The Tax Working Group proposals

Written By: - Date published: 12:38 pm, February 21st, 2019 - 339 comments
Categories: capital gains, greens, labour, national, tax - Tags:

This has now been released.  Radio New Zealand has this summary:

  • “Tax the capital gain on sale of land, shares, business assets, intangible assets such as intellectual property. Tax to be imposed when the asset is sold, and levied at the seller’s marginal tax rate. Assets to be valued from when the tax is imposed.
  • The tax would NOT apply to the family home, and personal assets such as cars, paintings, jewellery, and household appliances. However, a holiday home WOULD be taxed on sale.
  • The capital gain on shares in companies would be taxed but in some circumstances capital losses would also be able to be offset against other income.
  • The capital gain on the sale of a business would be taxed, including the goodwill.
  • Exemptions from capital gains to be granted for some “life events” such as relationship breakup, death. A family farm passed on to a family member would be covered by a rollover and there would be no tax on the capital gain. But if the family member then sells to a third party the capital gain would be taxed.
  • No changes to income tax rates, but a recommendation to raise the income threshold for low and middle income groups, i.e they would earn more at a low or lower tax rate.
  • No change to GST and no exemptions for certain types of products, such as food and drink.
  • Environmental taxes: changes to the emissions trading scheme to be more like a carbon tax. Dirty taxes on solid waste to reduce volumes to landfills. Taxes on water pollution and water extraction. Tax deductions to encourage conservation.
  • Taxation of fertiliser use. Consider congestion charges to tackle traffic issues.
  • No changes to current taxation of Maori assets and incorporations.
  • Recommends government take steps to encourage retirement saving for low and middle income groups through possible refunds of employer’s super tax, reduce tax rate on some KiwiSaver investments.
  • Review taxation of charities to ensure the income from commercial activities are being used for the charitable causes they are being raised for.
  • Give Inland Revenue extra resources for administration and enforcement.”

National has been on the attack for a while.  Although they have been pretty sloppy with the detail:

Stand by as the battle of words commences.

 

339 comments on “The Tax Working Group proposals ”

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  1. Enough is Enough 1
    21 February 2019 at 12:55 pm

    Winston claimed on the Country radio show yesterday that Farms would be totally exempt from the CGT.

    If would be a farce if that was to be the case and farms were treated any differently to other types of business.

    This will all come down to New Zealand First again. sigh

    • James 1.1
      21 February 2019 at 1:39 pm

      My family home is on over 4500m – it would be a farce if my home was treated differently to other homes as well right ?

      • left_forward 1.1.1
        21 February 2019 at 1:53 pm

        You did read the bullet points James?
        Try the second one.

        • james 1.1.1.1
          21 February 2019 at 3:05 pm

          Did you read the detail (obv. not)

          House on farms and surrounding land up to 4500 sq metres exempt from CGT, calculated as a percentage of total farm value.

          So all my land that I have my family home on over 4500m2 will attract CGT

          • bwaghorn 1.1.1.1.1
            21 February 2019 at 3:31 pm

            Are you a farm or a lifestyle block or a grand bome and garden .
            Do you operate as a farm for tax purposes

            • James 1.1.1.1.1.1
              21 February 2019 at 3:46 pm

              Just my lifestyle block. I get zero tax advantages from it over a normal family home.

              • bwaghorn …
                21 February 2019 at 3:56 pm

                I’d be very surprised if it would be taxed as a farm then . But worth finding out .

                • James …
                  21 February 2019 at 11:35 pm

                  “House on farms and surrounding land up to 4500 sq metres exempt from CGT, calculated as a percentage of total farm value.”

                  So – yep. A lot of my family home (along with many others) will attract CGT

              • Ankerrawshark …
                21 February 2019 at 6:28 pm

                Cry me a river

                • bwaghorn …
                  21 February 2019 at 6:31 pm

                  The thing is these are all the things Arden and Robertson need to have bolted down before debate time . Remember Cunniliffe getting thumped by key

                  • Incognito …
                    21 February 2019 at 8:42 pm

                    That was an election campaign and about party policy. This is a political debate on a report and proposals by the TWG. But you’re right, landing cheap shots and scoring easy points is National’s MO; they’d even use underarm bowling to ‘win a debate’ …

                • James …
                  21 February 2019 at 11:35 pm

                  Do you think that some family homes should attract CGT and others not ?

      • Michael who failed Civics 1.1.2
        21 February 2019 at 2:15 pm

        If you need a big pile of dirt to plonk your mansion on, it’s evident you are far too rich and, therefore, must be made to pay your fair share of tax.

        • BevanJS 1.1.2.1
          21 February 2019 at 2:36 pm

          ‘The Tax Working Group (TWG) has come up with a common-sense set of tests, and has suggested no-one would have to pay tax on the section their family home was built on if their section was smaller than 4500 square metres. ‘

          Why should my rural scrub block be pinged compared to a $1mill pad in town?

          • KJT 1.1.2.1.1
            21 February 2019 at 2:40 pm

            Agree.

            “Family homes” should only be exempted, up to the average house price.

            I can see why that would be politically difficult, even though those bidding up the prices of Auckland houses, should not escape tax on them.

          • patricia bremner 1.1.2.1.2
            21 February 2019 at 4:38 pm

            James, It won’t be An acre of land in the boondocks will be worth a great deal less than an acre in the city.
            Where rules say no blocks less than 2 or 10 acres to subdivide, will mean one home one block of land. 4500 sq mtrs is a suggested compromise. These are some of the issues to be tested in their considerations, and it could become 7500sq mtrs. Fairness and intent will enter into the decisions.

          • Michael who failed Civics 1.1.2.1.3
            22 February 2019 at 1:09 am

            Because any capital gain when you sell your “rural scrub block” will be much lower than when you sell your “$1 mill pad in town” and so will any CGT you are obliged to pay.

            • BevanJS 1.1.2.1.3.1
              23 February 2019 at 6:32 pm

              It’d be zero in town on a section. Odd that this TWG makes the distinction. I don’t understand the driver.

        • james 1.1.2.2
          21 February 2019 at 3:05 pm

          So – its an envy tax and peoples family homes should be treated differently ?

          • KJT 1.1.2.2.1
            21 February 2019 at 3:22 pm

            My tax paid is an envy tax. The rich are so envious of workers, they think we should pay all the tax.

            Whereas speculators should be exempt. Because they are, “special”.

            • James 1.1.2.2.1.1
              21 February 2019 at 3:47 pm

              Yeah – typical level of stupid reply I would expect from you.

            • Shadrach 1.1.2.2.1.2
              21 February 2019 at 5:58 pm

              ‘The rich’? Do you mean high income earners? If so, the figures in Australia show that the highest 10% of income earners pay around 50% of the income taxes. It would be similar here in NZ.

              • bwaghorn …
                21 February 2019 at 6:34 pm

                How does it stack up as a % of total income though.
                Including shears houses trusts etc

              • KJT …
                21 February 2019 at 6:36 pm

                Which is dishonest. Haven’t you heard there are other taxes apart from income taxes. Like GST which impacts mostly on those on low income.

                Not to mention that the ‘benefits’ of our functioning tax funded society accrue mostly to the well off. We should pay more for it.

                • Shadrach …
                  21 February 2019 at 7:59 pm

                  “Like GST which impacts mostly on those on low income.“

                  We’re not discussing impacts, we’re discussing who pays the most of the tax.

                  • KJT …
                    23 February 2019 at 8:17 pm

                    Exactly. Which is why ignoring GST, petrol taxes, alcohol taxes, ACC levies and all the other taxes, is dishonest, when you are trying to figure out who pays the most taxes.

                    In fact the middle of the income range pay 60% of all taxes. While many of the most wealthy pay little. Which is why a CGT, is effective in getting those with the most assets, to pay their share.

                    • Shadrach …
                      23 February 2019 at 10:39 pm

                      “Which is why ignoring GST…”
                      Who’s ignoring them? You started banging in about impacts, which is irrelevant to who pays the most tax. The wealthy and high income earners pay ACC, and a hell of a lot of GST as well.

                      You also forget that these same people are a far lower burden on the state. They are more likely to use private healthcare, and far less likely to qualify for the high levels of subsidy when entering residential care. They are more likely to pay to send their children to private schools, or to higher decile public schools, who receive less government funding. You see, in the bigger picture, we do very well out of our wealthiest citizens.

                    • Shadrach …
                      23 February 2019 at 10:54 pm

                      You might also want to read https://www.beehive.govt.nz/release/significant-income-redistribution-after-tax-reforms, which shows how the share of tax paid by higher income earners increased between 2008 and 2014.

          • woodart 1.1.2.2.2
            21 February 2019 at 5:42 pm

            no james, its a wanker tax, and you WILL get court up in it.

          • Liberal Realist 1.1.2.2.3
            21 February 2019 at 6:05 pm

            Exactly how is a CGT an envy tax?

            Are you saying that everyone who is taxed on their wages are envious of those who make their living from currently untaxed capital?

            The reality is that NOT taxing capital (gains) is grossly unfair, creates perverse incentives to invest in something which produces NOTHING, AND only serves to further inflate bank profits while making property ownership out of reach for a substantial portion of the population.

            • Bazza64 1.1.2.2.3.1
              21 February 2019 at 6:50 pm

              I always thought Cullen said that too many invested in property & needed to be directed to more productive assets. So now the CGT will apply to productive assets (shares, businesses, farms etc) so just looks like another tax grab. But the good thing is everyone will get the benefit of the cut to income taxes, unless they do a slippery shifty & lift the top marginal tax rate to 39% (It is scientifically proven that any rate above 33% is harmful to human wellbeing)

              • KJT …
                21 February 2019 at 7:18 pm

                Works for Australia, Scandinavia, Switzerland.

                https://www.google.co.nz/search?q=australia+top+tax+rate+personal&ie=utf-8&oe=utf-8
                Don’t forget State taxes and medical are on top.

                Hardly struggling societies.

              • KJT …
                21 February 2019 at 7:28 pm

                Farm land prices have gone up way past the level where they are a ‘productive’ not speculative, asset.

                Which is creating a future problem with farms that are capitalised way past the level, that can be repaid by any conceivable business earnings.

                If the anti CGT people were really concerned about ‘family’ farming, and not tax free capital gains, they would want land prices to drop, so share milkers and farmers children, could afford them.

                • Bazza64 …
                  21 February 2019 at 7:50 pm

                  You’re probably right about farms, but businesses & shares get hit too – seems counterintuitive to Labour arguing that investment was needed in more productive assets & not housing.

                  • KJT …
                    21 February 2019 at 9:33 pm

                    Yes.

                    But you cannot claim it is a fair and neutral tax, if only some capital gains are included.

                    And, we still have the issue of the taxes falling excessively on wage earners and small business profits, not capital gains earners

                    I suspect it will actually help firms grow. With cheaper land. And, as an incentive to keep, grow and re-invest, rather than ‘pump and dump’ for capital gains.

                    I would not be surprised if Labour chicken out and apply CGT, to residential ‘investment’ property, only.

                    • Shadrach …
                      23 February 2019 at 11:04 pm

                      “And, as an incentive to keep, grow and re-invest, rather than ‘pump and dump’ for capital gains.“

                      A CGT does exactly the opposite. It disincentivises investment, because it means not only are the additional profits that result from investment taxed, but so are any gain in capital value.

                    • KJT …
                      23 February 2019 at 11:19 pm

                      In is an incentive for investing in a long term, daily income earning business, over one set up to maximise tax free gains on sale.

                      A much better economic outcome.

                  • KJT …
                    23 February 2019 at 8:20 pm

                    CGT gives an incentive to keep and build up a business to maximize day to day, income.

                    Instead of maximising it’s sale value.

                    • Shadrach …
                      23 February 2019 at 10:59 pm

                      Maximising income maximises capital value. There is no ‘instead of’. Businesses are valued on a multiple of EBIT. If anything, a CHT will disincentivise ongoing investment in a business, which is just one reason it is a stupid idea.

                    • KJT …
                      23 February 2019 at 11:22 pm

                      Businesses are valued on a lot of things, much of them intangible, like goodwill, which often doesn’t survive a sale.

                      You have to come up with a better reason for opposing CGT, than, it may cost me, or it is a “stupid idea”.

              • Shadrach …
                23 February 2019 at 11:09 pm

                Cullens CGT would apply to productive investments, but not to artwork, which has no productive value at all. The likelihood is any CGT that gets past coalition negotiations will raise so little, and cost so much to operate, that tax cuts won’t buy a postage stamp.

          • Ankerrawshark 1.1.2.2.4
            21 February 2019 at 6:27 pm

            That is crazy to say it’s an envy tax……it’s so obviously about fairness

        • greywarshark 1.1.2.3
          21 February 2019 at 4:59 pm

          Oh what’s the definition of ‘far too rich’? It is my understanding that there is no such thing.

    • Pamela 1.2
      21 February 2019 at 2:19 pm

      Well New Zealand shouldn’t be relying on farms. For too long now New Zealand has all their eggs into one basket. We are workig towards less reliance on farms.

      • Pamela 1.2.1
        21 February 2019 at 2:40 pm

        Edited: Well New Zealand shouldn’t be relying on farms. For too long now, New Zealand has put all their eggs into one basket. We are working towards less reliance on farm and no longer wish to place all their eggs into one basket.

      • james 1.2.2
        21 February 2019 at 3:06 pm

        4500m is not a farm. Its just a pain in the arse

        • woodart 1.2.2.1
          21 February 2019 at 5:48 pm

          well if its a pain in the arse, perhaps you should lease out parts of it to peasants to put tiny homes on it. it would let you look down your nose at your tenants and give you satisfaction as they tugged their forelocks .you could be the lord of the manor, and be able to call on any virgins in residence. that would stop you tugging on yourself……….

    • alwyn 1.3
      21 February 2019 at 2:55 pm

      He didn’t really say that you know. He simply let you think he did.

      What he said, at least in the interview with him that I heard was roughly this.
      Farmers don’t buy land to sell. They buy it to hold on for ever. It is only the rich people in Auckland and Wellington that sell the land.
      People who don’t ever sell the land won’t have to pay CGT.
      This, by his definition of a “farmer”, is therefore expressed as “farmers won’t have to pay CGT”, and that is what you think is going to happen.

      All good politicians can talk like that. You just THINK they made a promise. Clark, Key and Cinliffe were just as good at this as Winston is. Ardern is getting pretty good at it as well.

      Of course if they ever do sell the land the CGT becomes payable. To bad if the child who was going to take over the farm has an accident on the tractor and has to get some other type of job.

      • KJT 1.3.1
        21 February 2019 at 3:02 pm

        Then he has all the money from the land sale, less a bit of tax.

        Much better than most people who lose their job.
        Left with an unpayable mortgage.

        • alwyn 1.3.1.1
          21 February 2019 at 3:35 pm

          I wasn’t discussing that at all.
          I was merely pointing out that “Enough is enough” was allowing himself to be fooled by Winston when looking at Winston’s statement, as quoted that

          “Winston claimed on the Country radio show yesterday that Farms would be totally exempt from the CGT.”

          Do you remember “Blip”? He used to publish a great long list of what he claimed were Key’s lies. The problem was that Blip used to claim that Key had made statements that in fact he had never made. Key had actually said something that was subtly different and wasn’t lying at all.
          As I say it is a skill that all successful veteran politicians develop. What you think you hear isn’t what they really said.

      • Enough is Enough 1.3.2
        21 February 2019 at 3:36 pm

        I think you are correct there Alwyn after revisiting it.

        His argument is Farmers won’t pay a capital gains tax because they don’t sell. I’m happy with that position. So long as we catch the bastards when they do cash in their chips. It should come at a 66% tax rate to compensate the country for poisoning our rivers.

        Fed Farmers have come out this afternoon all guns blazing though so I don’t think Winston’s trickery will stand up to the polluters scrutiny.

        • alwyn 1.3.2.1
          21 February 2019 at 3:49 pm

          When you are as old as I am and have been conned too many times by Politicians you get very suspicious of their statements. I read everything they say with a very doubtful eye.
          Unfortunately they usually are trying to fool us.They are best summed up with that old saw.
          “If a politicians’s statement is to good to be true it probably is”

          Cynical, aren’t I?

        • bwaghorn 1.3.2.2
          21 February 2019 at 6:37 pm

          You had me to begin with till the hate came bubbling to the top . Go fuck yourself you idiot.

      • Pat 1.3.3
        21 February 2019 at 6:42 pm

        “Of course if they ever do sell the land the CGT becomes payable. To bad if the child who was going to take over the farm has an accident on the tractor and has to get some other type of job.”

        Welcome to the real world

    • patricia bremner 1.4
      21 February 2019 at 8:05 pm

      No he was talking about keeping a farm in a family.

  2. Cinny 2
    21 February 2019 at 12:58 pm

    I support a CGT

    Those with multiple properties are the minority.

    Currently such investors are making a tax free income. Is that fair? No

    Those who are anti a CGT will no doubt be property investors.

    • Enough is Enough 2.1
      21 February 2019 at 1:00 pm

      Any sort of investors Cinny. It not only a tax on real estate. Kiwisaver etc will be caught by this.

      But agree its a good thing

      • Cinny 2.1.1
        21 February 2019 at 1:03 pm

        This bit…

        Review taxation of charities to ensure the income from commercial activities are being used for the charitable causes they are being raised for.

        Awesome!!!!!!!!!!!!!

        • patricia bremner 2.1.1.1
          21 February 2019 at 3:21 pm

          Yes Cinny, a particular preacher came to mind!! The one who likes Harleys and flash properties.

        • greywarshark 2.1.1.2
          21 February 2019 at 5:03 pm

          They can run but they won’t be able to hide behind a ‘charity’. They will still be able to do lots of good for others if they want to. Haven’t read the details yet but charities receiving more than a year’s full-time salary on minimum pay, should be subject to a graduated tax.

          • Stuart Munro 2.1.1.2.1
            21 February 2019 at 6:22 pm

            It depends a bit on what they do – if they devote above a certain % to genuine charity work there’s no reason they should lose the exemption.

            • greywarshark 2.1.1.2.1.1
              21 February 2019 at 8:29 pm

              Too many holes for the devious to get through. And too much money going to a respectable church can blunt their clarity about how they should display their religiosity.

              Some religions seek poverty and their adherents ask for their meals and they have a period of being humble beings. In contrast, religion is big business in USA.

              Perhaps it would be better if church was in a stable and everyone wore their gardening clothes, instead of the idea that it is a time of sober display.

          • patricia bremner 2.1.1.2.2
            21 February 2019 at 8:21 pm

            Religious Bodies should come under that. They should have to do more than they do, with some obvious exceptions.

      • KJT 2.1.2
        21 February 2019 at 2:16 pm

        Kiwi saver is already taxed, at the marginal tax rate.

      • Ed1 2.1.3
        21 February 2019 at 2:51 pm

        Kiwisaver is already caught by capital gains taxes. Because the investment decisions are made by professional investment managers, capital gains are included in taxable income – which is levied at the marginal rate for each individual. So those MPs who have trusts may not pay capital gains tax on sales of shares or property through careful management to ensure that they invest for income rather than for resale, whereas “ordinary New Zealanders” who save through Kiwisaver, are subject to tax on capital gains obtained by the fund on their behalf. (The reality is however that there is not a lot of property in Kiwisaver funds, they are not sufficiently liquid to be able to pa out when people take money out in retirement, but share trading generates some capital gains or losses, and fixed interest investments can as well.)

        The “introduction” of capital gains tax will therefore only bring the wealthy into much the same situation as investors in Kiwisaver. That seems fair.

    • Naki man 2.2
      21 February 2019 at 1:43 pm

      “Currently such investors are making a tax free income”

      No they are not. They pay income tax.

      • KJT 2.2.1
        21 February 2019 at 2:17 pm

        No. Many forgo current income to increase the tax free gains on sale.

        Too complicated for you to understand, however.

        • Naki man 2.2.1.1
          21 February 2019 at 2:55 pm

          “No. Many forgo current income to increase the tax free gains on sale.
          Too complicated for you to understand, however.”

          They pay tax on their income. Capital gain is not income,too complicated for you to understand knuckle head.

          • KJT 2.2.1.1.1
            21 February 2019 at 3:04 pm

            Capital gain is money earned. Income. Just like any other.

            Now, next specious, bullshit reason why capital gains earning shouldn’t be taxed while earnings from, work, are.

            • Shadrach 2.2.1.1.1.1
              23 February 2019 at 11:18 pm

              Capital Gain is money earned from investing income already taxed. There FIFY.

              • Muttonbird …
                23 February 2019 at 11:27 pm

                So is profit. It is taxed again. Why should capital gain be any different?

                • Shadrach …
                  24 February 2019 at 10:34 am

                  No, profit is what is already taxed. It is that profit that determines any increase in capital value. Taxing capital gain is double tax, and therefore unfair.

              • KJT …
                24 February 2019 at 8:07 am

                GST is taxes paid with money that is already taxed. That is double taxation.

                Capital gains is profit/income made over and above, the already taxed money invested. It is NOT, double taxation.

                • Psycho Milt …
                  24 February 2019 at 8:41 am

                  Capital gains is profit/income made over and above, the already taxed money invested.

                  The NZ right’s disingenuous failure to recognise that in public comments is similar to the US version’s failure to recognise that Ocasio-Cortez promotes a 70% tax rate on income above $10 mil, and for the same reason.

                • Shadrach …
                  24 February 2019 at 10:35 am

                  Capital gain is achieved as a result of making profits already taxed. It is double tax, and it is a disincentive to invest in the businesses growth.

                • Shadrach …
                  24 February 2019 at 1:39 pm

                  “GST is taxes paid with money that is already taxed. That is double taxation“

                  Wrong. GST is a tax levied on the provision of a good or service. It is a spending tax on the application of disposable income.

                  “Capital gains is profit/income made over and above, the already taxed money invested. It is NOT, double taxation.”

                  Wrong. Capital gain is made on assets purchased from tax paid income. And, it is derived often as a result of the earning of income from the asset, that has also been taxed. That is double taxation. And it is a disincentive to investment.

          • The Unliving 2.2.1.1.2
            21 February 2019 at 3:24 pm

            Looks like those knuckle heads over at the IRD got it wrong too. No doubt due to some fascist/socialist/Venezuelan conspiracy (your choice), it would seem they do consider capital gain on property sales as income. From the You buy and sell a property within five years – the bright-line test section here (emphasis mine)

            If you buy and sell a residential property within five years, you’ll pay tax on the income you earn from the sale, unless you’re selling your family (main) home or another exclusion applies. This is regardless of your intention at the time of the purchase. A withholding tax may also be deducted at the time of sale.

            Why would the IRD be taxing capital gain if it did not think it was income of some kind?

            • Shadrach 2.2.1.1.2.1
              24 February 2019 at 1:42 pm

              Because that move was specifically to head off property speculation. They simply impute a motive to the property investor, that is that the asset was purchased with the intent of selling at a profit, rather than for long term rental income. I have no problem with a bright line test, but a CGT will disincentivise investment in rental properties by longer term investors, as well as in businesses and any other productive asset subject to a CGT.

      • Cinny 2.2.2
        21 February 2019 at 4:08 pm

        I pay income tax.

        As for the two rentals, at present we stand to make a HUGE tax free profit from them. Because we were fortunate to be able to ‘get on the ladder’ early due to a ‘pay out’.

        My bestie pays income tax, she didn’t have the good luck opportunity that I did. Each time she thinks she has enough for a deposit, the prices go up.

        She keeps saving, every dollar she makes is taxed.

        Meanwhile I could sell one of our rentals today and make an easy $300,000+ tax free from doing nothing. (we’ve had both rentals for more than five years).

        Is that fair? No it’s not.

        I support a CGT.

        • One Two 2.2.2.1
          21 February 2019 at 5:30 pm

          CGT may or may not help your friend, Cinny…or others in a similar position…

          But as the valuations would be in the future, should cgt become a tax…your 300k+ is still in place…tax free…

          Unless the market ‘tanks’…then maybe your friend has no income to support a mortage with…

          All rather unclear as to how it plays out…

          Unlikely to be how good folk reckon it might..or should …or will…

          • Cinny 2.2.2.1.1
            21 February 2019 at 6:04 pm

            Was thinking, maybe it would free up more houses and help to prevent anymore massive value rises, giving her a chance to catch up.

            It’s obscene how much values have increased in the last five years.

            • One Two 2.2.2.1.1.1
              22 February 2019 at 9:15 am

              The only way houses could be ‘freed up’ is if they are put onto the market…

              Should that happen en masse, the market would ‘tank’…

              Debt holders (institutions) have vested interest in ensuring the value of their debt book doesn’t tank…

              Due to the massive increases over the last 15 years, entire industry has been built off the back of those increases…

              Including local council borrow and spend…which has been based on increasing valuations and increasing debt levels…

              Personal debt levels built up on the back of rising house prices represents high individual and institutional risk…

              If prices drop due to stock availability increasing…all bets are off…overseas buyers and pro landlords would most likely be the beneficiaries of such circumstances…because falling prices below valuation for cgt will lead to ‘worthwhile’ investment opportunities…

              CGT on property will definately lead to anomolies which will penalise regular people who are not speculators or investors…and it would not necessarily help out those like your friend…it will highly likely assist those who it is ‘assumed’ would be paying the most cgt…

              It can’t…because if that happens…then it’s market ‘tank’…housing goes…it all goes…

              What helps your friend is good folk like yourself sell one of your properties to your friend below the 300k gain you refer to…

              That way the bank still gets paid and your friend gets a home she might be able to raise the deposit for and service the mortgage on…

              All without tanking the market…

        • Shadrach 2.2.2.2
          23 February 2019 at 11:16 pm

          So I look forward to hearing that on the sale of your rentals you make a voluntary tax payment to the IRD. Or gift the equivalent amount to your ‘bestie’. Fair enough?

    • infused 2.3
      21 February 2019 at 2:04 pm

      If you are an investor, you pay tax already, period.

  3. BM 3
    21 February 2019 at 1:02 pm

    I can’t see this being popular, from Kiwiblog

    • It would be at a rate up to 33%, making it the highest in the world
    • There would be no discount for inflation so people would be taxed even if their assets merely increase to keep pace with inflation
    • Every business owner and taxable asset owner would have to pay to get a valuation, costing billions of dollars
    • The CGT would not just apply to rental properties but also bachs
    • The CGT will apply to the land a family home is on, if it is a lifestyle block over 4,500 square meters. This is mainly in provincial NZ so will be a targeted tax on provincial NZ.
    • CGT will also apply to the family home if you run any part of your business from home, unless you stop claiming any home expenses off tax. This effectively means an end to claiming a portion of home expenses off tax, if you work at home.
    • CGT will apply to your main home, if you have flatmates who pay rent

    Labour would have to be insane to go with what Cullen is proposing.

    • lprent 3.1
      21 February 2019 at 1:11 pm

      Of course there is the usual problem that the one of the few organisations that is more inaccurate than National is Farrar/ Kiwiblog.

      Anyway – just looking at the list without bothering to look at the tax report I can see at least 5 obvious lies of omission or conflation of multiple things to produce a lie, and I’m down to the 7th item.

      All you have to do is look at ‘would’ followed by an incorrect assertion. Or would be followed by an assertion of something that everyone does anyway.

      For instance , I have never heard of any tax that took account of inflation – including GST and personal tax – have you? Why would a CGT do so?

      Basically Farrar is lying again.

      I suppose, that at least he is likely to be more accurate than ‘Taxpayers Union’. They just make most of their assertions up themselves without bothering to check if it is possible.

      • BM 3.1.1
        21 February 2019 at 1:19 pm

        For instance, I have never heard of any tax that took account of inflation – including GST and personal tax – have you?

        Seems to be a bit of discussion around it in the US.

        https://taxfoundation.org/capital-gains-taxes-indexed-inflation/

        • Graeme 3.1.1.1
          21 February 2019 at 1:52 pm

          We already have a tax in inflation, the OCR.

          But this defacto tax us levied by private business (the banks) for private profit. The banks also have the ability to influence inflation through their lending.

          Far better that inflation be taxed by the State wirh the proceeds benefitting society rather than private shareholders.

          See the confict here

      • Andre 3.1.2
        21 February 2019 at 2:13 pm

        The US and Australia (IIRC) tax capital gains at lower rates than ordinary income. In the US, capital gain on assets held less than a year is taxed at the full marginal rate, assets held more than a year are taxed at 0%, 15% or 20% depending on the taxpayer’s other income. I vaguely recall something like Australia’s capital gains rate is half the ordinary income rate. Inflation is usually the first justification given for these reduced rates.

      • alwyn 3.1.3
        21 February 2019 at 3:13 pm

        CGT, when it was introduced in Australia did precisely that. There was a published inflation adjustment index that you could use.

        Indexation was dropped in 1999 and to compensate to a degree they dropped the tax rate on the capital gain to half the marginal tax rate. If you owned the asset prior to 1999 you can still index the value if you now decide to sell it.

        All assets acquired before the CGT was introduced (1985) were also permanently exclude from the regime.

        There, now you have heard of such a tax and in a country just next door.

        • lprent 3.1.3.1
          21 February 2019 at 7:23 pm

          So it appears it was dropped – wonder why? Didn’t work? No wonder I didn’t hear about it if it was imposed in 1985.

          Never tried here (nor anything like it). But the question really is why would we bother putting in something that just looks like a boondoggle for accountants and lawyers and gives no economic benefits except to make speculative profits.

          I’d question why there is any economic reason why profits made via a CGT shouldn’t be taxed at the normal rates? After all there is no such inflation adjustment on profits made from salaries, dividends, etc. After all that preferential treatment does is encourage rentiers to hold assets (reducing the velocity of capital in the economy) rather than using them productively.

          • Bazza64 3.1.3.1.1
            21 February 2019 at 8:07 pm

            They dropped the inflation indexing in Aussie & at the same time the rate of tax on capital gains was halved.

            The reason for not taxing capital gains at the marginal rate is that the gain is often earned over a long time. The owner may have had lower marginal tax rates in earlier years, so it may have been a concession to reflect that.

            • alwyn 3.1.3.1.1.1
              21 February 2019 at 11:00 pm

              Perhaps we should allow for all the years it took to make the capital gain and spread the gain over the same number of future years.
              Say we have a capital gain made over 20 years of $20,000.
              After it is realised the person making it then has to declare $1,000 each year for the next 20 years.
              That is what is allowed for income a writer makes from Royalties paid for a book after all.

              • Muttonbird …
                21 February 2019 at 11:06 pm

                You want to be burdened with tax payments 20 years after you got the cash from the sale?

                I’ve heard of self-flagellation but you are a true masochist.

          • alwyn 3.1.3.1.2
            21 February 2019 at 11:09 pm

            It was put in when Labour Treasurer Paul Keating put the system in place in the 1980s.
            It was canned by the Howard Government.
            You comment “After all that preferential treatment does is encourage rentiers to hold assets”.
            Well no actually. The existence of a CGT which will have to be paid if the assets are disposed of will encourage people to hold onto assets. If there is no CGT it will make it easier to sell them if there is a better opportunity.
            Your argument is back to front.

            And I have news for you. Bringing in a CGT, particularly at the incredibly high rate Cullen wants, will make doing your tax return very much harder. It will mean we become rather like Australia where virtually everyone needs an accountant to do their return.
            Accountants will become an occupation where we have to allow immigrants to fill out all the positions needing filling.

          • Shadrach 3.1.3.1.3
            24 February 2019 at 12:13 pm

            “After all there is no such inflation adjustment on profits made from salaries, dividends, etc. After all that preferential treatment does is encourage rentiers to hold assets (reducing the velocity of capital in the economy) rather than using them productively.”

            1. Salaries and wages are earned over a fixed and finite period. There is no time element to their increase in value. They are also paid in the same value of currency as costs are incurred. With capital gain, the gain is paid out in dollars that are worth less than those invested by at least the rate of inflation.

            2. Holding a rental property IS productive investment. It provides a service in return for payment. This government is already implementing policies that will lead to a shortage of rentals, but as a landlord that suits me just fine.

      • stuff the politicians 3.1.4
        21 February 2019 at 4:59 pm

        And the Farrar idiots that follow him lap it up.

        Those that follow him are no better than the loops who follow that so called messiah from up north.

        You know the one with the Harley’s.

      • Shadrach 3.1.5
        21 February 2019 at 6:07 pm

        “I have never heard of any tax that took account of inflation – including GST and personal tax – have you? Why would a CGT do so?“

        Isn’t that obvious? A CGT is calculated based on the change in an asset value over time. GST and Income taxes are based on transactions conducted in the here and now. You also forgot that income tax rates are occasionally adjusted for inflation aka bracket creep.

        • Pat 3.1.5.1
          21 February 2019 at 6:58 pm

          solution simple….no inflation (or zero growth)

        • KJT 3.1.5.2
          21 February 2019 at 7:05 pm

          The Greens CGT allowed adjustment for inflation.

          Which index do you use, however?

          Using house price inflation destroys the point.

          Tax on other assets held over time, like Kiwi saver, is not inflation adjusted.

          There is really no justification for privileging housing/land speculation, over any other income.

          As. That is the problem in the first place. The tax system encouraging non productive investment in land.

          • greywarshark 3.1.5.2.1
            21 February 2019 at 7:50 pm

            KJT
            Yes, why doesn’t everybody see the skewing of the economy. We are supposed to be a low inflation environment. That is only if you are an economist and have factored out the factor of house prices from the rules governing the considerations for the Consumer Price Index. The Index needs to change and receive a new name so that it reflects the economic climate we all live in.

            • KJT 3.1.5.2.1.1
              21 February 2019 at 8:03 pm

              There has been some attempt by Stats to quantify inflation, cost of living, effects by group.

              I think we all know the economy is skewed. Those who benefit from it don’t want it changed. However. As this thread shows.

          • Shadrach 3.1.5.2.2
            21 February 2019 at 8:01 pm

            Your use of the word ‘speculation’ rather gives you away. And how is owning rental properties a ‘non-productive investment’.

            • KJT 3.1.5.2.2.1
              21 February 2019 at 8:04 pm

              What do you call it.

              Profiteering from tax loopholes?

              The proportion of the expected rising price, beyound that which can be sustained by the earnings from rental income, is obviously speculative.

              • Shadrach …
                21 February 2019 at 8:17 pm

                It’s what YOU called it. It speaks volumes about your attitude to others who you don’t even know, and therefore can’t assume to understand their motives.

                • KJT …
                  21 February 2019 at 8:28 pm

                  Nothing to do with motives.

                  We don’t tax income on, motives!

                  Simply on the amount.

                  • Shadrach …
                    21 February 2019 at 8:45 pm

                    Of course we tax motives. If we purchase a property with the primary motive of making a capital gain, that gain is taxable. But actually that wasn’t my point, and you know it.

                    • KJT …
                      21 February 2019 at 8:53 pm

                      Congratulations. You have just identified the hole in our current CGT.

                      We do not change PAYE, according to, motives. Why do we do it for CGT?

                    • Shadrach …
                      21 February 2019 at 9:32 pm

                      Because capital used to purchase a rental property has already been taxed, and because for those landlords, their primary intention is to be landlords, not property speculators.

                    • KJT …
                      21 February 2019 at 9:40 pm

                      What a dimwitted statement.

                      Capital used to start my business was already taxed. My wages, and also they interest earned, when I saved them..

                      Does that mean I should never have to pay tax on profits?

                      Why should it be different if you choose to buy a house, instead of starting a business.

                    • Shadrach …
                      21 February 2019 at 10:10 pm

                      “Why should it be different if you choose to buy a house, instead of starting a business.“
                      Where did I say it should be? You start a business and buy a house out of tax paid income. In BOTH cases.

                      “Does that mean I should never have to pay tax on profits?”
                      Again, where do I say that? We should, and do, pay tax on trading profits, just as we do on salary and wage income. But we differentiate with capital profits to avoid double taxation.

                      Here, I’ll explain. If you purchase a business, you are doing so out of income that has already been taxed. The operating income from your new business, which creates any capital appreciation, is then also taxed. If we then tax the capital appreciation, we are effectively taxing that gain twice? Which might make you feel better, but it is inequitable.

                      Of course you can make a voluntary contribution to the IRD if you feel that strongly about it.

                    • mikesh …
                      21 February 2019 at 11:09 pm

                      Actually, Shadrach, capital gain on the sale of an asset is paid for by the buyer, who of course will be purchasing with tax paid income.Therefore, if tax is paid as well by the seller on his capital gain this will constitute ‘double taxation’. The buyer is not paying for some service provided by the seller – all he is doing is transferring his tax cash to the buyer to be taxed a second time.

    • gsays 3.2
      21 February 2019 at 1:16 pm

      Huh! You lost me at kiwiblog.

    • Booker 3.3
      21 February 2019 at 1:39 pm

      “I can’t see this being popular, from Kiwiblog”

      Kiwiblog of course being a reliable reflection of NZ at large

      • Mickey Boyle 3.3.1
        21 February 2019 at 5:19 pm

        What and The Standard is?

        • Booker 3.3.1.1
          21 February 2019 at 6:33 pm

          Not representative either, never said it was. If you think either of these reflect a cross-section of wider NZ society you’re dreaming.

        • greywarshark 3.3.1.2
          21 February 2019 at 7:47 pm

          Micky Boyle
          Don’t remember your name before. Are you going to come here and make some illuminating comments? Hope so.

    • Naki man 3.4
      21 February 2019 at 1:59 pm

      “It would be at a rate up to 33%, making it the highest in the world”

      I don’t think that is the highest in the world but certainly near the top.

      “CGT will apply to your main home, if you have flatmates who pay rent”

      So they want to screw people who are struggling to make ends meet.
      What a pack of arseholes.
      lets see if Winston will let NZ down again. Surely this would be the end of him.

      • left_forward 3.4.1
        21 February 2019 at 2:12 pm

        “It would be at a rate up to 33%, making it the highest in the world”
        Yeah like equal 67th!
        https://tradingeconomics.com/country-list/personal-income-tax-rate

        • James 3.4.1.1
          21 February 2019 at 3:17 pm

          Showing amazing understanding of taxation you quote personal tax rates as capital gains tax.

          Genuinely brilliant.

          • left_forward 3.4.1.1.1
            21 February 2019 at 4:05 pm

            Cheers, but I can see how your are confused Jimmy – you have to first understand that income is income wherever it comes from, but you seem to think that somehow income from capital gains is somehow different and sacrosanct.

            • James 3.4.1.1.1.1
              21 February 2019 at 8:34 pm

              Doubling down on stupidity I see.

              • Muttonbird …
                21 February 2019 at 9:20 pm

                Grant Robertson explained this to Larry Williams this afternoon. The calculation of a CGT on an individual’s marginal tax rate mustn’t be taken in isolation.

                While it’s true most CGT would be at 33% (and opponents have been quick to fixate on this figure), because yeah it’s the relatively wealthy who have the assets to sell, Robertson pointed out that other countries with a lower CGT rate have higher top tax rates and other taxes such as stamp duty which we don’t have in NZ.

                In that sense, left_forward is correct in that NZ has a very very low top tax rate.

                Grant Robertson is correct in saying any changes must be taken as a whole and comparisons with other countries must also be considered as a whole.

                • Incognito …
                  21 February 2019 at 9:45 pm

                  The calculation of a CGT on an individual’s marginal tax rate mustn’t be taken in isolation.

                  This one needs to be framed and put on the wall!

              • left_forward …
                22 February 2019 at 7:17 am

                My four year-old granddaughter says the same thing a lot too Jimmy, when she can’t get her own way and is struggling how to express her feelings.
                I know that she will grow out of it and learn how to better communicate.

            • mikesh 3.4.1.1.1.2
              21 February 2019 at 11:14 pm

              Income is income only if it comes from effort, or from the provision of some service. Capital gain comes from neither so it is not income.

              • left_forward …
                22 February 2019 at 7:06 am

                Where is income only defined as coming as a result of effort or service?
                When an asset is sold, the sale is considered income.

        • Naki man 3.4.1.2
          21 February 2019 at 3:19 pm

          “It would be at a rate up to 33%, making it the highest in the world
          Yeah like equal 67th!
          https://tradingeconomics.com/country-list/personal-income-tax-rate”

          You got that wrong. Other countries don’t pay CGT at their personal income tax rate. As it is not fucking income.

          • left_forward 3.4.1.2.1
            21 February 2019 at 4:02 pm

            So does it not ‘come in’ to your bank account?
            Is it not personal?

            • mikesh 3.4.1.2.1.1
              21 February 2019 at 11:17 pm

              Capital gain does not come into anybody’s bank account. It is tied up in an asset.

              • left_forward …
                22 February 2019 at 7:02 am

                There is only ‘gain’ or ‘loss’ when the asset is transferred to cash as the result of selling it. At this point it becomes personal income and under cgt, it is taxable, just like everyone else’s personal income is taxable.

        • alwyn 3.4.1.3
          21 February 2019 at 3:19 pm

          If you are going to make a claim like that you really should find a table of tax rates on capital gains.
          For example the rate in Australia is half the income tax rate.
          It is the fact that they are proposing to use the full income tax rate of 33% that makes it almost the highest in the world.
          I don’t know whether the attached link is up to date but if so only Denmark and France would be higher and there would be a couple of other countries at the same 33% rate as us.
          https://taxfoundation.org/us-taxpayers-face-6th-highest-top-marginal-capital-gains-tax-rate-oecd/

        • Enough is Enough 3.4.1.4
          21 February 2019 at 3:48 pm

          left forward you are talking about two different things. Do some research

          • left_forward 3.4.1.4.1
            21 February 2019 at 3:54 pm

            Income is income, whatever you eat for breakfast.

            • Enough is Enough 3.4.1.4.1.1
              21 February 2019 at 4:22 pm

              If you are going to compare our proposed CGT with that of other countries, then you need to compare it to their CGT rate, not their personal tax rates.

              • left_forward …
                21 February 2019 at 4:27 pm

                I am comparing personal income tax independent of its source. I do not accept your underlying premise that there is a legitimate difference that justifies a separate consideration.

                • Naki man …
                  21 February 2019 at 5:00 pm

                  “I am comparing personal income tax independent of its source. I do not accept your underlying premise that there is a legitimate difference that justifies a separate consideration.”

                  Do you accept that your comment at 3.4.1 is complete horseshit?

                  • left_forward …
                    22 February 2019 at 6:48 am

                    Being a gardener, I value horseshit. But I accept that some people will find it smelly and repugnant.

                • Shadrach …
                  21 February 2019 at 6:11 pm

                  It isn’t relevant what you accept. You quoted a comment by Bridges about CGTs and then tried to refute his figures by erroneously comparing the proposed CGT rate with other countries income tax rates. Either you stuffed up, or you were being dishonest.

                  • James …
                    21 February 2019 at 8:35 pm

                    Or stupid. Very, very stupid.

                    • Drowsy M. Kram …
                      21 February 2019 at 9:23 pm

                      Well played (@3, in order): BM, Alwyn, Shadrach, Naki man & James.

                      “The Far Right troll is like the bacteria of the Internet. The lone Seig Heiler is harmless and irrelevant, but they usually hunt in packs.“

                    • Muttonbird …
                      21 February 2019 at 9:34 pm

                      Sure Drowsy but they are all wrong in the big picture.

                    • Drowsy M. Kram …
                      21 February 2019 at 10:25 pm

                      Agreed Muttonbird. I’m keen on a CGT, especially if it gives Government the wherewithall to adequately fund our still excellent but struggling public health and education workers (not to mention other public servants/services), and foster community resilience.

                      I’d also like a steeper progressive tax system with a higher top tax rate and much less opportunity for ‘legal’ avoidance. Those that didn’t like it could afford to bugger off and enjoy their money elsewhere.

                    • Muttonbird …
                      21 February 2019 at 10:46 pm

                      Yeah. We’ve been hearing how our health system and particularly our treatment of the physically and mentally disadvantaged and also cancer sufferers is poor in comparison to Australia and similar countries.

                      I believe this is because our top rate is too low.

                      It’s very very sad that the idea of lifting the top tax rate is met will threats that people in this bracket with leave the country. I don’t want them to leave the country because they are industrious and clever and we need them. I wonder about their morals though and I just wish they’d buy into the vision of a decent society instead of concentrating on themselves 24/7.

                    • left_forward …
                      22 February 2019 at 6:53 am

                      Nga mihi nui ki a koe, e Hemi.

                  • left_forward …
                    22 February 2019 at 6:52 am

                    Soimon hardly came up with ‘figures’ Shadders.

              • Muttonbird …
                21 February 2019 at 9:32 pm

                That’s just not true. You need to consider the entire tax environment. To not do so is reckless.

            • mikesh 3.4.1.4.1.2
              21 February 2019 at 11:22 pm

              What a stupid statement. Of course income is income. How can income not be income. I think you need to take a course in logic.

      • lprent 3.4.2
        21 February 2019 at 7:31 pm

        …lets see if Winston will let NZ down again. Surely this would be the end of him.

        It must really piss you off having to say that (or a variant thereof) almost every time you come here. I’m pretty sure that it’d be in your earliest comments here somewhere in 2008/9

    • infused 3.5
      21 February 2019 at 2:05 pm

      CGT applying if you have flat mates is fucking insane.

      • Molly 3.5.1
        21 February 2019 at 2:38 pm

        The board received from flatmates up to a certain amount is not taxed.

        “As the income you have received from providing boarding services is less than the standard costs allowed, you will not have to include this on an income tax return, keep records of related expenditure, or pay tax on the income from boarders.

        The standard costs are:

        $263.00 per week for each of the first two boarders
        $215.00 per week for each subsequent boarder “

        There are many who have utilised this exemption to help pay their mortgage.

        It is easy to see how the addition of three boarders – $741 a week tax exempt, is a considerable aid in meeting your mortgage payments. It is not unfair to expect that the equity lift of that property be taxed in some way. But is will be deemed so, by those currently having this exemption work to their advantage.

    • Pamela 3.6
      21 February 2019 at 2:26 pm

      Capital gains will NOT apply to the family home PERIOD.

      • KJT 3.6.1
        21 February 2019 at 3:07 pm

        Unlike National introduced, present “bright line” test.

        You would think speculators in the “family home” in Auckland will be cheering.

        • KJT 3.6.1.1
          21 February 2019 at 3:28 pm

          Correction. Doesn’t apply to “family homes”.
          It should when someone is obviously flicking them off frequently, to earn an income.

          • SPC 3.6.1.1.1
            21 February 2019 at 3:46 pm

            Two types. Its by claiming its the primary residence.

            The investor (often with insider knowledge) who is playing a rising market – a bit like a professional share investor.

            And those who buy to renovate (with input of labour) to add value and then re-sell (works in near all markets with buyers).

            IRD is supposed to tax this as business activity but many/most are not even looked at by IRD.

            If only one of a partnership claim to be living there, they can take turns at it. This allows half the level of activity to be hidden.

      • James 3.6.2
        21 February 2019 at 3:18 pm

        Unless you have more than 4500m2.

        So your period seems to be a little off.

      • alwyn 3.6.3
        21 February 2019 at 3:39 pm

        That seems to be a very bold statement, unless you use a very limited definition
        of “family home”. Are you saying it is not a family home if you have a boarder?

        • KJT 3.6.3.1
          21 February 2019 at 6:42 pm

          If you are earning an income from a boarder, or rent, you can hardly call it, “only a family home”.

          • BM 3.6.3.1.1
            21 February 2019 at 7:00 pm

            My next door neighbour has boarders, she’s a single woman on a limited income.
            Without boarders, she couldn’t afford her mortgage and would have to sell up.

            Are these really the people you should be targeting with a CGT?

            • KJT 3.6.3.1.1.1
              21 February 2019 at 7:11 pm

              Don’t you see the contradiction in that statement.

              If she doesn’t sell up, she doesn’t pay CGT.

              • BM …
                21 February 2019 at 7:35 pm

                Really? so as long as she stays in this house until she dies it’s all cool?
                How about if she decides to sell because of a change in circumstances?

                Because of a CGT she’ll probably have to go to a bank and get a top up on her mortgage if she wants to buy another house of similar value.

                • Pat …
                  21 February 2019 at 7:40 pm

                  what change of circumstance?

                  • BM …
                    21 February 2019 at 7:54 pm

                    what change of circumstance

                    Seriously? are you been purposely thick?

                    • Pat …
                      21 February 2019 at 7:57 pm

                      lol, not at all…the particular change of circumstance would have a significant effect on the impact…so again, what is the change of circumstance?

                • KJT …
                  21 February 2019 at 8:10 pm

                  Same as my kids do if a want to buy a house with their Kiwi saver. That amount is reduced by tax, on income.

                  Or. If I buy a house from wages. Have to top up the amount paid in tax, on my wages.

                  Are you suggesting I should get my PAYE or business tax paid back, because otherwise I may have to borrow the difference, to buy a house.

                • Psycho Milt …
                  21 February 2019 at 9:01 pm

                  How about if she decides to sell because of a change in circumstances?

                  Uh, duh-uh, then a percentage of the percentage of the sale amount that is capital gain gets taken as tax, much like a percentage of my salary is taken as tax. The fact that you don’t like paying taxes isn’t an argument against taxes.

              • Bazza64 …
                21 February 2019 at 8:12 pm

                But when she carcs it, the state will collect its tax. The grim reaper always wins.

  4. Sanctuary 4
    21 February 2019 at 1:02 pm

    Now watch the do-nothing managerialsts of our own little “New Labour” project flounder about shitting themselves at the prospect of doing real reform, before ineptly making sure their timing of their backdown does both maximum political damage to the government and achieves exactly zero outcome for their supporters.

  5. Glenn 5
    21 February 2019 at 1:48 pm

    Exactly what is a family home? My 96 year old mother will probably leave this mortal coil in the next couple of years. Is her house that I and my brother are going to inherit considered the family home and not included for CGT . When we divide and on sell the house is it subject to CGT then?
    After spending much of my twilight years visiting daily and looking after my mother to keep her in her home and out of a rest home I will be peed off if my recompense is heavily taxed. Not all of us are entrepreneurs or well off. Many folk hoping to inherit in these day when folks are living much longer exist only on national super and nothing else.

    • Muttonbird 5.1
      21 February 2019 at 1:52 pm

      Your “recompense” is income for work (as you not very delicately put it). Therefore it should be taxed like all other income. Seems fair to me.

      • Glenn 5.1.1
        21 February 2019 at 2:13 pm

        Didn’t answer my question… Exactly what is a family home? BTW I pay 10% tax on the pension so my CGT should be the same not 33% plus. Seems fair to me.

        • Michael who failed Civics 5.1.1.1
          21 February 2019 at 2:18 pm

          When you inherit capital from your mother’s estate it should be after any gain is taxed. No exceptions, no exemptions.

        • KJT 5.1.1.2
          21 February 2019 at 2:44 pm

          It is proposed that CGT be at your marginal tax rate.

        • Clive Macann 5.1.1.3
          21 February 2019 at 2:52 pm

          Exactly what is a family home?
          One that you and your immediate family LIVE in.
          Not one you inherited from family and wish to onsell.

          • SPC 5.1.1.3.1
            21 February 2019 at 3:32 pm

            The family home of a deceased person is not subject to a CGT. The heirs of the estate receive their share of this family home sale price (less selling costs and estate costs).

            Where there is a such a tax it is called an estate tax, the TWG did not recommend this.

        • left_forward 5.1.1.4
          21 February 2019 at 2:55 pm

          What so hard Glenn? – its a home where you and your family lives.
          Snap Clive!

        • SPC 5.1.1.5
          21 February 2019 at 3:14 pm

          The sale of a owner occupied residential home (including on death) will not attract any CGT – neither to the estate nor to the heirs of it.

          And yes the rate of CGT is dependent on the persons income, so if a landlord held a property until they retired, and the CG they made was the only income they received apart from super, then tax would start at 10.5 cents in the dollar but would rise as the CG income took them into higher tax brackets.

    • patricia bremner 5.2
      21 February 2019 at 2:44 pm

      Glenn, usually there is no cgt on an inheritance. . Inherited value.
      You and your brother agree to sell on estate settlement Sale value
      CGT would apply to any increase between inheritance and sale value.
      In the current market probably none. Cheers.

      • Glenn 5.2.1
        21 February 2019 at 3:09 pm

        Thanks Patricia thats what I wanted to know.

        • patricia bremner 5.2.1.1
          21 February 2019 at 5:07 pm

          Glenn we sympathised. You can love the parent wholeheartedly and still get lumbered.
          We were pensioners with one parent left. She was loved and spoiled in equal measure. However, running 2 households on 3 pensions was difficult.
          We ended up taking out a small mortgage with a view to clearing it on inheriting. This happened when Mum’s car died, both water cylinders blew, ruining carpet and warping floors (Hot water) and in our case demolishing the hot water cupboard and rebuilding it to get the cylinder out, plus finding a slow leak under the concrete outside the house. A nightmare!!.
          So we realise you are not being mercenary, just needing to know the whole thing will end up reasonably fair. It will be, but being anxious about being out on the limb is a worry, Been there done that. Cheers.

          • greywarshark 5.2.1.1.1
            21 February 2019 at 5:32 pm

            The say that bad things come in threes patricia – your count seemed high. You had the next ten years lot all at once.

            • patricia bremner 5.2.1.1.1.1
              21 February 2019 at 6:14 pm

              Sanctuary, Yes and Mum’s unit was in Waihi The town with a hole for mining in town!!
              We sold 2 years after Mum died to another retiree who thought Mum’s unit with safety doors fly screens a hand holds everywhere was just what she had hoped for. Her daughter lives in Waihi so they were thrilled, and we were pleased to clear the mortgage LOL LOL It was a bad year the year we took out a mortgage, but as I say, it took us 2 years and the right buyer before we felt we could sell. Sentimental I know, but it comforts me to know Pauline loves Mum’s place with it’s welcoming feel.

      • Ed1 5.2.2
        21 February 2019 at 3:36 pm

        The summary above is headlines only – Glenn was right to raise questions, and indeed Farrar is useful in setting out some deliberate “personal interpretations” that will need to be addressed, but we cannot expect details from such a summary. Bullet point 5 is a good example – the ‘expected’ response is that capital gains would be taxed on the increase from the value inherited – and if sold on the open market within a short period it is arguable that the sale price should be regarded as the inherited value. Lets wait and see what the full report, and subsequent discussion say.

        I am still concerned that National appear to be saying they would eliminate all capital gains taxes – would my bank sell me a bond with a non-taxable capital gain at maturity rather than taxable interest?

        I was disappointed not to see inheritence taxes proposed – they need have only applied where beneficiaries other than a spouse are receiving value over say $2 million – that would cut out applicability for most families.

    • McFlock 5.3
      21 February 2019 at 3:35 pm

      Hang on, you expect recompense for treating your mother right? Poor woman.

      • Glenn 5.3.1
        21 February 2019 at 4:54 pm

        Nah I don’t but I didn’t expect a government to flog off a third of what I might possibly get (and it appears after enquiring that they won’t). I could take offence with your post McF but I won’t as you know nothing about my situation and you never will. I ask a simple question and I get a cretin like you not offering advice just a verbal enema. BTW my mother isn’t poor, she obviously has a higher intellect than what you displayed with your answer and definitely has much better manners.

        • McFlock 5.3.1.1
          21 February 2019 at 5:02 pm

          Then it’s not bloody “recompense”, is it. Some of us do that stuff with no “recompense” in the offing.

          And don’t be confusing wealth with intelligence – when you get your inheritance, your IQ won’t suddenly increase. You’ll still be the sort of fool who asks commenters on blogsites for tax advice. 🙄

    • Pat 5.4
      21 February 2019 at 7:02 pm

      by ‘keeping her out of a rest home’ you have avoided the clawback on her assets by the residential care subsidy….you want it both ways?

      • Glenn 5.4.1
        21 February 2019 at 8:20 pm

        Actually I would love my mother to be in a rest home. Fuck the cost! I think it would be better for her however it would also kill her within 6 months. The battle to get her into one against her will would destroy the family. She hates socializing and fears rest homes after watching my father in one for 5 years.

        Clawback has nothing to do with it. My multimillionaire investor brother is also against it as it is much cheaper and easier to let younger bro do everything while he visits the area once or twice a year. I on a pension with 2 cancer ops (my daughter has had 3 of the same so I guess I shouldn’t complain) do everything while my mother praises my brother for bugger all.

        As far as clawback may I suggest Pat that you Sheath yours. You know nothing!
        My 96 year old mum has a good chance of outliving me and she has arranged her will that if I die first my wife of 32 years gets nothing! Big brother will do well.

        You folks make people look greedy but you know fuck all what goes on behind the scenes.

        • Pat 5.4.1.1
          21 February 2019 at 8:25 pm

          you assume too much…i am dealing with the same issue (for approaching 8 years) , hence the comment

          • Glenn 5.4.1.1.1
            21 February 2019 at 8:54 pm

            Yeah life shits on many of us. I came on strong but my life ain’t a bunch of cherries and obviously neither is yours. MY commiserations.
            Bro and co are off for their 6 monthly overseas trip in 6 weeks. This time the Baltic and Scandinavia. I get bitter and angry and as time goes on I get angrier.

            • Pat 5.4.1.1.1.1
              21 February 2019 at 9:08 pm

              my life is ok…my parents not so much ….and nothing exposes a family like the prolonged degeneration and difficult choices….anger is not an issue,rather sheer weariness….you will look back and know you have done all you could regardless and that is worth a lot.

        • patricia bremner 5.4.1.2
          21 February 2019 at 9:16 pm

          Oh Glenn, families are complex and no one outside them should get too judgmental about things. All the best to you and your daughter and wife. Try not to be angry as while you have your wife and daughter and they have you, you have the most important things. Being the “Whipping Boy” while the other party is wonderful because they rang or did similar. They never get to stay long enough to get the moans and groans So it goes Never mind mate You have connected here with some Cheers.

  6. riffer 6
    21 February 2019 at 1:51 pm

    Yep, they are fair frothing at the mouth over on that other site aren’t they? Myself, I fail to see why those that make profit tax free from passive vehicles such as investment, believe themselves to be hard-done by when the suggestion is made that they pay tax at the same rate as those who make their income actively. How is it even fair they should not pay tax on income?

    • infused 6.1
      21 February 2019 at 2:21 pm

      You don’t make passive income. You have to declare it and pay tax on it.

      You lot have been duped by your own stupidity.

      • left_forward 6.1.1
        21 February 2019 at 2:44 pm

        You are not making any sense, but don’t worry we won’t tax that!

        • Bewildered 6.1.1.1
          21 February 2019 at 3:26 pm

          If it’s income it’s taxed ie dividends, interest, profit wages, salaries etc, Capital gain is not taxed unless you are actively trading in that asset. If you are going to debate the issue try to understand the concepts Also for the dullards revenue is not taxed ( albeit that what Labour are considering for google and like, a slippery slope for our exporters if trade partners want to retaliate)

  7. riffer 7
    21 February 2019 at 1:52 pm

    Bridges says “This would hit every New Zealander with a KiwiSaver, shares, investment property, a small business, a lifestyle block, a bach or even an empty section.”

    Shee-it. I don’t even have any of those.

    • KJT 7.1
      21 February 2019 at 2:28 pm

      Lies already. Kiwi saver earning are already taxed at your marginal tax rate.

      • SPC 7.1.1
        21 February 2019 at 3:24 pm

        They are indeed. Obviously Bridges (and others in his caucus) is not in KiwiSaver because he has his money in rental property making untaxed CG.

    • patricia bremner 7.2
      21 February 2019 at 3:02 pm

      riffer, at 7 that’s why they are rich and we are not. We get called taxpayers you know… workers to differentiate between us and the silver spoon mob.
      Now the Government is saying.”Let’s have tax on that silver spoon…. whatever the investment is”
      LOL LOl we are taking a few of their lollies so … they squeal because they are not good at sharing. But, if their investment is threatened by tides or fires, they want us to compensate them or help them to protect their wealth…
      That is what they see as fair. “What I get is mine, and if I have to use some of yours to protect it.. well that’s only fair”
      Only we are now saying, “No, you are putting your wealth in things which don’t pay taxes, so we are changing that, so you pay taxes on your investments at a proper tax rate”
      Then the Government can pay for schools hospitals research and development to protect us all from climate change and other events. Here’s hoping!!

    • Alan 7.3
      21 February 2019 at 3:39 pm

      proud of that are you?

      • marty mars 7.4.1
        21 February 2019 at 5:27 pm

        funny the twits nail it. nice to see protectors like judith getting it too – I’m loving the gnat rabble – they are so useless lol

  8. riffer 8
    21 February 2019 at 1:55 pm

    I guess I’m not much of a kiwi then, according to National. No surprises I didn’t vote for them then.

    • Michael who failed Civics 8.1
      21 February 2019 at 2:20 pm

      Many people without capital assets do vote for the Nats. It’s one of the perennial mysteries of NZ politics. I think the cause is the abject failure of the Labour Party to present any alternative to neoliberalism.

      • left_forward 8.1.1
        21 February 2019 at 2:49 pm

        WTF. So when Labour takes steps away from neo-liberalism by proposing a more ‘progressive’ tax proposal, you abjectly fail to acknowledge it, in fact you choose that moment to be critical of Labour for not taking steps away from neo-liberalism!!

      • Bewildered 8.1.2
        21 February 2019 at 3:30 pm

        No it’s because they know thier history re socialism and that individualism, aspiration and accountability is closer to human condition then left wing wooly thinking Commuism and socialism only works at the home front and immediate family level after that it is a crock

        • patricia bremner 8.1.2.1
          21 February 2019 at 5:16 pm

          Bewildered. Communism ok? and Socialism. That is like saying Conservative and Fascist is the same.. Nah. Not even close.

  9. KJT 9
    21 February 2019 at 2:27 pm

    Expect all sorts of lies, obfuscations and excuses, why “hard working Kiwi’s” who make their income from, well, work! should continue to pay the bulk of all tax, while speculators, and income tax dodgers, should be largely exempt, from tax on their income.

    • mac1 9.1
      21 February 2019 at 2:52 pm

      “hard-working Kiwis” is an interesting political ploy.

      I think it means ‘well-off kiwis’ because no one gets wealth by being lazy, eh? Or admits to it. If I’m wealthy it’s because I earned it, right? ‘Us” versus ‘them’.

      It is an argument added to by some religious who say that being wealthy is a sign of one’s virtue and godliness.

      I’ve just started reading a book titled “Democracy in Chains” by Nancy MacLean which outlines the radical right’s stealthy attacks on American democracy. She states in her introduction that there is a move to return to oligarchy as the US had in 1900 in the name of liberty. This is a cover for ‘the insulation of private property rights from the reach of government- ad the takeover of what was long public (schools, prisons, western lands and much more) by corporations, a system that would radically reduce the freedom of the many.”

      She goes on later, talking about a man named Calhoun, “What we are seeing today is a new reiteration of that very old impulse in America.: the quest of some of the propertied t…… to restrict the the promise of d3mocracy for the many, in the knowledge that the majority would choose other policies if it could.” I gather that Trump, being independently wealthy and not beholden to the Republicans, sits outside this group, and actually thwarted their lesser government aims.

      • KJT 9.1.1
        21 February 2019 at 6:56 pm

        Our whole political system is designed to avoid Democracy.

        Hell. we may even vote to tax the rich, instead of letting them squander our money, offshore.

  10. Alan 10
    21 February 2019 at 2:40 pm

    go on labour, do it, and close the door as you leave,
    “if you have flat mates who contribute to mortgage payments , then your home will be subject to CGT”- FFS!

    • KJT 10.1
      21 February 2019 at 2:47 pm

      Like National after their bright line test added a CGT on the family home. Eh!
      I suppose.

      Labour voters are just as likely to see the tax cut to PAYE payers, as a plus.

    • patricia bremner 10.2
      21 February 2019 at 3:15 pm

      Alan, Only if your home grows in value and you sell it, but if you are lowering your mortgage payments and stay in the home.. No cgt.

      • Alan 10.2.1
        21 February 2019 at 3:42 pm

        this will piss off a lot of people struggling to get ahead, say bye bye to those votes labour

      • Naki man 10.2.2
        21 February 2019 at 4:10 pm

        “Alan, Only if your home grows in value and you sell it, but if you are lowering your mortgage payments and stay in the home.. No cgt”

        That is a great way of thinking if you want to become poor. Where do you find a home that will never go up in value? why on earth would you buy it unless you plan to die there?

        • Cinny 10.2.2.1
          21 February 2019 at 4:18 pm

          naki man

          If one loves where one lives, why does the profit margin matter?

          How much property do you own naki man?

          PS if the family home decreases in value, then no CGT to pay.

          • Naki man 10.2.2.1.1
            21 February 2019 at 9:19 pm

            Cinny its got nothing to do with profit.
            i only own one property now, it’s about being able to get ahead so you can get off the treadmill at a reasonable age and enjoy your retirement

            • Drowsy M. Kram 10.2.2.1.1.1
              21 February 2019 at 9:46 pm

              “It’s about being able to get ahead” – of who, or what? What’s with the competitive phrasing?

        • patricia bremner 10.2.2.2
          21 February 2019 at 5:49 pm

          “This is a great way of thinking if you want to become poor”
          Naki man, You may have purchased a modest solid home on a reasonable sized section. You develop both, stay happily for 20+ years, sell and reinvest in another more suitable home for your stage of life.
          Notice I say home, because I don’t see it as a step on a get rich ladder.The home used to be for life… it is the advent of the churn to make money on property that has landed this generation with mortgages which actually fit the name Mort. till death. LOL LOL
          So Naki man, that is exactly what we did, plus we saved for personal pensions, and were able to buy our motor home and spend 5 years getting to know NZ. between 60 and 65. We supported ourselves and let out our unit.
          We have had a happy life. Being rich does not always make you happy. Being secure helps. Also we have found sharing what we have gives the greatest buzz.
          We had working friends to dinner and for holidays and we always had an open home policy.
          We house sat for friends when they went back to Britain to catch up with family, as we were free and could look after their pets gardens and treasures.
          We have had riches through belonging to groups and neighbours, that another two hundred thousand would do what exactly?? That we can’t already do.??
          Cinny you are so right.

          • Naki man 10.2.2.2.1
            21 February 2019 at 6:54 pm

            Well Patricia that sounds really good. Not to many people can afford to do what you have done. If Labour get things their way letting out your unit would be a problem for you. I have similar plans myself, for me its not about becoming rich, just retiring early while i can still enjoy life.

            • Psycho Milt 10.2.2.2.1.1
              21 February 2019 at 9:05 pm

              ….for me its not about becoming rich, just retiring early while i can still enjoy life.

              And that would be just impossible if you had to pay tax on the money you made! Impossible, I tells ya!

              • patricia bremner …
                21 February 2019 at 10:18 pm

                Well we paid tax on the money we made from both working. We were blessed with jobs all our working lives… no income other than benefits is a real problem. That is day to day survival, with no chance to dream and plan. The rates need to rise by 25% at least. These taxes may allow that.

            • patricia bremner 10.2.2.2.1.2
              21 February 2019 at 10:12 pm

              Naki man, we always declared our rent and claimed nothing, putting on the tax paper “Family home let while we travel in our motor home” for the five years.
              We had no problem. Health helped us make our choices, before we were forced to make them. Luckily we agreed how to do things, but that doesn’t always happen. We are so thankful my polio forced our attention to’What can we do?”
              We have friends who worked hard doing up property selling, moving at least 5 times. Finally they sold built a unit on their section with a view.. so happy until it became evident the husband had early dementia. Life is so short and the people are more precious the older we get. So money isn’t so important past a certain point, time and people are. Everyone should have the choice, which means we all need to contribute a fair share of tax.Cheers

    • AB 10.3
      21 February 2019 at 3:48 pm

      And that’s the problem. We have a political and media environment that is so suffused with lies that nothing useful can get done. Labour know this and will back off from the recommendations.

  11. Peter 11
    21 February 2019 at 2:45 pm

    According to the early hysteria, all recommendations in the report are to be introduced pro forma. In fact some of even more limited have some provisions already introduced.
    Poll results do that to you I guess.

  12. Clive Macann 12
    21 February 2019 at 2:56 pm

    People are carrying on like it’s all already been passed into law.
    It’s only a recommendation, so all, or some, or none will get through.

    • KJT 12.1
      21 February 2019 at 3:11 pm

      Yep. Hopefully the bright line test, on those who continually flick off “family homes” for ever increasing amounts, will remain.

      Otherwise a CGT, will not help much in reducing speculation in Auckland houses.

  13. Muttonbird 13
    21 February 2019 at 3:28 pm

    Tax Working Groups have come and gone but politicians have never been able to win the argument required to convince Kiwis a CGT won’t punish them for having a little set aside (typically, in the form of a rental property).

    It’s the use of this sort of language which when embedded into the narrative from the media which can and does interfere with balance.

    Does the same reporter believe tax-payers are currently “punished” by the government for doing what we all do – work.

    https://www.radionz.co.nz/news/on-the-inside/383046/capital-gains-tax-will-take-courage-does-labour-have-it

  14. Roy 14
    21 February 2019 at 3:32 pm

    Why all this whinging about whether “my” home will be included? If you sell it and end up paying taxes, you’re *still making a profit*! Talk about sore winners!

  15. bwaghorn 15
    21 February 2019 at 3:53 pm

    Why do rich arty fartys get a free pass.?

    If I sell a farm that’s had $500k capital gain then buy a bigger farm that has had $1mill capital do I pay tax on the $500k?

    How good for society is people hoarding jewels for a rainy day?

    • SPC 15.1
      21 February 2019 at 4:03 pm

      I’d guess it’s because too many people own paintings and jewellry worth very little (and suggesting people are hoarding rings to sell when their partner dies is very cynical of you).

      As to the farm question, the answer appears to be – not at that time when you trade up. The untaxed CG being carried over and subject to inclusion in the CG to be taxed when the second farm is sold.

      • bwaghorn 15.1.1
        21 February 2019 at 4:06 pm

        So the cgt will.be exempt in the same way gst is if you are changing farms??
        . Both being payable at retirement if you sell up and head to tauranga to die??

        • Andre 15.1.1.1
          21 February 2019 at 4:13 pm

          Whether GST gets paid or not when you sell your farm to go retire next to your parents in Tauranga depends more on the GST registration of the buyer and whether it will continue to be used as a farm or not.

          If you’ve been upgrading farms over your career and rolling over the capital gain each time, then yeah, when you sell up and get out of farming the whole wodge of CGT comes due in one hit.

      • Andre 15.1.2
        21 February 2019 at 4:08 pm

        Instead of a blanket exemption for art etc, the better way is to have a de minimis exemption – it doesn’t apply to items sold for less than $XXXX. Like the de minimis exemption for mail-order goods – when there was less than $60 of duty, GST etc owing, it got let through no charge.

    • Andre 15.2
      21 February 2019 at 4:04 pm

      That situation of selling a farm to buy a new farm might be covered under the life events rollover provision. Or might not. If it all gets as far as a select committee, no doubt that question will get a thorough workout.

      But yeah, exempting art, jewellery, cars and shit like that is just dumb.

      • bwaghorn 15.2.1
        21 February 2019 at 4:09 pm

        I’m pro cgt . But I cant help but feel this will ad to rapid decent to almost feudal times in rural nz were unless your born into land you are fucked ,its serfdom or the city for you .

        • Andre 15.2.1.1
          21 February 2019 at 4:19 pm

          I’ll guess most farms are formally structured as some kind of business. In which case the capital rollover rules will be the same as applies to say a manufacturing business upgrading to larger premises. So I’d be surprised if that situation doesn’t get a rollover provision.

          On the other hand, I’m surprised there isn’t an acknowledgement of inflation in either calculating the cost basis of an asset, or in a reduced CGT rate. So as someone that pays Cullen’s clusterfuck of a Foreign Investment Fund tax, I won’t be surprised to see something maliciously punitive to certain groups come through.

        • KJT 15.2.1.2
          23 February 2019 at 8:31 pm

          Or. A reduction in the volume of farmland speculation may actually reduce prices to the level where a sharemilker can, again, buy their own farm and make a living from it.

          At the moment farm prices are reflective of the expected overpriced sale, not, it’s value as a farm business.

      • SPC 15.2.2
        21 February 2019 at 4:26 pm

        Art, jewellry and cars were correctly exempted.

        Too many small value items and most cars fall in value – so would become a tax write-off.

        And the more people untouched by a CGT the better.

        Selling one farm to buy another comes under the term “stepping stone”, rollover refers to the in family succession to ownership of the estate farm.

        • Andre 15.2.2.1
          21 February 2019 at 4:30 pm

          So high-value art, high value jewelry, classic cars and other blanket exempted items immediately become tax-free shelters for wealthy people to park big sums of money.

          • SPC 15.2.2.1.1
            21 February 2019 at 5:01 pm

            Sure.

            Personally I like the Pocohontas approach (to wealth tax the Donald on the brand value of his name which he claims is an valueable multi-billion worth asset). Because its useful to separate the two issues of a CGT and wealth tax.

            And there is the issue of those buying exempt from CGT items of this sort paying import duties and GST.

    • patricia bremner 15.3
      21 February 2019 at 6:02 pm

      It is suggested reinvestment would not be taxed.

    • Naki man 15.4
      21 February 2019 at 9:44 pm

      They just want to look after the super wealthy so they can have tax free gains from their multi million dollar art collections. Fuck the working class.

  16. Cinny 16
    21 February 2019 at 3:57 pm

    What if….

    Whenever the media interviews or quotes any person about a CGT, they disclose how many properties etc the person has as long as it’s publicly available information.

    For example…. simon bridges (who has investments in 4 properties and is a director with controlling interests in a property investment company) says…… “this is unfair’

  17. millsy 17
    21 February 2019 at 4:05 pm

    By the reaction to this report, one could be forgiven that the TWG recommended an immediate confiscation of all private land and property without confiscation.

  18. Ad 18
    21 February 2019 at 4:07 pm

    i would like to see Robertson come out on March 4th with a fat juicy sweetener such as $0 tax on first $25,000 income. A balancing of pain and gain.

    I’d be happy to campaign in 2020 on CGT +big tax cuts for the lowest. But they can’t just take; they also have to give back.

    • bwaghorn 18.1
      21 February 2019 at 4:13 pm

      They might want to announce the give loudly and early . Or they will be buggered by the ranting and lies of the the nats and co.

    • SPC 18.2
      21 February 2019 at 4:27 pm

      That costs more than the CGT would raise in its early years.

      They are looking at taking the 10.5 cents rate up to $25,000.

      • Ad 18.2.1
        21 February 2019 at 5:47 pm

        It’s not too much to ask for a $0 rate, since the government is asking us to plan our financial lives well in advance, for them to have a plan to do the same as well.

        If Robertson proposed bringing in a massive tax cut for the poorer in the 2021 or 2022 budget, at the same time as phasing in this form of Capital Gain Tax, it would give them some time to plan their own financial affairs.

        And clearly they don’t need the total tax money they are getting at the moment.
        So give it back to the people who could really use it.

    • Michael who failed Civics 18.3
      22 February 2019 at 1:22 am

      And a 100 percent rate on all income above $100,000. Because people will try to dodge it a useful proxy for assessing tax liability at that rate should be party vote preferences: ie all Nat voters should pay the new, second-to-top rate. The top rate, of 200 percent, should apply to all ACT voters because they are even bigger bastards than the Nats.

  20. adam 20
    21 February 2019 at 4:39 pm

    Long live the Beige Revolution!

    Another round of flat taxes and pissing on the poor – Mind you Michael Cullen was chair – so was to be expected.

    One term labour government…

  21. SPC 21
    21 February 2019 at 4:43 pm

    It’s interesting how the TWG has rejected the Green and Labour methods for the CGT. The Greens for a CGT at the marginal rate, but with an adjustment for inflation and Labour for a lower rate as a recognition that some of the gain is inflation – as a number of others have done.

    But of late with inflation so low, this has meant a very low rate of tax on for some large CG – leading to growing wealth inequality (and inequity in taxation rates on various sources of income) and poor government revenue.

    While taxing CG on marginal income tax rates without an adjustment for inflation seems unfair (but with inflation this low its not that big an issue) – these people are not being taxed on the very large CG they will have made up until 1 April 2021, despite the fact they will be realising these gains after this date.

  22. Puckish Rogue 22
    21 February 2019 at 4:45 pm

    Well the accountants will be happy that’s for sure

  23. RedLogix 23
    21 February 2019 at 4:52 pm

    Insanely overcomplicated.

  24. Tuppence Shrewsbury 24
    21 February 2019 at 5:09 pm

    No point opposing the proposals as they are now.

    Clever politics will dictate that they are watered down to be broadly in line with our major political / trading partners like Australia, UK, USA etc

    Then everyone will believe they are being listened too and treated fairly in regards to their concerns.

    Then we have a CGT. well done Grunt.

    • bwaghorn 24.1
      21 February 2019 at 6:28 pm

      Ahh the old start the haggle high then give ground so the losers think they are winning ploy .
      Elegant

      • Tuppence Shrewsbury 24.1.1
        21 February 2019 at 8:22 pm

        Brilliant in its simplicity

        The obverse is when people come at you with crazy shit so you double down

        “I hope you don’t believe in moon landings, no ones landed on the moon”

        …..”you believe the moons real? Deep state got you good”

  25. rod 25
    21 February 2019 at 5:18 pm

    I wonder how many times “Mum and Dad investors” will be heard on tv news tonight.

  26. Peter 26
    21 February 2019 at 6:05 pm

    No surprise, on the tv news are talking as if all the tax stuff is a done deal.

  27. te reo putake 27
    21 February 2019 at 6:29 pm

    In order to save Amy ‘8 homes’ Adams some distress, I’m suggesting an amendment to the CGT.

    When Amy sells one of her properties, the CGT bill should be paid by the evicted tenants. After all, they’ve paid the mortgage, rates and insurance on the place, so why shouldn’t they pay the CGT?

  28. BobandTurtle 28
    21 February 2019 at 7:07 pm

    I own 10 rental properties in Auckland and I have already talked with my lawyers and accountants. There are ways around the CGT which smart people will use. This coalition will never see a cent of my earnings from these properties when I cash up and retire at 50. And what was that I hear? the sound of wailing and knashing of teeth as you socialists try to come to grips with how you lost the next election……..

    • Pat 28.1
      21 February 2019 at 7:12 pm

      youll be really pissed if they manage to enforce it then….remember who ultimately makes and enforces the rules…dont get too cocky

    • KJT 28.2
      21 February 2019 at 7:15 pm

      That makes you a bludger.

    • McFlock 28.3
      21 February 2019 at 7:19 pm

      Oh, those would be the rental properties getting increasing competition from housingNZ that judith was talking about a day or two back? Something about state housing pricing people out of the market? If it’s affecting house prices, it might soon start lowering rental returns. You might want to cash up earlier than you plan.

    • Cinny 28.4
      21 February 2019 at 7:44 pm

      Bob, are you saying you can get around a law that doesn’t even exist yet?

      You must be very very smart, with a huge IQ and large hands. Well done you.

      https://i.chzbgr.com/full/9159664384/hE0B2ABEB/

    • Incognito 28.5
      21 February 2019 at 10:04 pm

      If I were you I’d find some better lawyers and accountants than the ones you currently pay or do they work pro bono for you? They are currently just proposals from the TWG. Nothing has been decided yet, no details have been worked out, and the sky hasn’t fallen yet. The proper professional advice would to wait and see. You’re welcome; it cost you nothing.

    • patricia bremner 28.6
      21 February 2019 at 11:19 pm

      So you are happier to pay trailing fees to lawyers and accountants rather than support the infrastructure? You will pay for every last thing you need right? You won’t come for money from the common purse? After all you didn’t buy into the insurance.. did you?

    • left_forward 28.7
      22 February 2019 at 7:35 am

      Thank you Bob, a brilliant argument for CGT.
      Does Turtle agree?

  29. Pat 29
    21 February 2019 at 7:09 pm

    ask yourselves …..what is the purpose of taxation?

  30. Jackel 30
    21 February 2019 at 7:31 pm

    Heh heh, I just love the intent of this proposal. But I think a fairly simple tax on the valuation of an investment property would be sufficient. Probably not workable though.

  31. mosa 31
    21 February 2019 at 7:34 pm

    To the rich and privileged that live among us i have this message.

    Join the rest of us and pay your fair share of tax.

    Pure and simple.

    • BM 31.1
      21 February 2019 at 7:57 pm

      You probably take more taxes than you give.

      Typical bludging, thick as shit, low brow New Zealander

      Fucking Labour breeding and encouraging this entitlement mentality.

      • KJT 31.1.1
        21 February 2019 at 8:21 pm

        Your typical cleaner adds twice as much to the economy than they are paid.

        A banker costs 7 times more than he is paid.

        Who are the bludgers, again?

        BTW. How much tax have you tax dodging, bludging, National voters, paid? Again!

        • James 31.1.1.1
          21 February 2019 at 11:42 pm

          What about a surgeon. Or a pilot?

          • left_forward 31.1.1.1.1
            22 February 2019 at 7:52 am

            Who would have guessed Jimmy, that you would empathise with BM’s frightened rant?
            Do you also think that low paid workers are bludgers and of less value to society than a pilot, or doctor?

          • KJT 31.1.1.1.2
            22 February 2019 at 11:04 am

            We, highly skilled professionals and trades, pay taxes on ALL our income, believe in a fair go for everyone, and a functioning society.

            No one has ever managed to satisfactorily explain to me, however, that a cleaner, a necessary part of society, doing an unpleasant essential job, shouldn’t get a living wage.

      • patricia bremner 31.1.2
        21 February 2019 at 11:23 pm

        BM Where as you are a product of brains and breeding LOL LOL

      • mosa 31.1.3
        22 February 2019 at 10:55 am

        BM you are a p***k !
        You should stop hitting the bottle before you add comments on this site.
        I have never bludged one cent in my long working life but i have stood back and watched people like you evade paying tax , complain about welfare , pay miserable wages and love the sight of people living in vans and doing it tough so you can feel better when you get home.
        Funny it is people like you that deride the welfare system yet will be the first to put their hand out for a subsidy or make sure their accountant screws every cent out of the government for the business they run and fiddle the system so you pay less tax.
        Thick as shit ? well we all look brighter standing next to bigots like you.

        • KJT 31.1.3.1
          22 February 2019 at 11:11 am

          Yep. Funny that those who moan the most about paying taxes, are the first with their hand out, when things go belly up.

          Like the farmers talking about “Pretty communists” when the other hand was out for irrigation schemes and MB eradication.

          Or. The businesses using WFF to subsidise their miserly wages.

  32. Roflcopter 32
    21 February 2019 at 8:04 pm

    Could have just introduced another tax tier threshold of (say) 66% of anything over $250k, and been done with it.

    Vast majority of NZ’ers would have said OK.

    • KJT 32.1
      21 February 2019 at 8:24 pm

      Just match the Aussie CGT, and tax rates.

      Though. Imagine the screams.

      45% on $180k. Plus State taxes, Medicare and compulsory super. Then CGT, sales taxes and the rest.

      • Roflcopter 32.1.1
        21 February 2019 at 8:27 pm

        Still would have got it across the line easily, but instead what has been proposed will have middle NZ saying “leave me alone”.

        I have $10 on the whole thing being dumped completely by middle of next year.

        Just like every other time it’s been mooted.

  34. CHCoff 34
    21 February 2019 at 8:19 pm

    Capital concentration due to asset acquisition NOT capital concentration due to productive/creative reward is the underlying demand & supply problem – the first has been swamping the second in economic sector activity abit in recent times.

    Societal culture that flows from civic democratic institutions & practises can disincentive one and re-incentive the other.

    Public clarity to such tax issues & solutions would then be natural course in partnership with specialised ministries.

    The independent strength of NZ’s system is under strain though and needs shoring up.

    However that all may be, in isolation, a CGT alone wouldn’t stack up in balance to the opportunity cost of continuity lost in the developing of increased stewardship expertise and problem solving skill sets developed to more dynamic organisational gains.

  35. Muttonbird 35
    21 February 2019 at 9:27 pm

    It’s a real gift to New Zealand that right at the time we are considering reforming the tax system we also have one of the most stupid and doltish leaders of the opposition opposing those reforms.

    Bridges was tired, un-spontaneous and formulaic when speaking to Larry Williams this afternoon. It’s like he wasn’t even trying and dare I say it resigned to the reality that this will go through in some form.

    • Muttonbird 35.1
      21 February 2019 at 9:42 pm

      In fact his major attack on the TWG recommendations was that the very wealthy will just “organise their affairs” in order to dodge it. That to me is such a weak position to be arguing from.

      It reminds me of the talk from one of his mentors, Bill English, when he was caught ripping off the tax-payer when double-dipping on accomodation allowance. He too, without a trace of contrition, simple said he was organising his affairs.

      It’s what the corrupt elite do of a day.

      • Sabine 35.1.1
        21 February 2019 at 9:55 pm

        and despite having spend his whole adult live living of tax payers the double dipper stood there and said ‘he did not understood the rules for accommodation benefits fully and applied incorrectly’. don’t ever forget that. The minister misunderstood the rules as to what is or is not applicable.
        That day he should have been send home to find a job in private business.

        As for landlords that are threatening their tenants with rent increases long before they have sold any of their investment properties, again government could regulate the frequency of allowable rent increases and also the amount, and most of all rent increases should be based on the value of the flat – not he mortgage. Amenities , modernity, fit out, outdoor space etc etc all that should be taken into account for how much one can charge for a rental.

        Reorganizing of affairs is ok, but if the government does its job there won’t be much to re-organise.

        • Muttonbird 35.1.1.1
          21 February 2019 at 10:37 pm

          I’d be happy to pay an extra few percent in tax to give the IRD resources enough to ensure people ‘organising their affairs’, as Simon Bridges puts it, began contributing properly.

          But then the excuse by the conservative right for not doing this is that it might dampen entrepreneurism and investment. It’s like these people need free gifts and eyes averted as an incentive to actually work.

        • alwyn 35.1.1.2
          21 February 2019 at 11:25 pm

          “said ‘he did not understood the rules for accommodation benefits fully and applied incorrectly’.”
          You give that as being a direct quote for something you claim Bill English said.
          What is the source of this quote? You wouldn’t have to have made these words up by any chance?

      • alwyn 35.1.2
        21 February 2019 at 11:22 pm

        ” when he was caught ripping off the tax-payer when double-dipping on accomodation allowance”.
        I’m afraid your memory is very badly at fault. Not unusual for you of course.

        • Muttonbird 35.1.2.1
          21 February 2019 at 11:36 pm

          He’s not called Double-Dipper for nothing.

          That is his legacy.

          Not paying SCF investors $1.7B of hardworking taxpayers money in the dead of the night. Not a phantom social investment idea which never got off the ground after nine years. Not screwing the public service so they can barely operate anymore. Not spaghetti pizzas and forced social media posts.

          Bill will always be known as the Double-Dipper from Dipton. He should have known better but as with all Nats, organising their affairs is the holy grail.

          • alwyn 35.1.2.1.1
            22 February 2019 at 12:02 pm

            Ah, the old fantasy about SCF.
            Have you noticed which doddery old fool was venting his hatred of successful people in the TWG?
            “Sir” Michael Cullen, no less.
            Why don’t you ask him why he included SCF in the guarantee scheme?
            But you won’t do that. It will show just how corrupt your mates are.
            And I notice you make no attempt to justify the “quote” about English.

            • Dv 35.1.2.1.1.1
              22 February 2019 at 7:22 pm

              Missed the word originally
              WHO extended the scheme in 2010?

            • KJT 35.1.2.1.1.2
              24 February 2019 at 8:01 am

              Funny. It was National party insiders who were telling me. “put your money in SCF, we are going to make a fortune with the bailout”.

              I was a bit miffed in their assumption, that my owning a business made me an unprincipled crook, like them.

              The whole thing was a fucking stitch up.

  36. Craig H 36
    21 February 2019 at 10:52 pm

    Seems reasonable – basically, for those in business, capital gains would be considered income and taxed accordingly. Buying a second property or property over a certain size would now be considered a business, and any gain on sale would therefore be taxable income and taxed accordingly.

  37. Dv 37
    22 February 2019 at 11:04 am

    did not see any reference to the valuation date of 2021

    Some the cgt is on growth softer that date at the marginal rate

  38. timeforacupoftea 38
    22 February 2019 at 7:15 pm

    Good bye Labour hello Green Party – you are incredible – the way we all wanted it !
    Love you Marama Davidson !!!!

  39. cleangreen 39
    23 February 2019 at 1:33 pm

    Shit james has sent that many posts and still doesn’t get it right yet?

    “NZ is a very small country with a very small tax base.”

    Many economists have said this over and over.

    Our crumbling infrastructure is the result of nine years of national Government “no spending on infrastructure’ as their “deferred Maintenance” was their plan to rob money for many pet projects that were for the rich.
    Flag referendums
    Saudi sheep bribes for trade.
    Movie bribes for NZ from Warner bros.
    Rich folks boat racing.

    Any many more – to many to list.

    So either we sell the rest of our assets as National did we need urgent funding to get money for much needed infrastructure upgrades to bring us into the 21st Century where we can cope with the increasing population.

    Get it James?

  40. RedLogix 40
    23 February 2019 at 11:41 pm

    Reading this whole thread and considering all the different ways people tend to look at capital gains, with all the complex implications around inflation, family homes, farms, deferred losses and so on …. only reinforces my general distaste for this form of taxation.

    It’s obvious NZ needs to properly tax capital in some manner, but CGT’s tend to be very complex to implement which means two things; it creates special exemptions, thresholds and timelines that open up potential loopholes, and more importantly the investment behaviour message is muddied.

    It all makes TOP’s much simpler and cleaner CCT look positively virtuous.

    • KJT 40.1
      24 February 2019 at 7:54 am

      All your problems with CGT go away, if we simply treat all income, whether it be wages, interest, dividends or capital gains, the same.

      As with GST, get rid of all exemptions.

      If we want, or need to subsidise some sectors, do it openly and independently of the tax system. For example, flood subsidies to farmers.

      Fairness demands it.

      But so does the need to have a tax system, that is not entirely dependent on wage earners.

      Lately Red, I have been wondering if you have “got religion” and joined the right wing?

    • Andre 40.2
      24 February 2019 at 8:17 am

      I suspect that unlike most commenters here, perhaps including you RedLogix, I actually have experience paying capital gains taxes (in the US) and paying taxes conceptually very similar to the CCT (Cullen’s Foreign Investment Fund tax in New Zealand).

      Of the two, I find CGT conceptually simple and it feels fair, being calculated from actual factual numbers and due at a time when the cashflow is there to pay the tax. The FIF tax is neither conceptually simple nor does it feel fair, being based on someone’s imagined number of what an investment *should* return and is due whether or not the cashflow is actually there. The CCT would feel even less fair, being based on someone’s imagined number of what an investment *should* return, in some cases based on someone’s imagined number of what an asset is *worth*, and is due regardless of cashflow.

    • KJT 40.3
      24 February 2019 at 8:32 am

      CCT, under tops plan, is due regardless of cashflow.

      Only the wealthy will be able to afford the CCT, in Auckland.

      Meaning only the very rich or very high incomes, can continue to own houses there.

      If you think there is resistance to the CGT, wait until you try and tax people with no money to pay it.

  41. Pat 41
    24 February 2019 at 11:13 am

    A wandering tribe discovers an unoccupied land and settles. It divides up the land amongst its members and they farm the land growing grain .

    Over time the disparity in the productivity of the land and the ability of the members creates a variation in outputs. Some members of the tribe are unable to produce enough grain to sustain themselves while others produce a surplus which they store, other members provide services for which they are provided grain.

    The tribal leaders ( some of whom are grain storers) are appointed by the tribes members with a stated goal of redistributing the grain to enable every member sustenance….what are their options?

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