The Left try to solve problems created by their own policies
Thursday, 27 March 2014, 3:52 pm Press Release: ACT New Zealand
The Left trying to solve problems created by their own
policies
ACT Leader Jamie Whyte
The
Greens today claimed that the appreciation in Auckland
property prices shows that a capital gains tax is needed.
They claim that that the profits earned from investing in
rental properties “draws more and more money into the
market, pushing up prices at an unsustainable rate”.
Taxing the capital gains on rental properties would
supposedly discourage this investment and bring house prices
down.
This ought to strike The Greens as strange.
Investment should push prices down, not up. If the returns
on rental properties are very high, profit seekers will
build new rental properties in an attempt to capture a share
of them. This will increase the supply of housing and bring
prices down. That is how markets normally work.
The
Auckland housing market doesn’t work this way because
restrictions on land use, of the kind favoured by The
Greens, make it hard to build new homes. As so often, the
Left recommends meddling in markets to solve problems
created by their prior
meddling.
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