Capital Gains Tax A Bad Idea

A capital gains tax is an inefficient envy tax that will do nothing to improve housing affordability, ACT Leader John Banks said today.

“Only Labour and the Greens would try to make something cheaper by adding a tax to it,” Mr Banks said.

“Australia, Canada, and the United States all have nationwide capital gains taxes and all have had bigger national or regional housing bubbles than ours.

“The biggest factor driving up the cost of housing – especially in Auckland - is the lack of land available for new residential housing. As long as councils continue to artificially restrict the supply of land via urban limits, land, and therefore houses, will always be more expensive than they otherwise would. A capital gains tax won’t change this.

“Government should focus on making it easier to build more houses by preventing artificial restrictions on land and removing red tape around building permits, rather than taxing the houses we already have,” Mr Banks said.

ENDS

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