Government finally beginning to see sense on capital gains
The Green Party is congratulating the Government for beginning to see sense on a capital gains tax, but is warning that
limiting it to properties sold within two years of purchase doesn’t go far enough.
“This is a welcome U-turn from the Government. Only last week they were saying that capital gains taxes don’t work, so
it is great they have changed their mind so quickly,” said Green Party Co-leader Metiria Turei.
"The Green Party has been putting pressure on the Government to tax capital gains and recognise the importance of
addressing offshore property speculation for years, so we're glad that John Key has bowed to this pressure even though
his solutions are still incomplete.
“The Government’s shift shows their arm has finally been twisted far enough to do something meaningful about the
Auckland housing crisis. But it is a half-hearted move that still largely protects property investors.
"A capital gains tax on all investment properties would help direct investment into the productive economy, helping Kiwi
businesses grow and create jobs.
“It isn’t fair that a low paid worker pays tax on all their income while property investors who sell their properties
after more than two years will still not pay tax on that income they make.
“The Green Party has advocated for a capital gains tax, excluding the family home, for years. It is a sensible policy
that can help to take some heat out of the Auckland housing market. We are pleased National is partially getting behind
it.
“Limiting the policy to sales within two years of purchase takes the wind out of the policy’s effectiveness. National
may have set up a system of perverse outcomes, like properties being sold after two years and a few days to get around
the rules. And in Auckland, during that extra time the property's value may continue increasing by $1000 a day.
“A full capital gains tax would be more effective and fairer. National's new policy still protects investors and foreign
speculators who hold onto homes for longer, and they still won’t need to pay tax on the profits they make.
“The new rules around offshore investors requiring a local bank account and IRD number are welcomed. We urge the
Government to utilise these rules to finally start gathering proper information about the level of offshore purchasing
of houses.
“We believe the Government should take further steps to restrict offshore investors’ negative influence on the housing
market.”