NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Business / Economy

Capital gains tax proposal sparks chorus of concerns

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
21 Feb, 2019 06:00 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Massive complexity in capital gains tax proposal, says Deloitte tax partner Greg Haddon.

Massive complexity in capital gains tax proposal, says Deloitte tax partner Greg Haddon.

Business groups have pushed back against a Capital Gains Tax with a chorus of concerns ranging from the impact on productivity, the destruction of shareholder value, and flow-on to an already slumping property market.

Matt Goodson, managing director of Salt Funds Management, said CGT would have a negative impact on company valuations.

"It will increase companies' cost of capital, which should decrease valuations, and that will be particularly skewed to those companies who retain most of their earnings." "If you retain most of your eanrings, you would expect your share price to go up over time, so you would be taxed on that where you were not taxed previously," Goodson said.

READ MORE:
• Rural sector gives thumbs down to capital gains tax
• Comment - The Government's capital gains tax masterstroke
• CGT could dent house prices and push up rents

Shane Solly of Harbour Asset Management said the extension of the bright line test and restrictions on income spreading were already taking the heat out of some of the more speculative elements of residential property investment.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

"They have certainly put owner occupiers on a more equal footing to residential property Investors," Solly said.

The introduction of a CGT while leaving the above measures in place would be "draconian."

EY Tax leader David Snell said he thought the prospect of implemention by 2021 looked "hasty."

Advertisement
Advertise with NZME.

"The fact the group vote was split three (against) to eight (for) indicates that implementation of a full CGT is going to be incredibly difficult with associated revenue and efficiency gains uncertain."

Greg Haddon, tax partner at Deloitte, said the report raised the possibility whether the government should look at a staged introduction and consider what assets might be perhaps be simpler to start with.

"One of the things we are going to have to work through over time is the complexity," he said. "For example it says it will be taxed on a realised basis. A lot of overseas jurisdictions have massive rules around what is in fact a realisation so that can be very complex."

Mark Peterson, CEO of stock market operator NZX, said it would discourage investment in New Zealand businesses and stunt the growth of the country's capital markets.

Discover more

Business

Kiwi rocket man slams CGT, but other entrepreneurs see positives

21 Feb 05:15 AM
Business

NZX says CGT would stunt market, economy

21 Feb 05:40 AM
Business

Rural sector gives thumbs down to CGT

21 Feb 05:33 AM
Business

NZ shares rise; A2 Milk hits new record

21 Feb 04:35 AM

The suggested capital gains tax (CGT) would cover assets such as land, shares, investment properties, business assets and intellectual property.

Read more: Tax Working Group recommends capital gains tax: what it means for you

Peterson said New Zealanders were already taxed on income used to acquire shares – and that being taxed twice would be unfair.

"NZX is also concerned about the fairness of the Tax Working Group's recommendations, and the different tax treatment proposed for direct investment compared to managed funds and KiwiSaver, which if implemented, would narrow participation in the New Zealand market," Peterson said.

He said the NZX did not want to see tax settings which would create preferences for offshore investment, adding a strongly performing and efficient capital market requires the broadest possible participation from a wide range of investors.

"Our capital market is a significant part of New Zealand's economy, which needs to keep growing," he said.

Advertisement
Advertise with NZME.

"The recommendations outlined today are not fair on New Zealand businesses and may pose risk to economic growth."

Meanwhile, lobby groups wasted no time laying into the report.

Federated Farmers described the capital gains tax proposal as a "mangy dog", that would add unacceptably high costs and complexity to the rural sector.

Andrew King, chief executive of the New Zealand Property Investors Federation, said the recommendations weren't a surprise.

"They were set up to bring in a capital gains tax that wouldn't affect the family home."

But he said the proposals would penalise those who saved and invested and encourage people to either spend their money or put it into the family home.

Advertisement
Advertise with NZME.

"Basically it's a disincentive to those who want to save money and invest money - they get punished."

The Employers and Manufacturers Association (EMA) warned that any gains from such a broad-based capital gains tax would be eaten up by administration and other costs, leaving little revenue.

"It's difficult to see any benefits for the business community from implementing the proposed capital gains tax rules, as taxing both shares and business assets appears to be double taxation," EMA chief executive Brett O'Riley.

Peter Newbold, general manager of PGG Wrightson Real Estate, said a capital gains tax would have a minimal impact at the moment because the rural property market was largely static.

He said in general rural property values for most sectors are holding steady, although there was some downward pressure in dairy in some regions.

"If that remains the case, a capital gains tax would have minimal impact on the market," he said.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Economy

Premium
Business

Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas

Premium
Tax

Tax break? Govt urged to make it cheaper for employers to provide health insurance

Interest rates

Lower interest rates, more money printing - RBNZ considers response to ageing population


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from Economy

Premium
Premium
Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas
Business

Venture capital market hot again, Icehouse Ventures boss says, as new fund feeds on golden visas

A new seed fund raises half of its $30m target in a month.

15 Jul 05:00 PM
Premium
Premium
Tax break? Govt urged to make it cheaper for employers to provide health insurance
Tax

Tax break? Govt urged to make it cheaper for employers to provide health insurance

15 Jul 01:02 AM
Lower interest rates, more money printing - RBNZ considers response to ageing population
Interest rates

Lower interest rates, more money printing - RBNZ considers response to ageing population

14 Jul 10:00 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP