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Scrap the Bright Line Cap


Tax Justice Aotearoa supports the call from the Green Party of Aotearoa New Zealand to scrap the five-year cap on the Bright Line test, so that investors who sell a residential property that is not their primary home pay tax on their profits.

Louise Delany, Tax Justice Aotearoa Chair says, “Every person deserves a warm, safe house to live in with dignity. Right now, distortions in our tax system mean that hundreds of kiwi families can't get a home of their own."

Contributing to this problem is the fact that property investors pay no tax on the income they gain when they sell a house after five years. This isn’t fair.

“Just like we all pay tax on our income, so too should property investors”, says Delany.

On top of this, our people in government are losing important revenue from taxing investors that could be spent on building social housing, fixing our leaky water pipes, greening our cities, making public transport free, and improving our hospitals and schools. Meanwhile, property investors benefit from all of these public goods, but do not contribute their fair share to getting them.

“Our tax system is an expression of sharing and we can use this system in better ways than what we do now to make sure everyone in our country can flourish. One way of doing this is to scrap the bright line cap and we urge the Government to take-up this policy.”


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