Written by R. A. Stewart
New Zealand does not have a capital gains tax or wealth tax. New Zealander’s do not want one according to statistics. That is despite the fact that the so-called Super Rich are paying half as much tax as ordinary New Zealanders according to new paper reports.
This may or may not be true.
The reason is that the super rich are benefiting from capital gains which is not disposable income. The value of their property may have risen by x amount of dollars but it is unrealised wealth.
There are ordinary New Zealanders who own their own home and whose property has increased in value too. That may be subject to a capital gains tax too.
Then there are those who have money invested in the New Zealand pension fund Kiwisaver which invests money in property and shares. A capital gains tax may affect kiwisaver balances.
New Zealand voters are smarter than many politicians give them credit for and any political party that treats them as idiots does so at their own peril.
The same rules which are applicable to the super rich are also available to everyone else who owns property. There will be a lot of people who are considered to be middle income earners but are finding things tough with the cost of living crisis yet many of these are property owners who are asset rich but cash poor. They may not have the cash available to pay the tax on the capital gains on their property.
For years New Zealanders have been encouraged to save for their retirement so what message does it send to the young to then increasing taxes on assets which have been built up over the years.
It is likely that a Capital Gains Tax will drive up rents as landlords will want to recover the extra costs to their business. This will hit those on a lower income the most as they are priced out of the housing market.
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