ON AIR: Kerre McIvor Mornings

9a.m. - 12p.m.

Tax Working Group report: What you need to know

Author
Newstalk ZB, NZ Herald,
Section
Audio,
Publish Date
Thursday, 21 February 2019, 11:40a.m.
The report was made public this morning. (Photo / Getty)

 

Sir Michael Cullen's working group has today recommended a swathe of changes to New Zealand's tax system. Here they are in a nutshell:

  • Capital gains tax (CGT) to apply after the sale of residential property, businesses, shares, all land and buildings except the family home, and intangibles such as intellectual property and goodwill.
  • Tax rate to be set at the income-earner's top tax rate, likely to be 33 per cent for most.
  • Calculation of gains to not to be retrospective - tax to be applied to gains made after April 2021.
  • Art, boats, cars, bikes, jewellery, personal household items and the family home to be exempt.
  • Losses on the sale of assets bought before April 2021 will generally be able to be used to reduce paid on gains from other assets.
  • Increase the threshold of the lowest tax rate (10.5 per cent), allowing more income to be taxed at the lower rate.
  • Increase social welfare net benefits to allow similar benefits as low-income earners post tax threshold adjustments.
  • House on farms and surrounding land up to 4500 sq metres exempt from CGT, calculated as a percentage of total farm value.
  • CGT on small businesses can be deferred (roll over relief) if annual turnover is less than $5 million and sale proceeds are reinvested in similar asset class.
  • No support to make company tax progressive ie smaller companies paying less than 28 per cent.
  • Capital gains tax estimated to raise $8.3 billion over five years.
  • Expand coverage and rate of Waste Disposal Levy, expand the ETS and use congestion charging.
  • Better tax benefits for Kiwsavers on low and middle incomes.

 

ON AIR: Kerre McIvor Mornings

9a.m. - 12p.m.