What sort of Capital Gains Tax regime will the Government reveal?

Will it be the revolutionary, comprehensive model proposed by Sir Michael Cullen's Tax Working Group - catching almost every New Zealander through KiwiSaver, baches, small businesses and farms?

Or will it be dialled right back to hit just residential property investors?

The smart money is on the latter - but I wouldn't bet my second house on it.

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The announcement - expected around 2pm this afternoon - has been hotly anticipated for two months.

While opponents have flooded the zone with commentary pointing out the complexities and downsides of a comprehensive CGT the Government has held its cool.

There has been an element of political theatre to this. Senior leadership in the Government must have had a sense of what they want to achieve, and what is actually achievable, for some time.

Most likely, that target was always a full capital gains tax on residential property investment.

There are two options for dialling the Tax Working Group proposal back to just property investment.

One - the simplest - would be to adopt what has been dubbed "the minority report".

Three members of the Tax Working Group did not sign off on the main report - recommending instead that the current "bright line" tax on investment property be extended.

The other option would be to adopt only the section of the main report that relates to property.

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That would still be a political hot potato as it would likely capture baches and lifestyle properties.

Regardless, if property is the only real target, businesses, farmers and the capital market industry will breathe a sigh of collective relief - leaving disgruntled property investors as a much less politically challenging voice of dissent.

That's the safest play for the Government today.

Some will call it a backdown but it could still claim victory in imposing a property tax that the Labour Party has chased for more than a decade.

But ...

... there is still a chance the Government opts to play it a tougher. Depending on what they've been able to sell to a relatively unenthusiastic coalition partner in NZ First.

We could still see a more comprehensive CGT plan based on the Working Group model but with small businesses, farms and KiwiSaver ring fenced out.

In other words, it would still hit the top end of town - something that may appeal to Winston Peters' fat-cat-bashing base.

If that happens it would still represent a radical and complex tax regime change for the business world.

You could then expect an almighty political bun fight as big business pushes back.

Last month the Business Herald ran a series looking each aspect of the report in detail:

Capital Gains Tax: What it means for business owners
Capital Gains Tax: What it means for farmers
Capital gains tax: A potential 'nightmare' for lifestyle block owners
Capital gains tax: What will it mean for your property?
Capital Gains Tax: What it means for KiwiSaver and direct share investment