NRT: Why foreigners are buying up New Zealand

Written By: - Date published: 8:20 am, August 22nd, 2014 - 5 comments
Categories: overseas investment, tax - Tags:

no-right-turn-256Reposted from No Right Turn.

Because our lax tax system lets them cheat on their taxes:

Why would an overseas buyer pay more for an asset than a New Zealander? Is it because they can accept lower returns on capital? Perhaps. Is it because they can sweat the asset more? Again, perhaps. But Chalkie reckons one reason stands out – tax.

There are huge tax advantages available to overseas investors that simply cannot be accessed by locals. They crank up the returns available to foreign buyers and make New Zealand assets worth more to overseas owners than to New Zealand residents.

The article uses Wellington Electricity Distribution Network, which has paid virtually no tax due to being piled with high-interest, related-party debt to a company in a tax haven by its foreign owners, but the practice is apparently widespread. The result is both that we get bought out of our own country because NZ assets are more valuable to foreigners than they are to us, and meanwhile our government gets starved of revenue by tax-cheating sociopaths.

There is an easy solution to this: put the effect on taxation in the Overseas Investment Act. If foreign ownership would see less tax paid in NZ, then that’s a reason to refuse a transaction. Simple.

5 comments on “NRT: Why foreigners are buying up New Zealand ”

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  1. infused 1
    22 August 2014 at 8:42 am

    Already been posted

    • Lanthanide 1.1
      22 August 2014 at 8:47 am

      The topic has been posted, but NRT’s post on it, which has a very simple and obvious solution to the problem, has not been posted.

      I see you’d rather cover up issues than talk about them, though.

    • RedLogix 1.2
      22 August 2014 at 9:54 am

      So I take it you fully support overseas business owners being able to access a massive tax advantage that New Zealand owners cannot?

      Or do you just have nothing to say infused?

      And while this has been posted before – I have yet to see anyone on the right say anything about it either:

      Conclusion

      The costs of the consistently publically owned water supplies increased by a mere 17.5% which is less than the rate of inflation, while the cost of privatised electricity distribution increased by 295%, largely to service the grossly inflated capital value.

      Fundamentally, water and electricity networks are absolute and unfettered monopolies which supply an essential service. Their use cannot be avoided by the individuals and communities they serve and their funding is akin to an unavoidable cost which is the nature of a tax. It is not surprising that a foreign government has bought into the electricity network. It was madness to sell it in the first place!

      http://www.scoop.co.nz/stories/HL1111/S00231/water-and-electricity-in-the-wellington-region-1990-to-2010.htm

  2. disturbed 2
    22 August 2014 at 8:48 am

    We are absolutely astonished the opposition parties haven’t come out on both of these major plank subjects as policy issues they will address,

    Greens talk about saving our urban and natural environment and National are destroying it fall force with their roads only policy.

    And labour and NZ First both are supporting rail in the months before.

    Especially the rail asset that was bought back for us all by the last Labour Government?

    1/ Buying of NZ by foreign asset grabbers

    2/ And the state of our failing rail system after it was bought back as another two election planks.

    Both of these are severely hurting the other provinces outside Auckland as Auckland is taking all the rail funding for their passenger rail and the other provinces are losing their freight rail at the same time.

    Maybe a they could point this out and the possible running down of rail as a ploy to set the asset up for yet another repeat Tranzrail/Kiwirail asset sale.

    Come on Greens Labour pick these up now to win the “other part of NZ”

  3. Rich 3
    22 August 2014 at 8:27 pm

    I suggested removing the tax claim on interest. But I know that they’ll then go looking for something else like Management Fees or some such. Still it’s part of a bag of changes that are needed.

    I’d make it that if you buy land here a condition of keeping it is that you have to spend say 9/12 months here. Because at the rate they’re being sold, future sales won’t be advertised here. Branch offices don’t make money for themselves, they provide it for head office. I think I saw 12 billion mentioned as the annual difference between out and in for NZ, and that’s 12 billion on the wrong side now, imagine a few more years of rubber stamping overseas investment requests.