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Which House is worth more?

by Whaleoil on January 25, 2010

David Farrar doesn’t think there should be depreciation on building. His reasoning is that houses go up in value and not down so it is silly.

The removal of the ability to claim depreciation on buildings as a taxable expense is long overdue, considering almost all buildings actually appreciate in value.

So here is a little test for you. Which house if more expensive? House A? or House B?

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  • erikter

    The Penguin is parroting the official Beehive line until he gets new orders from his masters. Do not bother with Farrar, the lackey.

  • Cactus Kate

    Depends I guess on which has been used as a tinnie house or P lab!

  • http://www.cadlow.co.nz Spanish Bride

    Worth the same but the LAND underneath determines the value.

    • No Breaks

      So, given that wear and tear on buildings does not actually create an economic expense (because value is dictated by land), no deduction by way of depreciation should be available. Is that what you're saying?

  • http://intensedebate.com/people/The_Grizz The_Grizz

    who cares, they both look like shit!

  • Doug

    If house A was on Marine Parade Mt Manganui it would be worth about $2 million Dollars.

  • Michaels

    House A.

    My reasoning is house B is subdivided, lost most it's front section and has rubbish out the front.

    House A has a drive, a garage and a beach just behind it.

  • caleb

    none of the 2 houses worth more than when they were built?

  • coge

    House B. The neighbouring building to house A looks dodgy as hell & looks to be in a crap location.

    Show me a building that doesn't depreciate.

  • http://www.beretta-online.com Glenn

    There's a house in photo A?

  • ohTheIrony

    it depends on the class of the neighbourhood as well, if the neighbours houses are selling for alot, yours will have a higher value, if nobody can sell a house, then the value decreases.

    its called supply and demand economics

  • todd

    Pretty ovious that DF has never had a rental or he would never come out with a statement like that.Last year I sold 3 rentals purely because of damage caused by tenants that didnt give a fuck,if i hadnt spent $$$ they would be complete shacks after a few months.While it is true that the land value goes up unless maintenance is ongoing on the building will become uninhabital and try to sell that for a capital gain!.

    • mediatart

      Maintenance is a deductable from the income. Whats the problem. New paint new carpet etc all deductible.

      Its clear you dont understand what 'depreciation' is for. It not meant to be cover for 'wear and tear' for use of buildings. Its really just a legal fiction meant to cover replacement of the building. but the low rates , a few % means buildings have lives 50 years plus.
      Compare with cars , computers etc . They have to be replaced within a short time and have very high depreciation rates , some time as much as 50% per year.

  • Paranormal

    House B as it has the better views. They’re both around the corner from you?