Depreciation changes will 'mildly' impact rents - English

24 May 2010 01:50p.m.

Rent to much wrote:

I spend over half of my income on rent, as Investors are predicting a 4.5%-6% in rent this will make me $13.50-$18.00 out of pocket, this to me is not a mild increase. If you take in the predicted 6% inflation by the treasury which can see the rent sky rocket even further. I hope the treasury are wrong and my landlord will feel obliged to pay for his investment or else Im up shiz creek.

21 May 2010 10:41a.m.

Glocks wrote:

Sandy, my understanding is you will still be able claim back legitemate expenses (ie improvements) on your properties. However, if you are relying on depreciation to cover the cost of maintaining your properties, then it sounds like you have overextended yourself.

I get very annoyed when landlords, who have been dodging tax for years, claim they are being unfairly targeted, and talk about how these new 'costs' will be passed on to tenants. The fact is there are a significant number of people in this country who have not been paying the right amount of tax on their earnings. You may not think the tax reduction you receive is significant, but when you have thousands of landlords doing the same thing, it begins to add up.

Funnily enough, it was the clamour to exploit these tax loopholes that pushed house prices beyond the reach of so many kiwis... I suspect their removal will now have the opposite effect, which is good news for legitemate house buyers.

21 May 2010 07:08a.m.

Ruz wrote:

Well Maria, perhaps your students should resort to the ancient skill of reading. Another outrageous suggestion would be to invite your students to search out the budget speech and track the follow-up media analysis.

21 May 2010 06:56a.m.

Sandy Scarrow wrote:

The focus in this budget on rental properties is so unnecessary. I own a few rental properties and have as a result reduced my personal income tax paid but not significantly. Changing the tax treatment on depreciation of assets will simply mean I am less likely to spend my tax paid money on upgrading the properties I own. I had been planning to spend on recarpeting and insulating these properties with my tax return this year. I will now reconsider this plan. I find it interesting that the right are so vitriolic about "mum and dad' investors making decisions to invest in rental property. In my view we (not that I'm a mum or a dad) are simply making rational economic decisions. We are leveraging the equity we have in our home to grow our capital wealth. The government would like us to invest more in the share market. Can you imagine what a bank would say if you went to them saying you want to raise $200,000 against your home to invest in shares. You'd be laughed at. Surely more focus should be put on rebuilding confidence in equity markets - then more money might go that way. Until then, tinkering with depreciation on rental properties is likely to have little impact.

20 May 2010 06:50p.m.

maria wrote:

If I can't hear and see it, then I can't be sure that I will let my students watch it at all.