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New property taxes will not be supported

New property taxes will not be supported

Property Council says it will be the commercial sector that is left to foot the bill if the Government endorses a number of options being considered by the Victoria University Tax Working Group, including the introduction of property and land tax.

Property Council has serious concerns with the direction Government may take to recoup funds lost by plans to lower the corporate tax rate with the Tax Working Group looking at alternatives such as increasing the rate of GST, introducing Stamp Duties, Land Taxes, a Capital Gains Tax and changing or even ending depreciation rates on commercial property.

Property Council chief executive Connal Townsend says a number of these options, particularly Land Tax and not allowing depreciation, have a significantly adverse affect on New Zealand’s property owners, investors and the wider development community.

“These taxes will penalise property owners and investors by either imposing costs or becoming a barrier to new or further investment.”

He says if depreciation is no longer allowed, it reduces the level of ongoing investor interest in existing buildings as well as discouraging development of new buildings.

“It will be harder to attract long term tenants and the number of run down commercial properties will rise, resulting in more unattractive, unwanted buildings.” He says Land Tax is a completely inefficient form of taxation.

“In the past sectors such as farming and retirement villages have been excluded on an ad hoc basis, leaving the commercial sector to largely foot the bill. This usually results in simply passing the additional costs onto tenants.”

Mr Townsend says if the reforms go ahead there would be no incentive to build sustainable, green buildings.

“All of the positive work that has been done in New Zealand in terms of Green Building will be undone. There would be no motivation to follow the example of investing in retrofitting like we have seen with cities such as Melbourne.”

ENDS

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