Capital Gains Tax: What does it mean to the Bay?

Ben Friis said he had planned for his investment properties to go towards his retirement. Photo / Stephen Parker

Some Bay of Plenty residents have coined the Capital Gains Tax proposal as "unfair on the hardworking", with others saying it is time for a balanced tax system.

The Tax Working Group yesterday released a recommendation for a Capital Gains Tax to be applied on assets such as land, shares, investment properties, business assets and intellectual property, with the revenue used to lower the personal tax rate and target polluters.

Ben Friis, a 21-year-old tradie from Rotorua who owns three properties in Western Heights, said the thought of a Capital Gains Tax coming in "scares" him a little.

Friis said his investment properties were a result of six years of hard work and the plan was for them to go towards his retirement.

"This tax will hurt the younger generation in the long run, there might not even be superannuation when I reach it".

Friis said the tax will likely affect first-home buyers as people like himself would be more reluctant to push their properties on.

Full-time local property investor Lindsey Richards said tenants would be hard-hit by the new tax.

Renters could end up having to pay more, as fewer people would want to invest in rental properties and if they did, they would be looking for bigger returns, he said.

Richards said since workers were already taxed off their income, it was "double-dipping" to tax their savings too.

Federated Farmers Bay of Plenty President Darryl Jensen said the devil was is in the detail when it came to who the tax would hurt the most.

Jensen said taxing those in the productive sector is really unfair.

"We don't want the result of a hardworking life taken away by tax."

By taxing a person's retirement fund, the government would definitely be responsible for looking after more elderly, said Jensen.

Todd Muller, the National MP for Bay of Plenty, said the local economy was made of hundreds of small businesses, orchards, farms, and retirees who had worked hard for years to build success for themselves and their families.

"They deserve to enjoy the fruits of their labour, not get a kick in the guts from the Government when they get to the point of selling."

National Party leader and Tauranga MP Simon Bridges said the tax would drive up the cost of living and "hammer the economy".

However, Labour MP for Waiariki Tamati Coffey said: "We can't continue to have people in the Waiariki paying their fair share of tax, cheated by those that don't."

New Zealand First had begun to consider the report's findings, however, NZ First list MP Clayton Mitchell said the party believes in a fair and equitable tax system.

National MP for Rotorua Todd McClay said it was a huge tax grab on hard-working Kiwis.

Labour List MP Angie Warren-Clark said the goal was to make sure the tax system was balanced and fair and the government will consider this as decisions are made.

Further announcements could be expected in April, said Warren-Clark.