A capital gains tax would likely chase some "mum and dad" property investors out of the housing market, limiting the supply of rental properties, a rental agency owner says.

The Tax Working Group, chaired by former Labour Finance Minister Sir Michael Cullen, has recommended that the Government introduce a capital gains tax on assets such as land, shares, investment properties, businesses assets and intellectual property.

It would exclude the family home, cars, boats and art.

National Party leader Simon Bridges told the Bay of Plenty Times the capital gains tax recommendations were "an assault on the Kiwi way of life".

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"It's all about tax envy and ideology by the government. But the tragedy is that it won't touch the wealthy who have access to the best accountants and financial experts to restructure their assets," he said.

Bridges said it would have a huge impact on middle-income earners.

"Whether it is a hairdresser in business who has slogged for 30 years to build up a nest egg or someone with a KiwiSaver account who will be stung for one-third of it, it's unfair. This is one of the most onerous capital taxes in the world. It would hammer our economy."

Tauranga Community Housing Trust general manager Jacqui Ferrel said she wanted to analyse in more detail what was being proposed.

"But we wouldn't support anything that further slowed up the supply of housing. We're at a critical point in Tauranga in terms of access to dwellings for low socio-economic tenants, especially for families, students, mature senior citizens and people with disabilities."

Tauranga Rentals owner Dan Lusby said he had hoped that the working party would have recommended that people who owned a home and one rental be exempted.

"There are lots of mum and dad investors out there who use their sole rental property as a retirement investment and I think it will chase a lot of those people away from the housing market before April 2021.

Lusby said he believed other property owners may also rethink their investments.

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Tauranga Property Investors Association president Juli Anne Tolley said anyone selling a rental property before the current five-year threshold already had to pay tax on gains.

"Most investors only own one or two rental properties and are just trying to put away some funds for their retirement."

Tolley said there would be small investors who decided to sell up and invest more in their own home, meaning another home would be taken from the rental market or bought by a more savvy investor.

Speaking to media yesterday, Prime Minister Jacinda Ardern said the Government would take a bit of time to form a consensus around its response.

Asked about National's response to the report, Arden said back in 2010 a working group reported back to National led-Government with suggested changes to the tax system.

"I do recall a time when that National Party undertook a similar bit of work and it came back with some very similar suggestions."

"They did what we are now doing, which is taking the time to consider the report."

- Additional reporting NZME