05-09-2023, 06:16 PM
Came across this just now.
National’s Foreign Buyer’s Tax Deeply Flawed.
National are offering tax cuts as part of their economic policy. To help fund that scheme they propose reversing the ban on non-NZ resident buying existing homes , reducing the bright line test down to two years and charging a 15% surtax on non-NZ purchasers buying homes worth over $2 million.
National’s claim is that this would raise $740 million a year .
Putting aside for the moment the undesirability of non -NZ residents buying up our homes and the fact that to raise that amount the policy would require foreign buyers to purchase roughly half of all our top end properties each year, there are a couple of other issues voters really need to think about.
1. If their scheme worked as National claims it would, then it would trigger what Canadian Social Geographer Prof David Ley (a world expert on immigration and cities) once described to me in an interview as “the ripple effect”.
This is where a rich foreign buyer purchases a home at the top of the market that would previously have been purchased by a local.
The wealthy local can’t compete and so moves down to the next layer in the market and so on until you get to the people at the bottom of the property market who can no longer buy because the prices have risen beyond their means.
2. Would Naional's foreign buyer tax policy really raise money for the government?
In 2016 Vancouver imposed a 15% foreign buyer tax and later raised it to 20% in order to cool rampant speculation on properties by foreign buyers . Which it did!
So how would a tax designed to COOL a property market encourage foreign buyers to purchase our homes?
The answer presumably lies in National's proposal to drop down the Brightline test to two years to encourage non-NZ residents to speculate in our property market.( Oh oh..! See 1. above)
Really? Is this what we want? Did we learn nothing from the last time we allowed foreign buyers to buy and sell our homes?
Your call in October.
#nzpol #nzpolitics #bryanbruce
National’s Foreign Buyer’s Tax Deeply Flawed.
National are offering tax cuts as part of their economic policy. To help fund that scheme they propose reversing the ban on non-NZ resident buying existing homes , reducing the bright line test down to two years and charging a 15% surtax on non-NZ purchasers buying homes worth over $2 million.
National’s claim is that this would raise $740 million a year .
Putting aside for the moment the undesirability of non -NZ residents buying up our homes and the fact that to raise that amount the policy would require foreign buyers to purchase roughly half of all our top end properties each year, there are a couple of other issues voters really need to think about.
1. If their scheme worked as National claims it would, then it would trigger what Canadian Social Geographer Prof David Ley (a world expert on immigration and cities) once described to me in an interview as “the ripple effect”.
This is where a rich foreign buyer purchases a home at the top of the market that would previously have been purchased by a local.
The wealthy local can’t compete and so moves down to the next layer in the market and so on until you get to the people at the bottom of the property market who can no longer buy because the prices have risen beyond their means.
2. Would Naional's foreign buyer tax policy really raise money for the government?
In 2016 Vancouver imposed a 15% foreign buyer tax and later raised it to 20% in order to cool rampant speculation on properties by foreign buyers . Which it did!
So how would a tax designed to COOL a property market encourage foreign buyers to purchase our homes?
The answer presumably lies in National's proposal to drop down the Brightline test to two years to encourage non-NZ residents to speculate in our property market.( Oh oh..! See 1. above)
Really? Is this what we want? Did we learn nothing from the last time we allowed foreign buyers to buy and sell our homes?
Your call in October.
#nzpol #nzpolitics #bryanbruce
in order to be old & wise, you must first be young & stupid. (I'm still working on that.)