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> What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy t

> What needs to happen is owner occupiers are given a competitive edge when bidding for a property over a landlord. Hence more taxes and disincentives for buy to let purchasers. A vibrant rental market is a great thing for many reasons (e.g. look up any study on labour mobility). Not sure why we should have tax advantages for home owners and tax disadvantages for the rental market. It's certainly not equitable to the renter class. And there's tons of evidence that home owner tax advantages flow mostly to incumbent home owners who gain the proceeds from any tax advantages spent to help new home owners get into the market.

yardstick 5y ago
Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing? Yes I agree some rentals are necessary given the practical nature of the housing system. But once they become the cause of people being unable to afford to buy their own home it is an issue that needs addressing.
- IkmoIkmo 5y ago
  > Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing? What I'm trying to say is that if the government is manipulating the market by giving tax advantages to the homeowner market, and tax disadvantages to the rental market, that it's not a good way to spend public funds. Home ownership is exactly cheaper because it's so subsidised through various ta breaks. That makes renting more expensive vis-a-vis owning, which hurts the class of people who can't rent or has a different preference around life (e.g. more transient, more mobile, less fixed, travel for work, seasonal work etc). Then concluding 'oh owning is cheaper, but it's less accessible, let's give even more tax breaks and stimulus and make renting even more expensive' only exacerbates the problem, it doesn't solve it.
  - yardstick 5y ago
    I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here. I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing. Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups. I’ve got nothing to back this up, but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property. Yes there are some that want to rent but i seriously doubt it’s anywhere near 1/3rd of the population. I also suspect a significant number of people who prefer to rent would not have this opinion anymore if house prices were not so inflated. Maybe 20-25% but no way the 1/3 of all Kiwis that we are seeing now. Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I’m not calling for elimination of rental properties, just a fair limit on them. In my opinion it’s more important every person is able to buy a single home than every landlord be able to buy as many homes as they want. 1. https://www.stats.govt.nz/assets/Uploads/Reports/Housing-in-Aotearoa-2020/Download-data/housing-in-aotearoa-2020.pdf#page28 https://www.stats.govt.nz/assets/Uploads/Reports/Housing-in-... 2. https://www.newstalkzb.co.nz/news/business/mum-and-dad-landlords-own-more-than-a-third-of-property/ https://www.newstalkzb.co.nz/news/business/mum-and-dad-landl...
    - IkmoIkmo 5y ago
      > I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here. It's not, but giving tax breaks to home owners is. Giving tax cuts to home owners and not home renters is by definition not equitable, you'd be favouring one group of people over the other. And if you look at who has it economically better, you'd statistically favour to give tax cuts to the economically better-off group most of the time in almost all countries. If you then, on top of that, tax landlords, it leads to even higher rents and even larger disadvantages for the renter class. That's something you haven't acknowledged, except by saying 'perhaps some of these renters can become owners, too!' -- and that's a fair point, but also wholly insufficient. We know not everyone can, needs or wants to be an owner. We know a rental market is important. Yet the tax manipulation you suggest very much disadvantages the usually poorer-than-average income rental group and favours the richer-than-average owner group. > I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing. What policies are you talking about that would deprive people of the ability to own a home? > Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups. Just like in the US. Just like in my country in Western-Europe. I'm not sure how large you think it should be, more, less? Should we strive towards anything at all? > but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property. That doesn't seem reasonable at all. Would you say the same for example, in a world with a shrinking population, large amounts of vacant land and cheap technology to mass-construct homes? In such a world, property prices would (ceteris paribus) drop over-time. Most people would be entirely disinterested in owning a home in such a world. Why not simply cheaply rent, wherever you decide to live, move as often as you want, as often as your tastes or moods change. Of course this world is hypothetical, but I use it to show that the choice to own a home isn't natural, it's conditional. Now I agree that in the current market, it's preferred to own a home, because prices and rents are going up, but a mortgage can be more or less locked in. Of course people prefer a 30y mortgage contract at 2k per month and see their home equity triple in 30y, than to rent at 2k and see their rents triple in 30 years, for example. But the point is that this ownership preference is thereby conditional on what the market does. At the same time, every academic study, every central bank etc in the world is saying that low interest rates and tax breaks are pushing prices up. That means you're doing two things. The very condition you have that says 'owning is preferred' is in fact exacerbated by your policy to subsidise owning (with public funds), which screws over the rental market and everyone unable to own (which has always been 20-30% of the population, typically the poorest one). And second, you're favouring this generation over a future generation. That subsidy isn't sustainable, but creates massive wealth for current owners (who bought into a market at $200k homes) at the expense of future owners who are born into a market where a home costs $1 million. That also is poor public policy. > Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I don't really see the big issue with minor property concentration. They all must rent out at market rates. Someone with 20 properties (in a country with a few million properties) is not setting the price levels, but just following them, just like anyone with 1 property would. Would it help if the company or person who owned 20 properties, would instead be 5 companies or persons who owned and rented out 4 properties? > Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I don't see what spending of public funds you're referring to, thereby also not sure how that prevents businesses to grow and expand.
dillondoyle 5y ago
I agree with you on this. Though to continue being a socratic a-hole on this thread, I might ask won't subsidizing renters always trickle up? The trickle down seems like a lie. I'm personally supportive of housing as a human right and think it's worth it and actually stimulating all around, turns out removing stresses of life is good for the economy and people. I think we did this backwards with stimi. Should have written checks to renters directly. The programs we do have for relief are woefully behind with hundreds of millions outstanding huge red tape. Giving all renters point blank could maybe help start balancing the scales just a tiny bit.

yardstick 5y ago

Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing? Yes I agree some rentals are necessary given the practical nature of the housing system. But once they become the cause of people being unable to afford to buy their own home it is an issue that needs addressing.

IkmoIkmo 5y ago
> Imagine if it was cheaper to buy a house and service the mortgage on it, than to rent. In such a case, is the rental market still a great thing? What I'm trying to say is that if the government is manipulating the market by giving tax advantages to the homeowner market, and tax disadvantages to the rental market, that it's not a good way to spend public funds. Home ownership is exactly cheaper because it's so subsidised through various ta breaks. That makes renting more expensive vis-a-vis owning, which hurts the class of people who can't rent or has a different preference around life (e.g. more transient, more mobile, less fixed, travel for work, seasonal work etc). Then concluding 'oh owning is cheaper, but it's less accessible, let's give even more tax breaks and stimulus and make renting even more expensive' only exacerbates the problem, it doesn't solve it.
- yardstick 5y ago
  I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here. I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing. Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups. I’ve got nothing to back this up, but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property. Yes there are some that want to rent but i seriously doubt it’s anywhere near 1/3rd of the population. I also suspect a significant number of people who prefer to rent would not have this opinion anymore if house prices were not so inflated. Maybe 20-25% but no way the 1/3 of all Kiwis that we are seeing now. Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I’m not calling for elimination of rental properties, just a fair limit on them. In my opinion it’s more important every person is able to buy a single home than every landlord be able to buy as many homes as they want. 1. https://www.stats.govt.nz/assets/Uploads/Reports/Housing-in-Aotearoa-2020/Download-data/housing-in-aotearoa-2020.pdf#page28 https://www.stats.govt.nz/assets/Uploads/Reports/Housing-in-... 2. https://www.newstalkzb.co.nz/news/business/mum-and-dad-landlords-own-more-than-a-third-of-property/ https://www.newstalkzb.co.nz/news/business/mum-and-dad-landl...
  - IkmoIkmo 5y ago
    > I’m not sure how charging taxes on landlords is spending public funds that they would have otherwise had if that tax was not present. There’s no loss of public funds here. It's not, but giving tax breaks to home owners is. Giving tax cuts to home owners and not home renters is by definition not equitable, you'd be favouring one group of people over the other. And if you look at who has it economically better, you'd statistically favour to give tax cuts to the economically better-off group most of the time in almost all countries. If you then, on top of that, tax landlords, it leads to even higher rents and even larger disadvantages for the renter class. That's something you haven't acknowledged, except by saying 'perhaps some of these renters can become owners, too!' -- and that's a fair point, but also wholly insufficient. We know not everyone can, needs or wants to be an owner. We know a rental market is important. Yet the tax manipulation you suggest very much disadvantages the usually poorer-than-average income rental group and favours the richer-than-average owner group. > I’m also not sure how government policies that deprive people of the ability to own their own home (since they are priced out of the market by landlords, and landlords now own way too much of the housing stock) is a good thing. What policies are you talking about that would deprive people of the ability to own a home? > Right now in NZ about 1/3 of people rent [1]. It’s an all time high across all age groups. Just like in the US. Just like in my country in Western-Europe. I'm not sure how large you think it should be, more, less? Should we strive towards anything at all? > but seems reasonable for people given the choice to own their property vs pay someone else, that they would want to own the property. That doesn't seem reasonable at all. Would you say the same for example, in a world with a shrinking population, large amounts of vacant land and cheap technology to mass-construct homes? In such a world, property prices would (ceteris paribus) drop over-time. Most people would be entirely disinterested in owning a home in such a world. Why not simply cheaply rent, wherever you decide to live, move as often as you want, as often as your tastes or moods change. Of course this world is hypothetical, but I use it to show that the choice to own a home isn't natural, it's conditional. Now I agree that in the current market, it's preferred to own a home, because prices and rents are going up, but a mortgage can be more or less locked in. Of course people prefer a 30y mortgage contract at 2k per month and see their home equity triple in 30y, than to rent at 2k and see their rents triple in 30 years, for example. But the point is that this ownership preference is thereby conditional on what the market does. At the same time, every academic study, every central bank etc in the world is saying that low interest rates and tax breaks are pushing prices up. That means you're doing two things. The very condition you have that says 'owning is preferred' is in fact exacerbated by your policy to subsidise owning (with public funds), which screws over the rental market and everyone unable to own (which has always been 20-30% of the population, typically the poorest one). And second, you're favouring this generation over a future generation. That subsidy isn't sustainable, but creates massive wealth for current owners (who bought into a market at $200k homes) at the expense of future owners who are born into a market where a home costs $1 million. That also is poor public policy. > Also does 1/6th of all residential property NZ need to be owned by someone with 20+ properties under their belt? [2] Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I don't really see the big issue with minor property concentration. They all must rent out at market rates. Someone with 20 properties (in a country with a few million properties) is not setting the price levels, but just following them, just like anyone with 1 property would. Would it help if the company or person who owned 20 properties, would instead be 5 companies or persons who owned and rented out 4 properties? > Is it good use of public funds to allow such behaviour rather than say encouraging (non residential rental) businesses to grow and expand I don't see what spending of public funds you're referring to, thereby also not sure how that prevents businesses to grow and expand.

dillondoyle 5y ago

I agree with you on this. Though to continue being a socratic a-hole on this thread, I might ask won't subsidizing renters always trickle up? The trickle down seems like a lie. I'm personally supportive of housing as a human right and think it's worth it and actually stimulating all around, turns out removing stresses of life is good for the economy and people. I think we did this backwards with stimi. Should have written checks to renters directly. The programs we do have for relief are woefully behind with hundreds of millions outstanding huge red tape. Giving all renters point blank could maybe help start balancing the scales just a tiny bit.