Q+A: Arthur Grimes interviewed by Michael Parkin
Q+A: Arthur Grimes interviewed by Michael
Parkin
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Fiona Cumming
Motu Research Institute
Economist Arthur Grimes - difficult to say whether a land
tax on foreign buyers would cool the housing market. On
Q+A last week Prime Minister John Key suggested a land tax
targeting non-residents. Mr Grimes told TV One’s Q+A
programme it becomes more difficult once you try and itemise
just a particular section of the public that you apply a tax
to. ‘Well, land taxes in general are a very sensible
idea and have an effect on house prices. If we introduce a
generalised land tax on everyone, then house prices would
fall. We know that. Whether it is just on foreigners –
then we start getting into issues of how you define that,
what’s a foreigner, what’s not and what are the details
of the tax. It’s much more difficult to say. ‘The
difficulty comes when you’ve got trusts, when you’ve got
companies – what’s the definition of a foreign company,
etc, all these sorts of things – people buying on behalf
of others.’ Mr Grimes told Q+A a generalised land tax is
basically the same as local authority rates. ‘Local
authority rates – we already have a land tax in that form,
right? You just pay a certain percentage every year of the
value of the land that your house is on. Now, if people know
that that is going to increase, then they’ll bid less when
they come to buy a house, because there’s a liability
attached to that. So it’s a very simple, straightforward
tax that we could implement very soon.’
Q+A, 9-10am
Sundays on TV ONE and one hour later on TV ONE plus 1.
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11:59 AM (3 minutes ago)
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