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Capital Gains Tax will lift rents, add to living costs

A capital gains tax would lead to further rent increases and hurt those who can least afford it, National’s Finance spokesperson Amy Adams says.

“The Government insists it set up the Tax Working Group ‘to deliver fairness’ to the tax system but the TWG admits that a capital gains tax would see rents increase further.

“Other economists agree. Andrew Coleman from Otago University has modelled the effect of a capital gains tax and found it would likely lead to higher rents.

“That’s the last thing New Zealand families need when rents are already at record highs and the cost of living is rising. Many New Zealanders already have to stretch each dollar further and make hard decisions on how to pay for essential household items like groceries.

“One of this Government’s primary shortcomings is an inability to properly consider the consequences of ideologically driven policies.

“It has also refused to take any responsibility for rising rents. But a raft of poorly conceived policies are behind the recent spike in rents, including extending the bright-line test, ring fencing of losses, more burdensome regulations and the ban on foreign investment.

“All of these policies discourage private rentals and inevitably drive up rents. Rents have already increased by $30 a week in the past twelve months. That’s a rapid increase on the $12 a week average increase over the previous nine years.

“A capital gains tax will further compound these rent increases, something the Tax Working Group even acknowledges. There is growing opposition to a capital gains tax from sectors as diverse as the financial markets and farmers.

“National believes the New Zealand economy is in relatively good shape thanks to nine years of stable, sensible policies. We don’t want to see that unwound by a Government that isn’t property assessing the impact of its plans on hardworking New Zealanders.”

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