Thursday, May 10, 2007

Watch out NZ property developers

There are a couple of proposals on the table currently related to property development that any serious property investors/developers should be following closely.

The first is the "Associated Persons" IRD proposal, submissions close tomorrow 11th May, so get your skates on. You can find the discussion paper here.

Basically the associated persons rule related to tainting is proposed to be relaxed and this would seriously affect property developers etc. ability to invest in property without attracting capital gains - something the rest of the New Zealand population can do legitimately. Gilligan Rowe and Associates (GRA) are actively pursuing this one, so if you want more info let them know. Alternatively drop me a line. You might even source a sample submission. I foresee strong opposition to this one.

The second is the Wellington City Council's (WCC) proposal on"Infill Housing". Basically WCC is planning to introduce more stringent requirements on the splitting up and corresponding site coverage/height etc. rules when subdividing an existing property, due to the concern that some developments are going beyond reasonability with height and space. I can see arguments both ways for this one, so make sure to act now to make sure your voice is heard.

Given the current heat in the property market and enormous pressure on property prices, based on my understanding of fundamentals, both of these initiatives will apply more pressure. Moreover why is our taxpayers money being consumed on initiatives to increase the income tax specifically related to property, when we're running a too many billion dollar and growing surplus? Oh well, I guess that surplus has to go somewhere... I'd love the government to take my spare tax dollars and build some decent broadband infrastructure.

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