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View Poll Results: Should there be a Capital Gains Tax on Property

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  • No

    203 100.00%
  • Yes

    61 58.10%
  • Goff is just an idiot

    2,147,483,655 100.00%
  • Epic fail for Labour

    1,930 100.00%
Multiple Choice Poll.
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  1. #581
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    Quote Originally Posted by SBQ View Post
    The US already has already addressed taxing the wealthy. It's called the Estate or Death Duty tax which kicks in on amounts over $11 Million USD.

    Article says the top 1% need to pay more? I agree they do. But in NZ, let's be real, how wealthy are the top 1% of NZ residents? I would say.. not so wealthy, definitely not when you compare income levels of the upper middle class in the US. There would be only a handful of NZ rich that are in the $500K/year income? Whereas in the US in that 1%, you're going to find a lot more earning that kind of money.

    If CGT is implemented, then the NZ gov't & IRD need to consider removing existing taxes such as FIF (on those with overseas assets). The biggest impact CGT would have is the Kiwi Saver scheme ; it would mean NZ's tax code would look more and more like how the IRS and Australia and most other nations with CGT, address taxation.
    If we are talking about capital gains tax or taxing the wealthy then we should be looking at wealth not income. Apart from a few well-paid CEOs the way you get wealthy in NZ is from capital gains, not income. And yes Estate or Death Duty tax should be re-introduced.
    https://www.stuff.co.nz/business/mon...-will-tell-you
    It shows the top 1 per cent of individuals owned around 20 per cent of the country's wealth at the end of June 2018, and the top 10 per cent owned 59 per cent of the country's wealth.

  2. #582
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    I don't really agree with either. The gift duty can be changed though so people can't switch between structures to avoid tax as easily. sadly its another legacy item from sir john and sir bill to resolve.

    Move to stop all the tax avoidance so people pay what they should be paying here instead IMO.
    Last edited by Panda-NZ-; Yesterday at 07:57 AM.

  3. #583
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    Quote Originally Posted by Panda-NZ- View Post
    There is a portion of Kiwisaver, maybe the majority, where tax isn't paid since its a capital gain.

    Also keep in mind that it cannot be retrospective which means that you keep all of the existing gains to the current date which is quite fair.
    Managed KiwiSaver funds pay taxes in the same manner as paying corporate taxes (this is what a financial advisor told me at a neighbourhood gathering). If this information is wrong then I stand corrected. The shareholders have a RWT to account for dividend payments which is treated differently than taxing of the gains. To bring in a CGT, there needs to be consideration of already existing taxes on gains in different asset classes. For eg. if a person is day trading shares (or frequently buy / sell like managed funds do ; with the INTENT of profit), then the gains are taxed at full income / corporate rates.

    What's the most compelling issue i've found with financial advisors in NZ is a lack of consensus on advice. This is very different to what i've seen in Canadian afternoon TV hosting 'Finance Talk' programs to educate the public, and what these financial advisors say is pretty much widely accepted. Here's one perspective of a NZ advisor:

    https://nestegginvestments.co.nz/ind...-always-taxed/

    "This different tax treatment is sub-optimal, and unfair for NZ based funds. But until this situation changes, from a tax perspective only, it is preferable to hold international shares via foreign-based funds (or direct investments in overseas companies). "

    Of course no financial advisor gets a commission telling clients to invest directly by themselves or choosing the lowest cost option of owning shares 'outside of a managed fund'.

    So the issue whether CGT is taxed 'retrospective' or not is of no difference, the NZ investor is already paying taxes on their investments in so many different ways. Perhaps Jacinda Ardern didn't realise this and at the time she looked at making a decision to bring in CGT or not, she found out she couldn't arbitrarily single out CGT on the residential property market.

  4. #584
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    Quote Originally Posted by moka View Post
    If we are talking about capital gains tax or taxing the wealthy then we should be looking at wealth not income. Apart from a few well-paid CEOs the way you get wealthy in NZ is from capital gains, not income. And yes Estate or Death Duty tax should be re-introduced.
    https://www.stuff.co.nz/business/mon...-will-tell-you
    It shows the top 1 per cent of individuals owned around 20 per cent of the country's wealth at the end of June 2018, and the top 10 per cent owned 59 per cent of the country's wealth.
    While i'm not against taxation, why is it no one really addresses 'how much taxes' should a person pay in NZ? In my recent post here I made the comparison of the top 1% earners in NZ vs the 1% in America. What NZ politicians seem to miss out is how much more is expected out society to pay in taxation?

    Perhaps question why NZ Gift Duty and NZ Estate Death taxes were removed in the past? I think the answer was more along the lines of NZ's failing brain drain and flight of capital overseas. You had NZ charities that struggled because of the Gift Duty that limited donors from achieving anything (I recall Jane Cameron ex-Katmadu wanting to make a generous gift in NZ but ended up moving to Australia). We live in a global world and there are no laws 'yet' that stops a person from declaring non-residency in NZ (so easily achieved by just flying to Australia). Where I grew up in Canada, a decision to declare non-residency is not so easy achieved because one can't simply say they just want to move to another country. A green card or residency visa is required in the US if a Canadian wants to live there. It's not so simply as a Kiwi hopping on a plane and flying to Australia when ever they want to.

    So this brings back to my original point, if you want to compare the top 1% of the people in NZ, look who they are? Are they really make a lot of money or wealth? More importantly, are they the LAST egg left which Jacinda Ardern has been cautious about imposing CGT (or any new tax) to them? Believe me, Canada has had it's fair share of wealth leave the country throughout he 90s and 2000s (mostly due to brain drain and the wealthy sending their assets abroad).

    @ Panda-NZ: I don't really agree with either. The gift duty can be changed though so people can't switch between structures to avoid tax as easily. sadly its another legacy item from sir john and sir bill to resolve.

    Move to stop all the tax avoidance so people pay what they should be paying here instead IMO.
    As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.

    So I ask again, how much taxes should a NZ resident be paying? More specifically, how much should the top 1% should be paying in NZ? Because these groups of people are the most likely to move to more tax friendlier places like in the US (as what we've recently seen from the EU's hunt for taxes).

  5. #585
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    Quote Originally Posted by SBQ View Post
    …If CGT is implemented, then the NZ gov't & IRD need to consider removing existing taxes such as FIF (on those with overseas assets). The biggest impact CGT would have is the Kiwi Saver scheme ; it would mean NZ's tax code would look more and more like how the IRS and Australia and most other nations with CGT, address taxation.
    I guess the FIF regime is supposedly an “income” tax. Even if in some years the use of the 5% “Fair dividend” rate is in effect a tax on imputed income, where there has only been a increase in unrealised capital gains without any dividend paid during the year. I guess this may result in the taxpayer selling down their overseas investment to pay the tax levied on unrealised returns on the investment. Would CGT be in addition to that when it comes to FIF investments?

    NZ is on track to reaching the American levels of wealth and income of the top 1%. Disparities are growing. We currently have no death or estate duties, plus no stamp duties, comprehensive capital gains or capital taxes. Wealth is increasingly becoming concentrated in the top circle of families....

  6. #586
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    Quote Originally Posted by SBQ View Post


    As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.
    Every country will be looking to raise taxes soon. These views are pretty out of date, you may not have noticed the huge numbers of skilled people busting down our doors atm to come in. It will be even more in the future as climate change causes resource and water shortages. Taxes are way down the list.

    We need a fair return from these people.. How much should they pay? more than 0% for a capital gain.
    Last edited by Panda-NZ-; Yesterday at 04:23 PM.

  7. #587
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    Quote Originally Posted by Bjauck View Post
    I guess the FIF regime is supposedly an “income” tax. Even if in some years the use of the 5% “Fair dividend” rate is in effect a tax on imputed income, where there has only been a increase in unrealised capital gains without any dividend paid during the year. I guess this may result in the taxpayer selling down their overseas investment to pay the tax levied on unrealised returns on the investment. Would CGT be in addition to that when it comes to FIF investments?

    NZ is on track to reaching the American levels of wealth and income of the top 1%. Disparities are growing. We currently have no death or estate duties, plus no stamp duties, comprehensive capital gains or capital taxes. Wealth is increasingly becoming concentrated in the top circle of families....
    Yep, this was the issue I brought up last year when Jacinda had this TWG discussion - what would be done to the existing NZ investments made in pension funds etc that already paid taxes? It was clear what the public wanted in NZ (the Labour voters) was a tax on residential properties. Too many of the rich had come from owning large portions of real estate in NZ but Jacinda, in her mind I suppose just couldn't do it. As the TWG suggested it could lead to political suicide or worse, a huge flight of NZ capital to abroad - if NZ's real estate market collapsed, it would have huge repercussions on NZ's bond rating and monetary / fiscal management on the global level.

    I do agree in NZ, the disparity gap between the rich and poor is growing. A good proxy is look at all the private schools and how much they charge rich families that send their children there. It's an issue and commitment i'm not use to as I grew up in Canada. Private schools in primary & secondary are rare and only for the ultra elite and they still ended up attending the same universities around Canada. The compelling distinction I learned was Canada having the top 1 or 2 rank of 'attainment' levels in the world (ie. those carrying on to post secondary education) ; it's not the result of being rich or poor but rather, their public education must be doing something right.

    @Panda-NZ-: Every country will be looking to raise taxes soon. These views are pretty out of date, you may not have noticed the huge numbers of skilled people busting down our doors atm to come in. It will be even more in the future as climate change causes resource and water shortages. Taxes are way down the list.

    We need a fair return from these people.. How much should they pay? more than 0% for a capital gain.
    That may be true - but I would put my $ on it that America would be the place to raise taxes the least for the simple reason, they have the buffer room. Places like NZ and Canada, if they impose more taxation, the result would be quite devastating. Remember the laws around gifting and moving assets around? Don't forget, the US has the advantage of bank secrecy laws (absence of CRS and impenetrable of NZ's FMA regulation laws).

    Who are the people that are busting down the doors to get into NZ? From what I can see, they certainly are not the rich. It's already been proven that of the elite Chinese wanting to get of China, their top destination is the US or Australia:

    https://youtu.be/qP-lnn-kwPA?t=154

    Just like in the education wrap, those that don't get accepted into Cdn or American universities, they work their way down the list to the next country - NZ gets the left overs.

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