GRA Blogs

Articles by Matthew Gilligan

Sunday Rant...

AUTHOR: Matthew Gilligan

POSTED: 17 July 2011

Labour intend to ring-fence property losses to future property income. This will send thousands of investors broke fast. Take investors' tax refunds away, property values crash. This is well documented overseas. Sweden property values dropped 35% when they ring-fenced losses and the following government reversed the policy, with values immediately thereafter recovering.

Accountants would get a mountain of pre-change planning work and we would have years of work to do, while lots of New Zealanders will go broke with ring-fenced losses and insolvency revenue will grow too. I'm not going to sit by and have to charge my clients for work that is going to make them go broke. Labour, are you thinking this through?

I would not want to be a banker though with losses ring-fenced... it will make an already difficult environment treacherous and property investors would want to be selling sooner than later.

This really is playing with fire by Labour with little short-term upside given the global backdrop of deleveraging, and capital growth prospects in NZ with higher interest rates on their way (next year or sooner), and potential for major problems globally as Asia and Aussie come off the boil and Europe and the USA choke on their indebtedness. This must put pressure on interbank lending rates within 2 years, especially if we see sovereign default in the PIIGS or USA.

The massive bureaucracy they built and squandered our money on, the buy back of KiwiRail, now Capital Gains Tax, to name but a few blunders.

Back on Tax

If you want instant cash flow targeted on property - it's simple. Introduce stamp duty like the rest of the world. Instant 3- 5% tax on the turnover in the property sector dampening speculation and raising major government revenue, without the complexity of CGT.

If you are worried about ring-fencing of property losses, we are here to help - email [email protected], phone +64 9 522 7955, or come and see us.

Request a Meeting

Matthew Gilligan
Director

09 522-7955

[email protected]

© Gilligan Rowe & Associates LP

Did you like this article? Subscribe to our newsletter to receive tips, updates and useful information to help you protect your assets and grow your net worth. We're expert accountants providing expert advice to clients in NZ and around the world.

Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

Comments

Testimonials

This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request

Would you like to receive . .

. . tips, updates and useful information to help
protect your assets and grow your net worth?

Investing in residential property?

Put this at the top of your reading list.

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.