Capital Gain Tax and The Free Lunch Myth

bungyjumping999

Interesting to see what Milton Friedman has to say about this The FREE LUNCH theory

The Capital Gain Tax will pass on to the end consumers. The market will likely add another 20% to the selling price.
Just like GST, the fact that it increases to 15%, does not mean your good and services price stay the same, it will be added on to the end users and absorbed into the pricing mechanism.

鼠星人

哈哈，工粉们颤抖吧，最后还是谁有房子谁说了算。大家一起涨价，涨租，有本事别买，别租房子

bungyjumping999

鼠星人 发表于 2019-4-15 07:53
哈哈，工粉们颤抖吧，最后还是谁有房子谁说了算。大家一起涨价，涨租，有本事别买，别租房子 ...

There will be 3 groups of seller once CGT is implemented or about to be implemented:

Group A - existing property owners who have owned property "N Years" who will take the ride on increasing the 20% on the perceived CGT.

Group B- owners who bought when the CGT is already in place, they will sell by increasing 20% in the selling price, whether it is family home or otherwise as they are moved by the general trend.

Group C- ignorant sellers who sell in the transitional period (ie the period that is now) thinking the property is going to tank,  they will discover the market reality is not what they think it will happen.

Contrary to common belief, haha, there is no free lunch for Labour to introduce this tax, they will get the money from the property owners, the property owners will get it from the end consumers / first home buyers / new immigrants etc. Auckland will become more and more expensive, that is all.



* Milton Friedman's economic theory and analysis is well respected and he was the Nobel economic prize recipient.

Eric好颓废

Agree, when you looking at sell of GST registered properties, all of their GST, no-exception, are paid by the buyer:
Asking $$$$ + GST (if any)

After CGT involved, it just changed to:
Asking $$$$ + GST (if any) + CGT (if any)

The "Fair" Labour emphasis is absolutely unfair to people who work-hard and pay the tax to feed the lazy ones.

To realize the over-committed benefits, red party has to grab more TAX from our pocket, yet who take care of bill? They wont tell you the fact...