GLEBE 2021

The Glebe

INTRODUCTION

It seems that the development at #7 which crowds two units on to a 300sqm site is detrimental to the value of the street which has Single House sites on the seaward side and denser Mixed Urban on the elevated side.

To benefit the whole, the multiple units on that side can all have great views and higher value living provided there is good planning.

NUMBER 9 POTENTIAL

The existing house is of good quality and great views and areas already exist to build new units at both front and back. Any replacement of this existing house with two new ones may be possible but is not necessary.

A driveway and services access already exists on the southern boundary. The existing house needs a small modification to make this possible to fully access the new rear site.

Other options

1. No height restriction exists on the rear boundary as Cook Street properties are a higher zoning.

   In fact height can be the full 11 metres to within 1 metre of the rear boundary

2. The serviced driveway could be used to make development of #11 easier for that owner.

3. If fully utilised #11 could use this concession to add one extra unit to its site as the first third from its frontage is severely constrained by the narrow frontage of 8 metres.

4. Any combination of sites would allow for easier height utilisation by both but is not essential for #9. All the benefits are for #11 and would be a valuable concession offered by #9 and based on services plus an extra unit.   

5. Option Without #9 agreement #11 can build only within the rear 35 metres of footprint. A new driveway extension would require the turning from garaging to waste 3 metres of buildable space that would be available by any combination with #9.

6. The existing house has no future so site value only is involved.

7. Without benefits provided by #9 there is a very restricted opportunity to get full value from this site.

MARKET POSITION

1. It is noted that recent sales of double lots such as 53/55 Patons Road achieved much higher prices than the individual sites could have done.

2. Thus on this information, #9 and #11 in combination has real value.

3. The Glebe is highly desirable and needs to hold its position despite the inferior proposed #7 units.

Australian shares

In the past the only Australian shares that I owned were larger companies like Mirvac (MGR) and Shopping Centres (SCR)
I got interested in Leaf Resources (LER) and it became a dog.
Lately some others of interest are Hazer (HZR) which has massive potential in producing hydrogen.
Others include Splitit (SPT) and Vulcan (VUL) which have surged for good reason.

More on Re-Balancing Owner-Occupiers against Investors

More on balancing Owner-Occupiers against Investors

RBNZ is giving consideration to making certain investors pay higher commercial rates but have problem with how investors can manipulate their borrowing
The Solution?
Assume ALL loans are commercial by placing a levy of perhaps 2% on the charged rate.
To balance this for an O-O credit back this levy where the O-O can prove occupancy for a minimum time each year.
An O-O can get some benefit for one investment unit by attaching a mortgage to the family home to invest in another property but this is very limiting.
The pressure from such action would ultimately lower property prices and benefit both O-Os and investors who would get a higher yield on fully owned  (unmortgaged investments)

An example
Property value $400k with mortgage $300K at 6%. Rent may be only $450 p.w and relatively already tops. Net return after rates etc is possibly only $3000 p.a.
A 2% levy would add $6000 to an Investor mortgage which would make a considerable difference to cash flow and also nett profit or loss, turning the investment into a loss.
For a proved zero O-O there would be no difference.
However with this in place the property price would fall  (less or no Investor interest) to maybe $350k over time.

At some point the Investor may be able to make a case to buy. Rents are relatively inflexible.
A renter may be able to consider buying with a lower deposit because the value has eased by $50k

FIF and Tax on UK Shares

Lloyds 9.25% Prefs (LLPC)
Calculation based on 10,000 shares

Current price 137.75p Value GBP 13775
FIF tax at 5% (based on NZ rate 17.5c/$)  13775 x .05 x 0.175       =  GBP120.53

Dividend 9.25% net  GBP 925  (Gross GBP 1027.77 less GBP 102.77 deducted at source)

Tax due in NZ in GBP base is GBP 17.76    (120.53 -102.77)

Convert at rate $1.96 the tax due is $ 34.81
Payable on income of $1813
That is 1.92%

The faults:
If there are other shares that pay less or nil dividend , then they are still taxed on their capital value when over $50,000 in total.

Allowing the Owner-Occupier to compete with the Investor

The INVESTOR has a very real advantage over the OWNER-OCCUPIER.
Deducting interest cost is not available to the O-O
How to change this assuming giving that advantage would cost too much Government tax revenue.

Well try this:

• Firstly allow the O-O to deduct 10% of their interest bill against tax on other income while at the same time giving the Investor only a deduction up to 80% against rent actually received.

• Change these ratios each tax year ( say to 20%- 60% then 20%- 40% and  then reduce each to 20% and finally 0%)

Any Investor who is already debt free will never be affected in any way.
House prices would even out at a lower level over time to more affordable values.
The deductible interest should be limited to a percentage of the actual rent income received.
Empty houses would receive nil tax relief.
Residential land available for subdivision should also be included

NEEDS TO BE TAX NEUTRAL FOR GOVERNMENT!