Discourage real estate as an investment and encourage home ownership for everyone

According to the Treasury in 2013, "the level of foreign ownership of New Zealand housing remains relatively low". I can't find any hard numbers on this though. Like @reidalexanderwicks I think it is a red-herring. Far better to do something across the board than to focus solely on foreign ownership. NZ property speculators cause just as much harm as foreigners do.

http://www.interest.co.nz/property/69886/nick-smith-says-ird-data-foreign-ownership-rental-properties-show-its-lower-nz-austra
88% of landlords are non-residents (this includes non-resident citizens renting out a home while away). The 11% of the owners who are foreign don't have as much impact on pricing as the 88% who are resident.

I prefer to focus on holistic fixes, not xenophobic ones.

@marcwhinery Somebody was ripping on you earlier for being American. I'm actually glad we've got somebody here who has experienced xenophobia and things like that.

A house, is a house, is a house, is a house. I cant believe the national obsession with owning a house! Moreover the tax dollars that could be filling govt coffers from property speculation is mind boggling. Love the LVR, just kills it for the poor huh. Capital gains tax please.

@reidalexanderwicks "Somebody was ripping on you earlier for being American. I’m actually glad we’ve got somebody here who has experienced xenophobia and things like that."

@anatolykern was the one. He was attacking me because I didn't share his views. Rather than embrace differences in people from all over, so often people lash out, bitter and spiteful.

The funniest thing about xenophobia is that it's an exclusive club. I'm sure the person who was attacking me for being new, thus ignorant, is also an immigrant. It's always "I was here first, I'm better than you." Rather than "You are here too, we are the same."

And, though my accent stands out strong, I'm white enough to fit in with most Pakeha. What's funny is the amount of "damn foreigners" talk I hear. "Does that include me?" usually shuts them up. Xenophobia is usually just (thinly) veiled racism. And always based in ignorance.

@johnmartin "A house, is a house, is a house, is a house. I cant believe the national obsession with owning a house!"

It's not national, it's global. And it's about having a "base" around which to live ones life. A safe place to go to at the end of the day. And yes, borrowing someone else's house for a home isn't as safe, because they can always take it back (even if notice must be given).

That, and it's financially better to buy than rent.

So he comes again...

One of the common psychopathic traits is self-victimization during defamatory attack, accusing target of harassment.

The only way of dealing with psychopaths is by exposure and complete subsequent isolation as they consistently create and promote conflicts within society.

It is impossible to have any logical discussions with them due to intent of actions with complete ignorance of opponents words.

The earlier people understand that the better.

As result of exposure and isolation in communities psychopaths change places often and could be found in increasing numbers within recent immigrants.

You’re quite right Marc it's a global sensation! But I do not need to own the castle. 'I don’t care where, so long as I’m there!' True some people need that financial security that property ownership seems to bestow. And then there are those who just don’t.

If everyone owns a house what happens when couples begin living together? An empty house? Cash out of the scheme? What if the housing market fell over tomorrow precipitating the draining of capital value from the collective wallet? No one wants a house – we've all got one! Merry-go-round stops.

What if we begin to solve this housing crisis by filling up those we already have in stock? Give people incentives to take people in as borders/ flatmates/ lodgers - call it House Pooling. Single occupancy dwellings account for 22% of the housing stock, one could assume there are a lot more empty bedrooms on top of that scattered around the country?

I see your point though Marc. I grew up with!

P.S I have one flatmate and we live in a four bedroom house :-)

I don't think anyone is suggesting that home-ownership be compulsory. There are many reasons why someone may wish to rent instead and that option should be available too. The problem is that right now the option of owning a home is unavailable to many who want to because it simply isn't affordable for them.

The point of this thread was to discuss ways to improve this situation so that more people (who want to) can.

It seems difficult even to get acceptance that there is a problem, let alone consider solutions for it.

A Capital Gains Tax is a step in the right direction and since that is a policy of several parties this election it will be debated in the media, so that's a good start I guess, perhaps all we can really hope for.

@anatolykern "The only way of dealing with psychopaths is by exposure and complete subsequent isolation as they consistently create and promote conflicts within society."

If only you'd take your own advice. You are the only psychopath here.

@anatolykern "As result of exposure and isolation in communities psychopaths change places often and could be found in increasing numbers within recent immigrants."

Ah, so it's the fault of the Immigrants? Where were you born? When did you become an NZ citizen?

@johnmartin " But I do not need to own the castle. ‘I don’t care where, so long as I’m there!’ "

To clarify, are you talking about you personally, or your opinion on others? Most people I talk to are very interested in owning their own home. They get to "nest", they can paint it, modify it, and don't have to answer to anyone else to make it theirs.

It's not only the financial aspect.

"What if we begin to solve this housing crisis by filling up those we already have in stock? Give people incentives to take people in as borders/ flatmates/ lodgers - call it House Pooling. Single occupancy dwellings account for 22% of the housing stock, one could assume there are a lot more empty bedrooms on top of that scattered around the country?"

I don't disagree. The more efficient financial investments aren't the best living arrangements. I've always bought the best of what I could afford, even if I had to stretch for it. When I bought a house 3 years ago, I bought more than I could afford, but managed to pull it off. It's appreciated more than 50% in 3 years.

If I had bought a $150k shack, I'd have $225, or a $75k profit. If I had bought a $1.5M mansion, Id' have a $2.25M mansion, or a $750k profit. Is $250k a year better or worse than $25k a year?

So we are "paid" to buy more than we can afford, anticipating appreciation.

That is but one of many of the causes of the "housing crisis". The crisis is easy to solve, but nobody will define the crisis and the desired result.

I've seen houses with multiple families in them. It isn't necessarily common, but my neighbors have 14 people in one house. It's hard to tell how many bedrooms it has, they've enclosed the deck and put a kitchen and laundry on it. And they did the same with the garage, and the drive in front of the garage, making 4 rooms I know of that weren't part of the original structure, but everyone sleeps inside, so if it's 5 bedroom, that's about 3 people per room, 3 kitchens, two laundries, all in one house.

That's much more efficient than me. 3 people on the same size land.

So, do we encourage efficient use of land for density? Or is that contrary to the popular desires and demands?

'Over the past three censuses, however, the percentage of New Zealand households that do not own the dwelling they occupy has increased, marking a move away from a long-standing national tendency for people to own their own home.'

Source: http://www.stats.govt.nz/browse_for_stats/people_and_communities/housing/housing-indicators/8-ownership-of-dwellings.aspx

Do some research please.

@johnmartin

OK first off your link is using data from 8 years ago.

Secondly, the very next sentence after the one you quoted reads "Possible causes include increasing participation in alternative forms of long-term investment, a high level of student debt, higher house prices relative to incomes and people forming families later in life." So they acknowledge that housing affordability is one possible reason for the decline.

Have a look at: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10881119

This shows housing affordability for various regions across NZ. From 1998 to 2012, no part of NZ has got cheaper to buy a house, and the only part that has remained the same is the east coast of the North Island.

First off its the trends that are important and they show that from 1991 until June 2014 a 35% increase in owner-occupied houses with a corresponding 88% increase in rented properties.

Take a look at the stats released 7 July 2014...

http://www.stats.govt.nz/browse_for_stats/population/estimates_and_projections/DwellingHouseholdEstimates_HOTPJun14qtr.aspx

@johnmartin and you don't attribute the growing difference in owning vs renting to people no longer being able to afford to buy a house? Why then?

@johnmartin "Do some research please."

From the way Loomio threads comments, it's impossible to tell who that comment is directed towards, unless you "@" someone.

Yes, the trend is for lower home ownership. The cause looks to be primarily housing rising in cost faster than income is rising. So people are opting to rent, because they can't buy.

It's not a "choice" to not buy because they would rather rent. But a forced reality because they have no ability to borrow enough to buy.

If owning a rental property were less economical, then home ownership would increase greatly as the housing costs dropped with the reduction of rental properties. Rants would also decrease as rental owners tried to lure people into their rentals.

But to attribute (or imply) falling ownership is caused by people with the means and ability to buy who chose not to seems odd.

Personally, I own a rental property. I don't expect change. If there isn't change, I'll own enough rentals by the time I retire to fund my retirement from ticket-clipping rent-seeking societal leaching. It's a little bit evil, but the rules encourage it. It's the most effective investment I can make. Principal grows (the value), as well as being cash positive (the rental income). There isn't much else out there with that kind of return. The government made this mess, and unless we vote out the National party, nothing will happen. Housing prices will increase, and I'll make money from it.

The rules around it are fundamentally flawed. You'd be stupid to not own a rental property, if you can afford it.

I will meet you halfway. I agree to your proposal to discourage real estate as an investment. I think there is a philosophical difference at play so I will bow out of this discussion.

Thanks Gentlemen.

@johnmartin "from 1991 until June 2014 a 35% increase in owner-occupied houses with a corresponding 88% increase in rented properties."

http://www.stats.govt.nz/browse_for_stats/people_and_communities/Households/housing-profiles-renting.aspx

Using the lying statistics, the percentage of people renting increased 18% (from 26.2% to 32.2%) from 1991 to 2001. And that trend continued, but I didn't have the 2014 numbers. Though there was a 27% increase in the number of rental properties in that time, from 301,167 to 412,197.

So there has been a real increase in rental properties, faster than the increase in total properties, so we are seeing an increase in the proportion of people living in rentals.

@johnmartin " I think there is a philosophical difference at play so I will bow out of this discussion."

I'm unclear what that is. Is it that you don't see a "problem" with an increase in proportion of rentals?

We don't have to agree that we personally would like to own to discuss what "others" in general want, or the reasons why.

I like to own because it has great financial benefits. Those reasons are often bestowed by parents to children without understanding, so that some people "want" to own without knowing why, because their parents always owned. But the discussion of why I do, or you do, or others do is irrelevant to whether it should be affordable to do so if one wanted to, or why our market is changing.

Having only just found this site, I find it strange that no one has mentioned (though I haven't read every word) why real estate attracts speculators. It has nothing to do with a house at all, which has no speculative value. If you specify what you want in, say, a two bedroom house, you can get a dozen builders, who can tell you how much it will cost, to the nearest couple of thou'. The speculation lies entirely in the land.
So long as there are not enough houses built the price of a house/land combination is always determined by the answer to the question "How much uncommitted cash can you afford each week?" This is why it now takes two wages to buy a house (because you have two wage earners), whereas one wage used to do, when each house had only one wage earner. It is really sad that all working women have achieved in the last thirty years is to push up the value of their house.
So what is the solution? Simple, but no-one will do it. Have the State own all the land on behalf of all Kiwis, as it should. Then the houses and assets on the land are saleable on the market; there is no speculation on that because the market is fixed by the price of a new house.
The land can only be rented from the State, the rent replacing rates. No more speculation because there is no fluctuation in prices to gamble on.

@dennisdorney "Have the State own all the land on behalf of all Kiwis, as it should."

And children are hungry, so the State should own all food on behalf of all Kiwis.

And employment is sometimes unfair, so the only employer should be the government and they tell every company who they should hire and for how much.

The reason nobody will do it is that it's too controlling. The government gets to own all the housing, and tell everyone where they can live. More people want to live in the CBD? Can't be done unless you get the right lease on the right property to build an apartment building. Want to raise your kids in the same house you grew up in? Sorry, the lease expired, you have to move, and your old house will be torn down.

People like "ownership". Even very young children have a concept of "mine", "yours", and all that. We do have leasehold, and they aren't very popular. Leasehold properties are sold all the time, but aren't desirable in a mixed market because the resale is low, so you won't see appreciation. Depending on the lease, the property depreciates (sometimes rapidly). People would rather see rapid appreciation, than rapid depreciation.

Land is still pretty cheap in some areas, but people still don't want to live there. If you want a leasehold, there are plenty of options for you.

And it's impractical to expect the government to come up with $1,000,000,000,000 to buy back the houses (And much much more if they were to own all the land). So what would you do? Nationalize it and make paupers of so many? What about the people paying on land now? Nationalize the land, and leave them paying thousands per month on nothing? Or nationalize the loans too?

There's a reason nobody is talking about nationalizing or buying all land and renting it back to the people.

http://www.realestate.co.nz/residential/search/keywords/leasehold

You have options now. People just don't like it. Why force it on everyone else, when it's available now, but people don't want it?

Yes it's only the land that appreciates. That why they say "location, location, location" because the house itself always goes down in value but the lands goes up. So gains will generally be higher if you buy a property where the land is a higher proportion of the total value.

Leasehold across the board would have been a fairer system as then no individual would benefit from capital gains but it's too late for that now.

@damonhorrell "Another problem with a property tax is that landlords will just pass it on to tenants by increasing rents."

That's not how it works. Take the extreme. Real Estate Tax (RET) is created that taxes 100% of the land value per month. If you were a renter and your rent went up to $200k per month (so the landlord could make tax payments), and you could buy a house for that, wouldn't you do everything in your power to move out?

Then, the landlord is stuck with a house nobody wants to rent. He has the choice to leave it vacant (invalidating insurance, causing foreclosure if financed), or sell it. When he (and many other) landlords sell, the price of houses drop, making them more affordable for those wishing to end renting.

So more renters buy, and more landlords sell. All for increasing the cost of being a landlord.

The numbers are made up to make it obvious, and to prevent complaints about the numbers being 5% too high or low. But the effect is the same, even for small changes. Increasing landlord costs does not go completely to rent prices, and even if it did, we'd solve the problem we were looking to solve.

@marcwhinery so basically you're saying that a sensible sized RET if passed on to tenants as increased rent would push some tenants to stop renting and buy, and they'll end up better off cos house prices will have come down? But what about those that still can't afford to buy and have to continue renting? Won't they be worse off than they are now? i.e. the poorest people would be the worst affected

@damonhorrell " But what about those that still can’t afford to buy and have to continue renting?"

Well, as landlords lose rental income, they'll cut prices to keep occupancy up. As landlords sell off houses, the price of houses will drop, so new landlords will charge lower prices.

Increasing landlord costs will decrease rents.

The poorest will be the best affected.

@marcwhinery has this been tried anywhere? "Increasing landlord costs will decrease rents" sounds counter-intuitive to me. Surely profit is the key motivation for many landlords. If market rents did drop with costs rising then they'll cut it in other ways by spending less on the upkeep of the property.

Originally you suggested that this Real Estate Tax only be applied to non-owner-occupied properties. This means it applies to rental properties and vacant properties. My concern is that this would affect tenants more than landlords.

Another option is to apply it to ALL properties but then offset that by reducing another tax (GST or income tax) so that the net effect for the average home-owner is zero and the net effect for the average tenant (assuming the landlord increases rents) is also zero.

Then the only people who get penalised are those who hold empty properties. This would include holiday homes but presumably if someone could afford to have a holiday home then they have a higher income anyway and the tax breaks they get from reduced GST/income tax would counter the effect anyway.

The main group penalised would be landlords with vacant properties. There will often be periods between one tenant moving out and another moving in where a property is vacant. During this period the landlord will still have to pay the RET but will be unable to pass it on to the tenant. This will increase competition among landlords to ensure they don't have vacant properties thus pushing rental prices down.

Probably loads of holes in the argument. Just making it up as I type.

@damonhorrell "has this been tried anywhere? “Increasing landlord costs will decrease rents” sounds counter-intuitive to me. Surely profit is the key motivation for many landlords. If market rents did drop with costs rising then they’ll cut it in other ways by spending less on the upkeep of the property."

It has been tried elswhere. Not deliberately, but when changes reduce profitibility, landlords don't spend less on upkeep. Upkeep isn't that optional. If you don't repair the property, then the tenants take you to tribunal, and you lose. If you repair it only to the minimum legal standard, you are effectively damaging your own investment. Both are very bad ideas for landlords.

I am a landlord. I own a rental property. I went through all these permutations when I considered the investment. What makes investors buy into property is the returns. Trim the returns or increase the risk, and they won't magically pay less in upkeep, but instead will sell or not buy in the first place. That'll drop housing prices and let other renters buy, reducing the pool of renters, further pushing down rent prices.

It's never been deliberately tried, but market fluctuations have had the effect in other places. It just takes a little pressure, 1% or less to start the process.

The structure is such that nearly all "rich" people have multiple homes, and nearly all MPs are "rich", so there is a distinct disincentive to fix the well known and well understood problem.

The "easiest" (being easy to calculate, administer, and low impact on "average" people) solution I could think of was a tax on non-owner-occupied properties, but the capital gains tax would also work, as would equalizing the tax benefits between renting and owning. It's cheaper to rent than own. That pushes rental prices up, boosting profits, which, in turn, further boosts rental prices.

I won't go into the details of the tax advantages for renting that don't apply to owning here, as my suggestions for fixes are unconventional, but I'd be happy to explain them if you aren't familiar with them.

@marcwhinery. I wont waste time answering all of your intemperate rant because it doesn't deserve it, even though if you had the wit to see it some of your arguments supported mine.
Where does 'hungry children' and 'unemployment' fit into the equation? My solution will reduce poverty and increase employment because it will. reduce debt. It will also go a long way to reducing one of the main causes of inequality, according to Thomas Piketty (Thomas who?), namely inheritable wealth, of which land is one of the main contributors.
I quite specifically said that the government will not own the houses: I did not say that this would affect where houses are built, though it would prevent rat-bag developers from buying up totally inappropriately located land (on flood plains and liquifaction-prone land etc).It would also stop overseas speculators from buying up land at all. It is because of these feral developers that Auckland is an energy devouring travesty, when we could have built a user friendly city like Paris instead.
"People like ownership". So do I but my proposal means that more people will own houses, not fewer. I am not sure where you get your figure of $1 trillion for total NZ house prices but a rough approximation suggests you have valued the average house at about $10 million. If only. "More if you include land" but I didn't did I?
So how can it be done? How can the State afford it? Easy:
1) The government simply states that in 50 years time (that's 2064, Marc) all land will come under the stewardship of the State and can neither be bought or sold. Simultaneously..
2) The State decrees that the maximum duration of a mortgage will be 25 years. This will reduce mortgages because the limits on buying a house is your disposable weekly income. Once you reach a limit weekly repayments can go no higher. The fixed repayments for a shorter mortgage period equals lower house price. Also..
3) The Government embarks on an immediate and massive State building program using money created by the Reserve Bank as in the PositiveMoney format until a surplus is reached - there will be no inflation (or dollar devaluation to be more accurate) as long as there is high unemployment.
What happens next? Initially very little, though the building program will lead to a slow slide in prices. Eventually as the clock to 2064 ticks away, buyers will be reluctant to pay high prices for land that will not be theirs in the near future, so the rate of fall of prices will increase so that by 2064 the value of a mortgage will be the cost of the house plus improvements, plus services, in all about 60% of present prices. What's wrong with that?

@dennisdorney "I am not sure where you get your figure of $1 trillion for total NZ house prices but a rough approximation suggests you have valued the average house at about $10 million. If only. “More if you include land” but I didn’t did I? "

There are nearly 2,000,000 "houses" in NZ. At $10,000,000 each, that's 20,000,000,000,000, 20x my estimate.

I know where I grabbed my numbers (the latest census). But I'm curious where you grabbed your numbers from.

@dennisdorney "The government simply states that in 50 years time (that’s 2064, Marc) all land will come under the stewardship of the State and can neither be bought or sold."

Simple to say, but what about all the lawsuits? That statement is the equivelent of the government driving a bulldozer into my house ($200k+ damage, I'd estimate).

Everyone who owns a house should stop making payments. Let it foreclose. It's "worth" less than half what it was yesterday, much lower than the mortgage amount.

I'm not sure that'd work out the way you hope. Unless you were hoping for massive financial collapse, under the guise of "help".

The only practical way to acheive it is to buy back properties (land and house) for market rates over that period. Perhaps a 5% real estate tax (rates) at 0.5% per year until 5% is reached, squeezing the market, encouraging sales (and at lower prices), and the government coming in with the money they make on the tax and buying the properties. It'd be hard, but it at least wouldn't cause an over-night collapse.

After 50 years of that, most of the property would be bought, and the remainder could be "nationalized" at market or near-market at that time, for a much lower cost. Perhaps helped along with another 0.1% per year increase in the rates. Until all land is purchased.

"Eventually as the clock to 2064 ticks away, buyers will be reluctant to pay high prices for land that will not be theirs in the near future,"

I hold a freehold title from the crown. If they want to take that back, they'd better pay me for it. And if I sell it the day after your announcement, my freehold became leasehold, so nobody would want it, so the price would drop through the floor within 30 seconds of the announcement. Announcing something 50 years away would have a much greater immediate impact than you assert, and still take 50 years to complete your goal, with dozens of governments in the middle with the ability to undo anything you did. That makes it impractical.

If I agree with your goals, but disagree with your path, then I'm "intemperate"? Then I will go get a t-shirt with "intemperate" printed on it, and wear it proudly.

@marcwhinery What if we set a one rental property limit before extra taxes set in? Aside from people in your friend's situation with the beach house, there are people like us who are renting out my grandfather's house so he can feel like he owns something.

@reidalexanderwicks Sounds like a case for exemptions. Just based on the context, I presume your grandfather owns a house, but moved out because his independence is failing. I think a "medical" exemption should make sense, including the "medical" problem of aging.

I'm against a blanket exemption for the first rental property because the most common owner of a rental property is a NZ family who lives in a house and rents a second. When people pay off their first, they are highly likely to buy a second and move in it and rent the first, or rent out the second.

A blanket "1 rental free" would exempt the largest class of landlord, making the whole exercise a waste of time.

@marcwhinery Yeah, the dude's in an old folks' home. Super, super depressing.

I have no idea how we'd handle this issue, then.

@reidalexanderwicks It's still one home for one owner, and he'd live there if he could, so I think that an exemption to the tax would be reasonable. Most places, if you have a valid exemption, you simply apply for it. It's not a big hassle, and they occasionally audit the requests to ensure they are valid.

Perhaps 1 house free (regardless of whether you live in it), though that would result in all the 2-house people exempting the more expensive one, regardless of which they live in, if any.

@marcwhinery

Perhaps 1 house free (regardless of whether you live in it), though that would result in all the 2-house people exempting the more expensive one, regardless of which they live in, if any.

There is also the problem of couples owning two houses and putting one in each name. Or worse people putting things in their children's names. But this would be considered tax evasion if there was a new tax on non-owner-occupied property.

@damonhorrell "Or worse people putting things in their children’s names. But this would be considered tax evasion if there was a new tax on non-owner-occupied property."

For the best tax position, investors would be setting it up as an LTC (trust) "owned" by the person with the highest individual earned income (at least for newer rentals or ones that are being done-up). Putting it in the names of the children would cost them more in taxes (income) than it would save them in taxes (rates). But should still be considered evasion and prosecuted as tax fraud (as cash-positive and profitable rentals are "cheapest" against $0 income earners), resulting in the forfeiture of all properties bought by the offender or his "family".

My original wording was one house per "family" but that would be hard to enforce and track.

@marcwhinery can't it simply be that all properties are taxed but you're exempt from this taxation if you live in the house yourself, or if you have a good reason why you can't live in it (such as medical, temporarily away from home due to work, marital breakup etc) Then it does effectively become one per family.

I wonder how Labour are doing their "all but the family home" CGT.

@damonhorrell "I wonder how Labour are doing their “all but the family home” CGT."

Probably ripping off the US CGT exemption where if you lived there 3 of the last 5 years, you may apply for a CGT exemption (in a manner where a lie on the form is bad perjury, and the facts are easily checked). I haven't seen Labour's details.

http://www.odt.co.nz/news/business/309878/housing-cultural-change-called

'If New Zealanders were not cured of their housing fixation, the nation's financial and economic stability would continue to be put at risk every time there was a recession.'

http://nzier.org.nz/static/media/filer_public/98/7c/987c99b1-d879-48ca-ac2c-58e05307ac5c/nzier_public_discussion_document_2014-04_-_home_affordability_challenge.pdf

@johnmartin My take on the discussion document is that investors looking for capital gains or rental returns are driving up the cost greatly. About 50% of home sales go to investors, almost all of which are Kiwis, not foreigners.

Why are prices high? Because NZ has one of the largest "second home" ownerships in the world. The good homes are bought up and put up for rent, and not available for the new entrants.

And no, I couldn't find any stats on that. There doesn't seem to be good measurements. Someone feel free to give numbers on that.

One of the other interesting thing is that I'd heard from German friends that owning a home there isn't as common there (and found true if you look up home ownership), and the report indicates that leases are more slanted towards tenants there. So people don't feel the "need" to rent because they can get indefinite leases, and stay very-long term, make changes/modifications without permission, and treat it more like their home, rather than a rental car.

Encouraging renting would help with the market, but more homes are sold to investors than first-time buyers, so killing the investors would go much farther to making housing affordable than getting the first-time buyers to rent instead (And they'd just be renting investment properties, so we'd further skew the already skewed numbers).

I agree in principle.

Capping Rents, limiting ownership of rental properties or limiting who may be a landlord, are policies that could backfire badly. They would all act to push rent up.

I like Labours CGT 'on all but the family home' idea. It would cool property speculation without penalising first home buyers. Something which nationals policy of increasing required deposits (lower loan to value ratios) clearly does.

However I have heard mention that implementing the CGT might be too much for poor IRD to handle while trying to upgrade their systems to digital... Sounds like excuses to me.

I like the way Singapore has implemented cooling measures: They have an ABSD (Additional Buyer Stamp duty) on the purchase of properties. It is graduated from 0% for the first house to 7% on the second and 10% on the third. For Foreigners and Non-Individuals it is a flat 15%. It favours citizens over permanent residents, but this is something I don't think would suit the NZ case.

They also have graduated Loan to Value Ratios. 60-80% for the first house, 30-50% on the second and 20-40% on the third. This is what national should have done if they really cared about first home buyers.

http://blog.moneysmart.sg/property/how-singapores-7th-round-of-cooling-measures-affect-you/

I'd like to add that I don't think we should completely abolish rental properties. Why would you buy a house if you're only going to be living there for a year before moving on?

A Capital gains tax on investment rental housing on all but the family home is an excellent idea!
- discourages investors in housing market thus enabling first home buyers a hand up.

Mandatory installation of ceiling and underfloor insulation.
Mandatory installation of HRV systems in all NZ homes.
- Dry, warm houses is the best way to prevent a whole heap of preventable illness within our communities.
- Manufacture of HRV systems in NZ will create jobs for NZ's

Society as a whole benefits from everyone living in their own home rather than renting:

Actually, it's more that society benefits from people having a secure place to live that won't be taken from them due to either repossession by the bank or the house being sold by the owner. Long term rentals could achieve that but they have their own problems.

The problem with private ownership of houses is that it causes a few people to be secure while everyone else is insecure. Private rentals add to that insecurity as well as adding to the private accumulation of wealth that Piketty identifies as being detrimental to the overall health of a society.

Basically, private ownership of houses and land is bad for society as it brings about ever higher inequality. This would suggest that the solution that we're reaching for resides in state ownership of houses that are then rented out at enough to cover maintenance.

All taxes paid out as part of building a owner-occupied house should be abolished. The tradesmen will pay their tax as usually, the home buyer is refunded/ exempt from the gst and income tax component of that transaction. All materials will be exempt from gst. Return tax on all compliance costs and rates - charging twice in the same transaction is bullshit. Limit budgets to average 3-4 bedroom house price and other economic indicators. Remove tax from rent paid out and increase tax on landlord profit - no exemption for trusts or other tax avoidance structures. Lower Bwank profit margins on mortgages. Its about people owning houses, not houses owning people.

@johnmartin "Remove tax from rent paid out and increase tax on landlord profit"

A landlord should be making no profit on residential property speculation/investment.

You buy a "do up" and do up enough to make it legal to rent out. Then, every your, you do enough in "repairs" to make sure you lose money. 10 years from now, you spent $200,000 in "repairs" and ended up with something much nicer than you started with, and made no "profit" at any point in the venture. When you sell the done-up property in 10 years, you tripled your money (half of the gain from the market, the other half from your improvements), and there's no capital gains tax on it.

The idea that landlords make profit is a lie that I've only seen the numbers work when you consider the large commercial leases. Vector Arena is leased. Telecom's main buildings in AKL and WEL are leased. The commercial leases (lots of trusts) are the ones that show the greatest profits, but those are long-term leases with no intention of sale, so they structure their investments differently. The residential landlords rarely "make money" until the landlords retire and move from portfolios that are "growth" to income. And even then, they can get the money from having built a well staggered portfolio of properties.

@ericokane
DVS is a scam that should go out of business. For less than the price of insulation, they put in a HRV in my house (for a previous owner). When I went into the attic after buying, I noticed there was no insulation.

The HRV made a difference when we first moved in, but after I put in insulation, I turned off the HRV just to see the difference, and an HRV does nothing for a well insulated house.

They have good marketing, but the system masks real problems, but if you fix the underlying problems, it's a massive waste of money, not even worth the power to run it if the system was free.

Affordable home ownership for families, in my opinion, should be a priority.

@marcwhinery Isn't HRV essentially a dehumidifier?

@reidalexanderwicks It's pumping attic air into the house. If the attic air is as moist as the air in the house, it'll not help. If the attic air is the same as the outside air, it's no better than opening a window. When you have no ceiling insulation, the attic air is likely warmer and drier than inside the house, as the house warms the attic space through the thin uninsulated ceiling.

But if you well insulate the ceiling, the attic air will be more like the outside air, and the benefits drop to almost nothing. Insulation is cheaper and more effective for making a house healthy. But the HRV pushers would rather you spend $6000 on an HRV, than $2000 on insulation.

@wadevuglar

So you want everyone who owns a house now to take a huge capital loss?