Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Capital gains tax plan not geared for capital losses

The fact that the Tax Working Group wants to ring-fence capital losses shows that they haven’t come to grips with how a proposed capital gains tax would work when assets are losing value, Tenancies War spokesman Mike Butler said today.

“Property values have been increasing for a relatively long time so that the proposals released today appear to have assumed that prices will continue to increase forever, creating a goldmine for the Government”, Mr Butler said.

But the golden weather for investors is ending. The proposed capital gains tax comes on top of a raft of punitive changes for rental property owners which make property investment no longer attractive, driving property values down, he said.

Talk to any accountant. Now, many owners are unloading rental properties that have become loss-making liabilities and the Tax Working Group appears to have resorted to loss ring-fencing to avoid giving capital loss refunds to investors, Mr Butler said.

“It won’t be a matter of investors timing the sale of assets to their advantage,” he said.

“It will simply be a matter of investors selling for whatever they can to stop haemorrhaging cash to a loss-making investment,” he said.

We already have 116,000 negatively geared rental property owners who declare an average annual loss of $7138 who will sell if losses are ring-fenced if and when the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill becomes law.

Without those 116,000 owners, by the time a capital gains tax may become law the property investment environment will be vastly different than it is now with many selling at a loss, he said.

Weakness on capital losses is just one of the many problems with the proposal.

Capital gains will be charged at 33 percent for the majority of taxpayers one of the most punitive capital gains tax regimes in the world, and more than twice the rate proposed by the Labour Party at the 2011 and 2014 elections.

The announcement of the proposed new tax was badly timed and coincided with news that more than 10,000 people are now waiting for a state house when under the previous government it was around 4000, he said.

Where will renters live when rental properties will be even harder to find than now? Mr Butler said.

Stop the War on Tenancies is a group that since last October has been highlighting the evidence that successive governments have ignored while creating rental property policy.


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Housing Issues: Fairer Rules For Tenants And Landlords

The key changes include:

- Limit rent increases to once every 12 months and banning the solicitation of rental bids by landlords.

- Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement...

- Improve compliance with the law by increasing financial penalties and introducing new tools to take direct action against parties who are not meeting their obligations. More>>

 
 

Gordon Campbell: On The Farming Sector’s Persecution Complex

The narrative that our farmers are ‘doing it tough’ plays into a number of wellworn stereotypes ... More>>

ALSO:

corrections, prisonCorrections: Independent Review Of Prisoner Mail Management

The independent review into the prisoner mail system has today been released, with Corrections accepting all 13 recommendations and making a number of changes to strengthen the management of prisoner mail. More>>

ALSO:

IPCA: Unlawful Detention Of Teenager; Influence Of Investigation

The Independent Police Conduct Authority has found that former Inspector Hurimoana Dennis unlawfully detained an Auckland teenager in 2015, and improperly influenced the outcome of a criminal investigation into his own son in 2014. More>>

ALSO:

SOP For Gun Bill: New Measures For Modified Pistols

The new controls will • Prohibit short-barrelled semi-automatic rifles which currently are defined as pistols because they are shorter than 762 millimetres. • Introduce tighter controls over pistol carbine conversion kits… • Prohibit firearms which contain a part known as a centrefire lower receiver… More>>

'Culturally Arranged Visitors Visa': Fix For Marriage Visa Issue

Earlier this year Immigration New Zealand issued guidance to front line Immigration staff that made it significantly harder for people to get visas to visit their partner. That guidance no longer applies with today’s announcement. More>>

ALSO:

Conflict Of Interest For Key Member: Budget Data Breach Investigation Shut Down

State Services Commissioner Peter Hughes has today terminated the investigation into how Budget-sensitive material was accessed at the Treasury and appointed a new inquirer. More>>

RNZ Report: Mysterious Foundation Loaning NZ First Money

A mysterious foundation that loans money to New Zealand First is under scrutiny, with a university law professor saying although it's lawful, it fails to provide the transparency voters need in a democracy. More>>

Justice: Criminal Cases Review Commission Established

“We’ve seen how our justice system can very occasionally get things spectacularly wrong, even with rights of appeals, and there needs to be a chance for the innocent on the right grounds to seek a final review of their case...” More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels