Discussing :: Capital Gains Tax - good idea or crap?

#1

Mark
Capital Gains Tax - good idea or crap?

so...how come National is saying it's a dumb idea when everyone else, from Treasury, to independent economists and overseas commentators are saying it's a good idea. It seems to me that it's a little bit of "damn, we should have said that" coming from Key and English.


K

Something I heard and it makes sense is that its another push for successful people to move overseas, or alter there investment portfolios. People that do well, buy investments, take risks, all that get taxed more for being successful ad aspirational. Not sure how fair that is really.

Other aspect not given much light of day is the argument that it will make a more affordable housing market. Most of the evidence is against this, especially as there is a shortage of houses and counties with this tax such as aussie have even more overpriced housing stock. This tax will lower the rental stock numbers and deter developers, potentially increasing rents and maybe house prices.

Blah Blah


JasonMantis

Well, Nationals agenda is to push a society where the rich pay less tax than the poor. It's very self serving.

#2

vipermike_nz

this is a good idea but i think needs a little more thought put into it as well as some more public debate. How does it work in other countries and is this goign to bring the cst of buying a house down or just out the price up for renters.


JasonMantis

I don't think it'll do either to be honest, it hasn't had any effect in other countries apparently.

#3

JohnGx

Can someone explain this capital gains tax in easy to understand english?

#4

vipermike_nz

well if you own more than one property and you end up selling or making money on the property eg from rent or sale then you will be taxed on this at the moment when you sell a property for profit you don't pay much if any tax on it.


Mark

And why, exactly, is that a bad thing?

#5

barnes10

As I don't even own my own house yet I don't have a issue with the Capital Gains tax...however if i did own properties I wouldn't be too impressed.

#6

Steff S

well, there are a few sides to this story. first of all, why didn't labour implement CGT during their decade long stint in power? it was during the low to mid 00's that we experienced a property bubble. That is no longer the case anymore and i'm sad to say that the ship has already sailed. Secondly, New Zealand should be looking to attract offshore investors, our country needs it. CGT is a sure way to scare off any potential investors. Investment properties are a great way to set yourself up for retirement, especially considering that you can't rely on the measly pension in this country.


Mark

Even though the last bubble is well and truly over with, surely we want to prevent another. Labour didn't introduce it during their last term because they would have been tossed out faster than they ended up being because everyone was wallowing in false wealth. Why would a CGT scare off investors unless they want to invest in property (which won't do anything for NZ inc anyway)? Other countries have a CGT - Australia, UK, US, etc - investors aren't scared of investing there. And your comment that investment properties are a great setup for retirement may be okay if you make enough capital gain from the properties, but the money you invest in property would better serve NZ by investing in businesses - which is what the CGT is trying to incentivise. What I don't get is why National and ACT are so opposed to it when an idea like this should naturally come from the right.

#7

DeviousX

Horrible Idea.
Was always going to happen.

#8

JasonMantis

Capital gains tax is the tax on any gain in capital. Not just property. If you sold your company, you'd be liable for tax on the profit you made, just as you would any other income. It's about time we had it, most of the rest of humanity considers it fair, as do I.

#9

Sammy

I think capital Gains Tax is punishing those for getting ahead in life.

My wife and i were planning on buying a rundown house, do it up and sell it for much more than we paid for it. then use those funds to buy the next house and repeat the cycle.

So the difference in the buy/sell price would be taxed. Thus making it uneconomical for us to do it in the first place.

This CGT is just another way to raise funds for the Govt and Keep the poor man down.


DeviousX

My sentiments exactly.


Jabes

But then would you also be claiming all the expenses against your current income and then pay less tax in general? like the majority of people doing that kinda thing are?

One of my mates does that at the moment and even tho he is set to lose money he reckons its a lot fairer. As people who just work and pay tax from that are paying tax on all their income the people who can afford to buy a house claim expenses so get some of their income tax refunded and then profit on the sale of the house and not pay tax on that.

We worked it out he earns close to double what i do and he pays just under 2/3rds the tax i do!

#10

JasonMantis

It's one of the last tax loopholes in NZ. Why have one type of income untaxed, just because it on a house. If I buy cars, or boats and do them up before flicking them on, I get taxed. What's the difference?
The poor man generally has way less capital gain to be taxed, ergo CGT is a tax that attempts to level the playing field by taxing wealthy property investors. Earn money, get taxed, just like everyone else. Really, it's not rocket surgery...

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