The proposed capital gains tax has been slammed by tax experts. Photo / Doug Sherring
The proposed capital gains tax on investment properties sold within two years was yesterday slammed by tax experts as unfair, incoherent and likely to affect people it was never intended to capture.
Speaking to Parliament's finance and expenditure committee on the new bill for a bright-line capital gains tax, many
of them said exclusions should be made for people in genuine hardship who were forced to sell their properties for reasons such as illness or redundancy. Otherwise speculators would simply change their behaviour to sell later, and the bright-line test would capture small investors and people who never intended to sell.
The Taxation (Bright-line Test for Residential Land) Bill arose from the 2015 Budget and was one of several measures designed to quell the Auckland property market.
Stephen Tomlinson, for the New Zealand Law Society, was among submitters who said the bill should not be passed "as it is likely to be ineffective in achieving its stated objective" - to target speculators who were not meeting their tax obligations. "They will simply change their behaviour so land will not be disposed of within the two-year period."
He also questioned why, if the move was aimed at Auckland, the rest of the country had to bear the brunt of it.
