Dunedin sharebrokers are not holding their breath in anticipation of being flooded with calls from people with money to invest after the Government's tax changes come into force on Friday.
Forsyth Barr broker Tony Conroy expected very little impact on shares and interest bearing securities.
He believed most of the personal tax cuts would be eaten up through increased costs on fuel, energy and food.
"I don't think people will generally have extra money in their hands to do anything with."
However, there was the prospect of changes in the property investment market, he said.
The Tax Working Group noted that $200 billion of investment in rental housing generated net rental losses of $500 million and $150 million in tax revenue losses in 2008.
It also noted that loss-attributing qualifying companies were one of the main mechanisms used by investors.
The so-called LAQCs are companies with a special tax status that enables losses to be offset against shareholders' personal incomes.
Mr Conroy said his view was the changes to the depreciation rules increased the level of tax investors had to pay"For some investors, property may be less attractive from a tax perspective.
This may make some investors focus more on the quality of the property and cash flows rather than the aggressive tax-based structures that have attracted some investors in the past."
Craigs Investment Partners broker Chris Timms said what he expected to happen and what he hoped would happen were very different concepts.
He hoped people would use the extra money from tax cuts to pay down personal debt rather than it being consumed.
If people had surplus funds they could contribute to their savings schemes or increase their mortgage payments.
Otherwise, the money would be lost.
However, what he expected to happen was people would spend the extra cash.
"It comes in a weekly amount and is not like a lump sum. It will be absorbed into a household budget," Mr Timms said.
The tax rate changes for PIEs (portfolio investment entities) could make it attractive for people on higher incomes to increase their investments.
The PIE tax rate falls from 30% to 28% on Friday.
That is the maximum rate of tax payable on investments made through a PIE and represents a 5c in the dollar tax saving for someone earning more than $70,000, compared with investing directly.
That still provided a significant incentive to invest through a PIE, he said.
The company tax also falls on Friday to 28% from 30%, before planned changes in Australia.
Deloitte Dunedin tax partner Peter Truman said there was still an incentive to earn passive income through a company structure but the saving was available only so long as the income remained within the company, or a wider range of companies.
Once the income was required for private spending, rather than reinvestment, then the 5c in the dollar tax saving might be lost as the income was distributed to shareholders.
"Use of companies will still be attractive where there is a significant amount of investment income which is going to be retained in the company structure for a lengthy period.
"Otherwise, the compliance costs are likely to absorb the initial tax savings available."
The trustee income tax remained at 33%.
The flattening of tax rates reduced incentives to shelter income through trusts because of the trustee tax rate and the top individual tax rate both on 33%.
Trusts did provide flexibility on where income was allocated from year to year and there would still be many valid non-tax reasons why a trust might be used - such as creditor protection, Mr Truman said.
