Is a capital gains tax coming?

Posted by lindsay on September 29, 2014

Now the election is over and National was returned to government the threat of a capital gains tax for investors might seem like it is over.

Labour campaigned hard that they would introduce a capital gains tax, but National rejected the concept.

However there are schools of thought that the tax might have a place for sectors of the New Zealand property market.

Peter Thompson, Barfoot & Thompson managing director, told the New Zealand Herald that if there was to be any policy put in place from the new Government to discourage overseas investors, a capital gains tax (CGT) might work.

"We do need to protect our land and we do that already via the Overseas Investment Office and that's working and maybe that needs to be looked at a bit more and tightened up a fraction," the Herald reported.

"Do we need a CGT on overseas buyers if they're not living in New Zealand? I don't want to see any taxes go on but if there's one, maybe that's one way of starting."

Other things on the property wish list are a reform of the Resource Management Act and more control over local body charges.

Auckland housing developer Mark Hackshaw told the New Zealand Herald he wanted the Government to control local body charges and expressed desperation about massive cost rises creating residential subdivisions.

Ten years ago, reserve contributions to the council and water charges were $5050 per residential lot, he said, covering development contributions including roading and reserves, as well as sewage and stormwater charges.

"Now, it's $30,000-plus per lot. Surveyors' costs have increased, engineers' costs are up, it's a $15,000 minimum to the council [development contributions] and $15,000 for water charges minimum," the Herald reported.

"If National were serious about more affordable housing, they would look closely at getting councils to control their charges. They've gone overboard because they're worried about their backsides and litigation."