Articles by Matthew Gilligan
The Tax Working Group report was publicly released at a press conference yesterday, 20 January 2010. Please read our summary including our response of interest to property investors.
The highlights of the report seem to be:
Ring-Fencing of Losses
Targeting of Existing Property Investors
Targeting existing property investors in this way (taking their wealth) is not fair, neither is it in the public interest in the writer's view. I hope the government works this out and decides not to change the depreciation regime. Trailing it and hurting average mum and dad investors that make up the bulk of the investment base in residential property. These are ordinary (voting) public trying to get ahead.
Perhaps the government should consider the political popularity as it will certainly impact voting. This will not be an election winner for them; hundreds of thousands of investors will be affected.
Also consider the banks' position. Many investors are geared (borrow) 80% of the property value. If property prices drop 10-20%, banks will be in breach of their banking covenants and be obliged to call up loans and mortgagee sell investors. This will destabilise the banking industry - totally unacceptable one would think.
Reduced house prices and reduced disposable income from investors will also dampen consumption. Not good at time when the government is trying to re-activate consumption.
However, if the depreciation regime is grand-fathered (affecting new investors, leaving existing investors as they are with current rates until they sell existing property), the impact would be less of an issue.
This addresses the 'level the playing field' argument between property and shares (an argument I don't agree with, that is driven by people with vested interests in shares like Brash (a shareholder in Huljich Wealth Management) and Weldon ( NZSE CEO)).
These people have huge upside in attacking property, and personally I do not believe this issue has been addressed by the media.
To educate you must entertain. Property School was both informative and fun. I could not have coped with a boring session after a day in the office. The things I found most valuable were learning about the property wealth wheel, the value of trusts, credit lines and Life Online (which I will use again in the future). I got a lot out of it and have already recommended Property School to friends. - Peter M - November 2015
If you're investing in residential property, seeking to maximise your ability to succeed and minimise risk, then this is a 'must read'.
Matthew Gilligan provides a fresh look at residential property investment from an experienced investor’s viewpoint. Written in easy to understand language and including many case studies, Matthew explains the ins and outs of successful property investment.