Capital Gains Tax in all but name

“Tonight, we have a capital gains tax in all but name, and the National Party is as responsible as the Government,” says ACT Leader David Seymour.

"Tonight’s passage of the Taxation (Employment Income and Remedial Matters) Bill means homes bought and sold within five years will be subject to tax on capital gains.

“The five year bright-line test means that many New Zealanders will find themselves paying tax when they sell a home.

"Amy Adams’ contortions on the Bill would qualify her for Cirque du Soleil. She tries to claim that a five-year bright line test is a stealth capital gains tax but the two-year bright line tax introduced by National was not.

"Adams leaned on the IRD’s report on the Bill, more for support than illumination. Contrary to her claims in the House, the IRD’s Regulatory Impact Statement does not say a two-year bright line test will better catch speculators than a five-year test.

“The lesson for National and voters on the right is this: taxes are like acorns, they grow. You don’t fight taxes by introducing them and then complaining when they grow.

“The two-year bright line test should never have been introduced. There is no evidence that a capital gains tax charged over any length of time will reduce house prices as claimed. Some of the worst housing affordability in the world is in Sydney, Vancouver, London and Los Angeles, all cities with capital gains taxes.

“This a sad day for New Zealanders and the quality of our policy settings. We now have a more complicated tax system with no useful benefits to New Zealanders”, says Mr Seymour.

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