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Ring-fencing submission FAQs

Monday, February 25, 2019

Some frequently asked questions prompted by our latest call for all investor to put in their submission for the proposed law change to ring-fence rental tax losses are worth sharing. 

Before we delve in, a reminder that this Thursday is the last day to make a submission to or against ring-fencing tax losses. This is too important an issue for investors to stay silent on. Submission details and guide can be found here

Now let's get into the questions. 

Q: I thought ring-fencing is a done deal? 

A: No, not at all. There is still time to make your submission for or against. Submission closes 28th February 2019 and can be done here

Q: Looks like you have linked the wrong Bill! Can you double check? 

A: We did double-check and no, we did not link in the wrong bill. The Bill proposing to ring-fence rental tax losses (amongst other things) is titled the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill. Note that it is s49 which refers to ring-fencing of rental tax losses. It would seem that many readers assumed that we had sent the wrong bill for them to make submissions on simply because 'ring-fencing' is not mentioned in the name of the bill nor any section titles. The cynical side of us could not help but marvel at the insidiousness of it all by burying what is arguably one of the most controversial tax law change in recent times so deep inside a bill with an innocent-sounding name. If that isn't a good reason for all investors to mobilise together to speak up, we don't know what is. 

Q: I am for ring-fencing. Should I still make a submission?

A: Yes. There are other matters to make your submission on such as roll-out timeline and how the loss is to be preserved and carried forward. You are perhaps less incentivised to make a submission if you are agreeable to ring-fence tax losses but your inputs are still just as valid as those who are against. 

Q: Is there a template submission I can cut-and-paste using my name? 

A: No and we strongly caution against any plagiarising of submissions. Duplicate submissions are counterproductive and do not build goodwill between our community and policymakers. At best they will only be counted as one submission (despite being submitted by different names), at worst they can be ignored altogether. 

Apart from entering your personal details, you only have two boxes to fill out to make your submission. It doesn't need to be complicated setting out your personal views on whether ring-fencing should be introduced, how you, your tenant and the rental market will be impacted and any recommendations you have for the government.

Q: I am an APIA member. Isn't APIA already making a submission? Why should I make one too? 

A: Yes we are making a submission and you should too especially if you are against ring-fencing. Simply put, the stronger the voice of dissent, the more likely the policymakers will be swayed into action. We will be putting in one submission as an organisation but imagine the awesome power we have if all 1000 members put in your own submissions on top of that. 

Additionally, while we will be confidently coming out against s49, we are aware that not everyone shares our views. The ring-fencing proposal, in its current form, has the potential to transform the landscape of property investing in New Zealand for generations to come. It is going to be the difference between whether your own children will ever get onto the property ladder. Something this important shouldn't be left to a small committed few. Everyone with skin in the game should use this opportunity to speak up. 

Q: I am not an APIA member and I am against ring-fencing like the APIA. Why should I make a submission? 

A: For the same reason as above. In a democracy, numbers matter and your interests are only served when you show up. In addition, we are a membership-based organisation. When we speak, we speak on behalf of our members, not the Auckland property investor community at large. If you are all fired up reading about these issues and you are not already a member of your local Property Investors' Association, we strongly urge that you become a member to support our lobbying efforts. A substantial and unified voice is exactly what the investors' community needs at this point of the market and under this particular government. 

 

We hope these answers give you the clarity and prompt you to make your submission on ring-fencing. Remember, you only have until 28th of February 2019 to do so. 

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