The spectre of a capital gains tax on commercial, industrial and retail properties worried big-time business landlords in that $50 billion-plus sector and they have just expressed relief at Prime Minister Jacinda Ardern's rejection of such a scheme.

Read more: Government kills off capital gains tax

Matt Paterson head of advocacy, said: "We're pleased the Government has chosen a path that will not harm the productive economy. A capital gains tax would have been incredibly complicated. The Government's decision will keep our tax system simple. When a tax system is simple there are less opportunities for loopholes, and that makes it fairer for all of us."

He feared that had CGT been implemented, a raft of new regulations would be brought in.

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"There would have to be a whole lot of extra rules around this to try to make it fair. Bureaucrats would have a field day swimming in all the new red tape, but ordinary businesses would have found themselves drowning in it, and quickly," Paterson said.

Leonie Freeman, chief executive of the council which represents members with $50b of real estate, had previously expressed concern about the possibility of CGT which she predicted would put a brake on sales and penalise property upgrades.

The council called for the Tax Working Group to recognise the cost of doing business and said the tax system should not restrain businesses.