Labour tightlipped over capital gains tax

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Labour tightlipped over capital gains tax

3News NZ

Labour leader Phil Goff says next week's policy release is not about tinkering (NZPA file)

Labour leader Phil Goff says next week's policy release is not about tinkering (NZPA file)

By Duncan Garner

The Labour Party will unveil its new tax policy next week and 3 News understands it will target property speculators who have pushed up house prices.

Labour is planning a capital gains tax on housing, although the family home will be exempt.

It is a way of taxing those who have made big money – but paid little tax – in property deals.

Around 200,000 New Zealanders own second houses like holiday homes and rentals.

For years they have been tax free, meaning if you sell them and make a huge capital gain you can pocket the profit.

But 3 News understands Labour wants to take a slice of that profit by introducing a capital gains tax.

“I think we'll look widely at how we can help Kiwi's achieve the dream of home ownership,” says Labour leader Phil Goff.

A capital gains tax is a tax on the profit you make when selling the rental or bach. It is expected to raise $4.5 billion but could take years to get to that level.

Mr Goff does not want to give too much away ahead of the official release next week.

“I'm not ruling anything in or out at this stage, you will just have to wait for the announcement, until we've completed the policy progress,” he says.

Prime Minister John Key says a capital gains tax would be a disaster.

“They're hideously complex and people spend their life dealing with their tax accountants,” he says.

Dozens of developed countries have capital gains taxes, including Australia, which has had the tax for 20 years and exempts the family home too. The Greens say it is well over due.

“I think it would have been better to have this capital gains tax at the beginning of the boom, at the start of the first Labour Government, but if they have learned then that's progress,” says Russel Norman, Green Party co-leader.

Labour will also release its income tax policy next Thursday too as it attempts to raise revenue to pay for some of its promises.

It will include a new tax on high income earners.

Labour also looked at a land tax and considered a financial transactions tax targeting banks, but ruled out both. Mr Goff has told 3 News next week's policy release is not about tinkering and it will not please a whole lot of people.

It is certainly a bold and courageous move to target property speculators who have operated in a tax free haven for decades. Putting up taxes is never popular and not easy to sell to voters and Mr Goff should prepare for a backlash.

3 News

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Comments

7/07/2011 5:02:17 p.m.

jude wrote:

Have read Allan's post and totally agree. What a well thought out opinion.

6/07/2011 4:39:38 p.m.

ian wrote:

"Go Phil," Labour seem to be the one who is prepared to take face on, the ever growing debt we all face as a nation.
The conflicting claims by various,all have self interest as motivation.
We should "suck and see"-but taking actioun is essential.

6/07/2011 9:20:03 a.m.

Mark wrote:

Heather perhaps if we spent money on education more wisely, and concentrated on people being able to speak and write English properly, we wouldn't have people like you who can't spell simple words. Probably too much time learning Maori instead?

As for being better of with 70% tax rates, NZ was on the verge of defaulting on its international loans, it took 6 weeks to get a telephone installed, you had no choice who you got your power from, you couldn't shop during weekends etc etc.

And wealthy paying their fair share? They already pay far more in dollar terms and many give their money away to charity as well.

I suggest perhaps you go and live in England or the USA if you want to pay more taxes for "pets sake" as you say. Oh no hang on you want other people to pay more tax don't you? Not yourself. How generous of you.

Taxation is theft. No different than someone pointing a gun at you and demanding your money from you. Is just the government doing it with the threat of prosecution.

6/07/2011 7:58:33 a.m.

Brad wrote:

Alan, right on the money mate.

6/07/2011 12:08:10 a.m.

Mark wrote:

I m sick of people investing in property in residential housing, they are cheating the future generations of New Zealanders out of the traditional kiwi lifestyle by making house prices unaffordable, of course if you can pay off a mortgage for 50 plus years of your life you might be able to buy a house. I know one foreigner here who is milking the property market for all its worth and they are just going to bugger off back home once they are done, so all that money will be going overseas courtesy of New Zealand.

5/07/2011 11:24:36 p.m.

katrina wrote:

You are spot on Allan

5/07/2011 11:08:29 p.m.

MrMan wrote:

What about people fart tax? What about foot wear registration tax? what about hairy legs tax? Wearing a hat tax. Wearing no hat tax? Eating cheese burger tax. Walking down the street tax Standing around tax Cell phone tax Long eye brow hair tax. My cow's fart tax <-- this one is real right?

5/07/2011 10:42:16 p.m.

kane wrote:

Should of been done decades ago...

5/07/2011 9:38:18 p.m.

Mark wrote:

NZ already has a capital gains tax in the the tax laws. It's just not called that and IRD don't enforce it. We don't need another law for something which is already covered by existing tax legislation. Just make IRD get off their butts and do their job.

5/07/2011 9:33:11 p.m.

heather wrote:

look guys at least labour is honest we have to pay for things , nationals idea is borrow , borrow and borrow some more these things have to be paid for we just cant keep putting evreyting on the credit card . england the usa have a capital gains tax for pets sake . but no the nats just want to plunge us ferther and ferther into debt . and selling our gold and silver that make this country good profits for a song is not a good idea its been done all ready it does not work .evrything they privitised now costs a small fortune to use . remember selling the power companys they said would lower power prices lol , nz are you realy so gullible . its time the elite wealthy paid their fare share because the poor and the middle class have nothing left to give and thats just the reality . the elite wealthy once paid 70% in the dollar tax in the 50s and 60s the best times we ever had . we shave 40% of their tax over the decades now look at us and the rich still moan and cry povity its discusting greed thats all it is .better wake before the entire country has left foe aussie etc . national can keep its low wage country .