Another Housing Tax Bill Progresses

Another leg of the Government’s policy on the tax treatment of residential property purchases has been sent to select committee, but is expected to take retrospective effect before it returns to the House.

Revenue Minister Todd McClay said the Taxation (Bright-line Test for Residential Land) Bill would improve compliance for current land tax rules which were difficult to implement as it meant IRD had to make an assessment of someone’s intent when buying and selling land for profit.

It introduces a “bright” line” test to ensure those living in New Zealand and overseas paid tax on the profits when they buy and sell residential properties for short term profit (less than two years) would be captured by the tax law. The test would only apply to investment properties and not people’s main home.

Labour’s David Clark said the bill was another attempt by National to be seen to be doing something about housing issues while doing little. Labour would require all people buying homes in New Zealand to live here or build a new one.

The bill completed its first reading by 109 to 12 with NZ First opposed.

The bill was sent to the Finance and Expenditure Select Committee for consideration with a report back date of October 22. The motion to allow the truncated process to take place passed by 63 to 58 with National, Maori Party, ACT and United Future in favour

The bill as drafted will have retrospective effect from October 1 2015.

MPs then began the first reading of the Employment Standards Bill, which amongst other things deals with “zero hour” contracts.

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