Sunday, December 11, 2005

The dream of home ownership

The dream is slowly slippin away for many New Zealanders - but why?

a key reason is the benefits of owning a property. sound strange?

Well the fact is that there are quite large tax benefits to owning property in NZ what that does is makes it far more attractive for investors to buy property, and so they do that means that there are more people effectively on the market for property price goes up and investors outbid first time home owners. Prices sky rocket. If there were financial DIS-incentives for home ownership that would allow prices to come down it would discourage people from owning multiple properties and that would solve the problem

The solution is of course a capital gains tax in fact a very heavy capital gains tax to disproportionately discourage investment in property and thus free it up for those who do not buy houses to make money thy buy them to live in them and make improvements for their own lifestyle not some generic one.

market fluctuations also hurt in that they tend to punish normal home owners and reward savvy investors, because they have more flexibility.

Renting gives one greater freedom to move and makes one more conscious of the efficient use of a certain space, The disadvantages are inefficiencies to communications between landlord and tenants (e.g. regarding improvements) the unfair tax system that gives capital gains without tax and the psychological effect of owning a house "because it is the kiwi dream".


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