New Tax Rule 'Unlikely to Have Any Impact' - Tax Expert

The Taxpayers’ Union is critical of the Government’s capital gains tax budget measures, which were announced yesterday, claiming that the measures will cause more complex tax rules but have little effect.

The view is supported by Robin Oliver, a former Deputy Commissioner of Inland Revenue responsible for tax policy, who says:

“The proposals announced by the Government are unlikely to have any impact on the price of housing. Australia had a similar two-year rule before it introduced a full capital gains tax. Both were ineffective at reducing house prices.”

“All we are likely to see happen is that two years becomes the benchmark with gains treated as tax free if held for twenty-four months as happened in Australia. Even when there is a need to sell early there are many ways to avoid the tax such as deferred settlements with right to occupy.”

Robin Oliver was Deputy Commissioner of New Zealand’s Inland Revenue Department from 1995 to November 2011 and prior to this had served in The Treasury in a variety of roles and also worked as a consultant in the private sector. For services as Deputy Commissioner he was appointed by the Queen as a Member of the New Zealand Order of Merit in the 2009 Queens’s Birthday Honours List.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“The new rules appear to be more political posturing than a solution to housing inflation. The result will be a higher tax burden but not a lot else."

ENDS

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