way private insurers will cover building houses."
It's perfectly possible for the red zone land to be engineered to be suitable for redevelopment. Would it be economic? I am guessing medium-high density development would be required to make the sums work. I would expect some redevelopment (if economic) given the location and to allow the government to recover some of its costs.
-
Surely ACT is homebrew. Tax free and the fruit of ones own labour!
-
That type of activity is more properly defined as labour income. And in NZ it would be taxed as income so it is not currently untaxed.
-
Hard News: Labour's Fiscal Plan:…, in reply to BenWilson,
Here is Scott Sumner on the issue explaining it no doubt much better than I am.
Cheers
-
"That doesn’t make sense. If you sell, realizing the gain, you won’t have a future income from the asset because you sold it."
The tax will still be paid. It is double taxation on the same income no matter who is paying it. Ultimately the end consumer will be paying in the long run. In the short run it depends on elastic irises.
"That also doesn’t make any sense. A person who buys a house worth a million one year and sells it the following year for 1.1 million without doing anything to it at all has not gained that 100k from any labour of any kind. They may not have even laboured to get the million in the first place, if they bought it all on tick, with an inheritance as the deposit."
Where did the inherited money come from?
However what you describing is getting closer to actual labour income. Trading is actually more like labour income. So there is a grey area where you labour income can be disguised as capital income which would be an issue.
-
"As in, why should income be treated differently depending on whether it comes from a home sale or business sale or a salary or a farm sale or dividends or wherever else?"
A few arguments spring to mind, though I am not an expert. The first is you either tax unrealised gains and risk bankrupting cash poor asset owners, or you only tax realised gains. If you only tax realised gains, then you are basically advantaging people who choose not to sell, and distort the market accordingly.
On the fairness argument: Capital values are essentially the NPV of future capital income. So if you get a capital gain, that means future income is expected to increase. That future income will be taxed when realised, so it is a form of double taxation.
A stronger and slightly different version of the above argument is that neither capital income or capital gains should be taxed as all capital income derives from savings of labour income. Labour income is taxed and therefore taxing the income generated via savings amounts to double taxation. This argument is best understood when savings are understood to be deferred consumption (which is what they are).