Capital gains tax key part of house affordability

The Government’s refusal to consider a capital gains tax that would help put a lid on property prices and increase wages shows it isn’t serious about making housing affordable in this country, says Labour’s Finance spokesperson David Parker.
“John Key and Bill English dismiss a capital gains tax out of hand. But in advice to New Zealand the IMF and the OECD both say a capital gains tax is important and appropriate.
“The Treasury said in its latest briefing to the incoming minister that the distortions in the current tax system around taxing capital need to be fixed. The former Secretary to the Treasury John Whitehead, free of political constraint after retirement, went further and expressly said a capital gains tax is desirable.
“The Reserve Bank in 2011 said the tax treatment for owners of rental property is relatively favourable to other countries and recommended consideration of policies in Australia where realised capital gains on rental properties are taxed.

“Owning your own home is a dream that’s disappearing for many hard-working New Zealanders, in part because the tax bias effectively subsidises landlords. The OECD has expressly made this very point.
“Housing is unaffordable for too many in this country. National isn’t doing enough, which means homes will remain out of the reach of the many.
“That’s because National is wedded to helping people who own multiple numbers of houses rather than helping those who can’t afford even one.
“A capital gains tax is not the complete answer but it help keeps a lid on property prices. It also diverts precious investment into the productive export sector which brings more jobs and higher incomes.
“A capital gains tax is also fair in that it stops income from property speculation being free of tax while wages and interest are fully taxed.
“Making housing more affordable in this country requires a bold and comprehensive package of ideas. A capital gains tax is an essential tool in helping low and medium income earners into their first home. By rejecting it out of hand National is letting Kiwis down, again.”
31 October 2012 Media Statement

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Author: David Parker MP

I am a List MP for the New Zealand Labour Party, and Spokesperson for Trade & Export Growth and Treaty of Waitangi Negotiations and the Shadow Attorney General

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