Niseko direct flights gone? Real estate impact?

[tripitaka 0]

It is intersting though. By the way, the BBC did a profile on Niseko and Rusatsu last night. They talked about the booming property development. One of the foreign marketing managers at one of the resorts hinted at the need for Singapore and Chinese skiers to keep things "bubbly." They also talked a little negatively about the lop-sided balance between Aussies and local Japanese.

[Fattwins 0]

LOL

[HelperElfMissy 42]

 Originally Posted By: Fattwins

If the foreign investors decide to sell then things could go south in a big hurry. The number of Japanese that would swoop into the market is very small. That said the economies of China/HK/and Auz are still pretty strong so this shouldn't be a big problem. Also as most investors seem to have paid with out right cash rather than hedging and taking loans, there would seem to be a less likely chance of panic selling. (You can slap me if I'm talking out my arse)

No slapping needed! I think you are right on the money with that statement.

The majority of investors with one property have bought without financial hardship and because they want to USE it. There might be limited panic selling if the economy dives because some of thier other investments at home might need propping up with the unencumbered capital sitting safely in Japan.

However just heard on the grapevine of a friend of hubby's who bought in Japan last season, bought another this season, but is cashing out of his property in the snow in Aus. There might be an adverse reaction in property prices in the Aussie snow if others are following suit...

However it goes..some people do well, others get burned. Stock market is the same, for every bloke making a killing there is another with his whole super at the hands of fund managers that erased $50,000 this year. If you are looking to make a motza, then there are better value buys than Niseko at this stage (the time was 2 or 3 yr ago!), but if you are looking to lifestyle - that is another matter.

[NoFakie 45]

The guys are right that you can claim depreciation of real estate against tax and that the period and amount depend on the construction of the building. You don't need super expensive legal advice either to get it either. All accountants know about it.

 

Its being phased out, but the mortgage tax relief for an ordinary salaryman just buying a house was also very high just a few years ago. You could get 1% of the loan a year for ten years in tax relief, or say 300,000 yen a year for ten years off a 30 mill loan. That's getting on for three free mortgage payments a year. That's tax relief, not simply a reduction in taxable income.

 

In Japan, I heard the capital gains tax is 39% if you sell property within five years, or 20% thereafter. Its a bit savage if you live overseas and don't get the other benefits Stunts and everyone has mentioned.

[stillnoprogress 0]

 Originally Posted By: Kingofmyrrh

 Originally Posted By: tripitaka

SNP, I asked a friend who owns an apartment building in Japan for investment purposes, and he doesn't know anything about being able to claim depreciation as a cost for tax rebates. Also, you cannot do it in NZ for property investment, but you might be able to do so if you are running a business of which the building/property is not the core business, i.e., a restuaurant.

You should probably take into consideration the fact that in Japan being able to depreciate structures like this is not a glitch - it reflects the fact that they really do lose value and after reaching a certain age can actually be considered as negative as it is accepted that anyone who buys the land/structure package will have to pay to rip it down. In most oher countries I know of buildings just don't lose their value like this so it makes sense that similar rules may not apply.

buildings everywhere in the world depreciate - this is in no way japan specific. When you buy a house (anywhere), you are betting that the land appreciates. At best the value of the actual structure doesn't lose value... this is not always the case but 95% of the time it is. being able to write off your annual depreciation against taxes is definitely possible in the US and in OZ and i'm sure in most other places in world. not claiming it is like not charging rent. in japan the schedule just happens to be more aggressive than most places as far as i can tell.

[tripitaka 0]

Thanks Wiggs. Nice to hear some specifics. I would imagine that any tax relief in any form is different for buying your own home and investing in a property for gain (in Japan, that is).

 

SNP, thanks for the info about the U.S. and Oz. I'd imagine many people in the U.S. could put in some nice depreciation claims right now.

[tripitaka 0]

SNP, would that mean the sub-prime crisis is not so bad for property owners because they will be able to claim losses against taxable income?

[HelperElfMissy 42]

Correct me if I am wrong but that would not be the case.

In the Sub-prime example the losses in the property sector will be on the land value ... I think the only componant you can depreciate is the building value.

 

An investor might be able to claim a loss on property if he sold that property, realised the loss and then offset those losses against his taxable income...but unless the property is sold the loss is purely theoretical.

 

For example - while we were enjoying the big N our one remaining stock holding wiped $50,000 off our assets in two days. Needless to say the husband was a grumpy pants for a while. However by the time we sold out, when we were back in Oz, we were $10,000 up. So do we get to claim the loss while we were on holiday .. no ..it wasn't realized. We actually have to pay a tax on the gain. Similar for property investors.

 

Sadly many of the people hurt by subprime don't have the kind of income level to see any tax benefit from this kind of loss, and I do believe that even if they did - it would need to be an investment property not a primary dwelling (as these are exempt from CGT and also the depreciation/loss side of things).

 

This is how I understand it - with my basic knowledge base. Correct me if I am wrong.

[tripitaka 0]

Mama, at least the property investors might be able to make a claim on the depreciation of the building. The poor banks don't have the same luxury.

[HelperElfMissy 42]

Poor Banks!

 

Ok so that was my first reaction. I have a love hate relationship with my bank. Really I think that most banks with trading capabilities will be passing as much as possible on to customers - those who crumble - I feel for the employee's, and the customers whose savings will be wiped out, and whose debt is called in.

 

Banks are supposed to be conservative. Share Market trading is supposed to be higher risk. Why were the banks swimming in the wrong pool when the water got drained?

[Rag-Doll 0]

>Banks are supposed to be conservative. Share Market trading is supposed to be higher risk. Why were the banks swimming in the wrong pool when the water got drained?

 

Because they're able to make more money in those pools than they can in their traditional markets. One of the many reasons the Japanese banks were having so much trouble a few years ago is/was(?) the prohibition against engaging in securities business. That left them with a relatively norrow asset and revenue base when the Japanese economy went pear shaped. Diversification - not such a bad thing.

 

Aust banks aren't really affected by the sub-prime problem per se, their problem is that they and some of their big customers raise capital in the US. The credit crunch in the US has meant that this is now quite difficult to do. Those that were doing so in the past are now facing some pretty high costs, ala Eddy Grove's ABC, ALLCO, et al. As these customers faulter, the local banks that helped fund them are also exposed, in addition to their own funding problems. So, it is sort of sub-prime related as this helped bring on the credit crunch in the US but it sort of isn't as well.

[stillnoprogress 0]

i think you're still confusing depreciation from an accounting perspective with losses, but anyway, assessing the tax benefits from the subprime crisis is not only completely pointless but it's starting to feel a lot like work. in summary triptaka, i think it's hard to say that the aussies have no idea about japanese property etc when you have no idea how they are financing it, what the yields are, and if they are able to offset taxes (and potentially their mortgages) etc through depreciation. saying that japanese land prices have been sh*tty for the last 15 years is stating the painfully obvious, but (as i pointed out earlier) things feel like they are finally starting to turn. personally agree that niseko pxs are too high, but Richard Li doesn't seem to think so and he's way more successful than me (and i bet he's got a better accountant).

[tripitaka 0]

SNP, well depreciation is depreciation. I think of it as completely different from "losses" or expenses, i.e., loan repayments, maintenance, repairs, etc. But assuming depreciation is tax deductible, it's in the property owner's interest to take advantage of it.

 

And you're right, I don't really know much about Niseko property and its future potential. It's safe to say that one should look at property from a conservative position.

[thursday 1]

Progress, Richard bought at a very reasonable price so they say. Infact he's still grinning. But maybe that's 'cos he has a new piece of fluff.

[Kingofmyrrh 0]

 Originally Posted By: thursday.

Progress, Richard bought at a very reasonable price so they say. Infact he's still grinning. But maybe that's 'cos he has a new piece of fluff.

Is the new fluff worth looking at? We need to get this thread onto a more interesting direction.

[tripitaka 0]

Yes, this needs to be put to bed. I've received the following from an apartment building owner in Osaka.

 

"Tax relief is obviously not the same as corporate depreciation. Whatever anyone says, there isn't any tax relief for investment properties in this regard."

[Kingofmyrrh 0]

Not tax relief. Deductible from income.

 

Pictures of girl please...

[tripitaka 0]

For all the Kiwis out there, you can claim depreciation (by the Trip definition) on investment properties. However, what you claim has to be paid back if property is sold, so many people owning residential rentals don't bother.

[thursday 1]

I said earlier in the year that my friend who bought up their quite recently would perhaps achieve 100 nights' rental for his place.

 

Well from talking to him this evening over lots and lots of wine and fine food, he managed 90 days. His rate was USD1,000 a night and will be revisited next season.

[tripitaka 0]

USD1000 a night! Obviously not at the budget end of the market. However, with the way the dollar is going, they might want to start asking for yen or Aussie dollars.

 

Taking in 90K for three months is pretty impressive. You'll be hard pressed to get that in anything but the top real estate in the best cities in the world.

[Go Native 70]

There are penthouses in Hirafu going for around AUD$1,500 per night next season. The most expensive place I know of is a 6 bdr house going for around $2100 per night.

[tripitaka 0]

Those prices would challenge prime real estate right off the lifts in Aspen and Vail!! Crazy.

[Go Native 70]

And it's the top end that books out the quickest...go figure!

[Peter North 0]

Will there be any budget left soon?

[thursday 1]

I reckon 343 would be the budget line. Anything south of Seicomart would still be affordable.