Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

CGT valuations would pile on costs, benefit no-one

Simon Bridges - Leader of the Opposition

12 March 2019


Valuing every single business, farm, rental property or family bach to comply with a Capital Gains Tax regime would impose billions of dollars of costs on New Zealanders while benefiting no-one apart from valuers, Leader of the Opposition Simon Bridges says.

“The Tax Working Group recommends small businesses, rental properties, family baches and farms be subject to a Capital Gains Tax (CGT) on all gains made after April 2021. As a result, eligible assets without an up to date market value would need a new valuation.

“Valuations don’t come cheap, especially for business owners who want a value robust enough to stand up in court if challenged by the IRD. If every small and medium-sized business owner in New Zealand had to pay for a new valuation at say $10,000 apiece, the cost to the wider economy would be about $5 billion.

“Remarkably, that’s roughly how much a CGT is projected to raise in its first four years. That isn’t fiscal neutrality, it is economic stupidity. It adds costs just to tax growth.

“Every small business owner, farmer and property owner would want to maximise the valuation on ‘valuation day’ to limit the tax they have to pay on future capital gains. Such an incentive would ultimately undermine the credibility and fairness of the tax system.

“Other proxies for assessing the valuation of properties - such as local authority rating valuations (RVs) – are unlikely to be used as they typically understate the true market value and would therefore increase any future CGT.



“Mass automatic valuations have also been suggested as a way to avoid the compliance cost of valuations, but these should be ruled out because they would inevitably create significant errors and inequities in some cases.

“The huge compliance costs required to implement the recommended CGT are yet another reason why it would be disastrous for the New Zealand economy.

“National believes New Zealanders should keep more of what they earn and will fight the Government’s proposed tax grab every step of the way. We will repeal a Capital Gains Tax and we will not introduce any new taxes in our first term.”

ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Pike River: Families Welcome Opening Of Drift

The group representing 29 of the Pike River Families - the Pike River Family Reference Group - has welcomed the unsealing of the mine at a private family event this morning...

“Watching those doors open and seeing the light enter that dark tunnel for the first time in years was incredibly emotional. We’ve known we are going back in for a year now, today it feels like it.

“This is the start of a journey that will end with truth and justice.” More>>

 

Auckland Harbour Bridge: New Design For Walking And Cycling Crossing

The NZ Transport Agency has released plans for its preferred option for a shared path over the Auckland Harbour Bridge which will transform walking and cycling not only across the harbour, but throughout the city. The Transport Agency says its preferred ... More>>

ALSO:

Shaw First Reading Speech: Climate Change Response Bill

Madam Speaker, today we begin the task of amending the Climate Change Response Act [2002], to fulfil the commitment that we have made, as a country, to limit global warming to no more than 1.5 degrees Celsius above pre-industrial levels. More>>

ALSO:

Report Released: Harmful Behaviour In Parliamentary Workplace

Rt Hon Trevor Mallard today released a report containing the findings and recommendations of the independent external review into harmful behaviour within the parliamentary workplace. More>>

ALSO:

Housing: More Unsold Kiwibuild Houses Bought By Govt

The Crown underwrite for unsold Kiwibuild homes has been triggered for a second time. Now lack of sales in Mike Greer's development in Canterbury and Auckland means the government has had to buy back seven more homes. More>>

ALSO:

camouflageGordon Campbell: Why We Shouldn’t Genuflect To Security

Reportedly most (and possibly all) of the Royal Commission investigation into the Christchurch mosque shootings will be closed to the general public and to the media… More>>

PM's Post-Cab: Pike, Bullying, Carbon...

Prime Minister Jacinda Ardern began her post-cabinet press conference by announcing that the zero carbon bill would have its first reading the Parliament this week. More>>

Budget Announcements: Family And Sexual Violence Response

The family and sexual violence package, which sits across eight portfolios, is the result of the first ever joint Budget bid from multiple government departments. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels