NZ facing harshest capital gains tax in the world

Author
Newstalk ZB,
Section
Audio,
Publish Date
Friday, 22 February 2019, 7:09a.m.
Prime Minister Jacinda Ardern and Grant Robertson.

New Zealand could end up with the harshest capital gains tax in the world if the Tax Working Group's recommendations are adopted.

Its final report recommends the Government introduce the tax - including gains from land, shares, business assets and residential rentals.

Staples Rodway tax director Andrew Dickeson told Tim Wilson there would be no indexation for inflation.

"There are very limited ways to basically sidestep the regime, so it does seem very, very harsh."

"There wouldn't be a start date when assets that you previously held wouldn't be in the net, so everything is coming in."

However, he said he doubts this will be the tax's final form.

"This paper has almost been prepared for someone to come through and be the good guy."

"There are just all of these opportunities for someone to go to the public and announce that they are going to make changes to make it more pragmatic, make it more competitive...all those buzzwords that they know the electorate are going to want to hear," he said.

When asked whether New Zealand actually needs a capital gains tax, Dickeson said, "I don't think the average mum and dad needs it".

"New Zealanders are not highly paid by overseas standards...so the one way that mum and dad could save for their retirement was to create a nest egg and that would typically be around a rental property."

"They could put some money away, pay that off over time, use their salary to basically pay the bills and get by, but they would know that when they turned 65 there was something there that they could sell [which] would fund their retirement."

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