The key to exempting CGT on the personal residence is the fact people need to have a roof over their head. It goes along the lines why Australia and Canada have exempt GST on fresh foods because these taxes are punitive to the low income families. Clearly not an issue about tax equalisation or for efficiency but rather, more to tax those that have $ FOR investments. We have 'Income" taxes. Why can't we have taxes for those that have "Capital Gain" ????


aaron: I just don't buy the argument that a CGT will cause capital flight and cause the ruination of our society. If the well-off are threatening the rest of society because their wealth is so great they can destroy a country pandering to them and letting them become even more powerful won't make society any better.
When you have a country where the top 5% owns like 80% of the wealth of the country, you can be sure they won't be stupid with their $. Brexit is a clear example. Yes NZ won't be destroyed but when you look across the seas how other nations have prospered, i'm in no doubt people in NZ don't have the same living standard as my friends that left to the USA or stayed in Canada or moved to Australia. I know there are exceptions but when I can see my friend that dropped out of highschool (growing up in Canada), moved to the US, he's amassed more wealth and lives in a far better house, driving the latest Tesla Model S P100, (and his wife an anesthetic RN at a hospital in Cali - she also dropped out of highschool) than any of my highly educated cousins that grew up in NZ with all the degrees. But you don't even have to look at the academic aspect, I look at how much timber costs to buy in NZ to build a house vs to buy at Home Depot in Canada or in the US ? It's very clear these differences in price are due to difference in standard of living. What we pay in taxation for social gov't health care is comparable to the Cadillac health care plans my friends pay in the US. Anyways i'm mumbling off topic.

re minimoke: any improvements like your irrigation and landscaping can be valued independently if you feel the CCC GV doesn't fully reflect your home property value. There's no need to keep receipts of how much hoses and pipework costs. But why let the accountants be busy? Exempt the family home and that's 1 easy way to say you've earned it. As for those that venture to owning several houses for rental properies, slap the CGT on them in every way.

The Asian investment in Auckland's market is nothing unique. I'm very well aware of it and being quite familiar with the Vancouver housing market in BC, Canada, I do feel the NZ Labour gov't is going a bit too aggressive but simply banning non-residents. When Trudeau was elected PM in Canada, one of the things he did was tacking the house prices in Vancouver and it's worked (not by banning them.. but by simply taxing the hell out of them). By no surprise, a lot of $ from China went into the real estate market ($ from questionable sources - laundering, etc). So rather than the Cdn gov't trying to enforce anti-laundering laws, they attacked these wealthy migrants parking their 'black' money into the real estate by using the "residency clause" in the Cdn ITA. You could say Canada is being half hearted when it comes to anti-laundering laws but IMO, I see no harm in the gov't taking that $ - ?? Why couldn't the NZ gov't do the same? Just send out investigations on these real estate investors from abroad and slam them tax on the gain or CGT. Because in Canada, what these rich migrants were doing is buying the house and claiming the house as their "personal residence" to be tax free, while their high income overseas was not taxed in Canada (like NZ residents are taxed on a world wide basis). Furthermore Vancouver slapped on a "Vacancy Tax" aiming at foreigners buying houses and leaving them empty (as vacation homes for the rich). Can you believe in the 1st year of introduction of that tax, the municipal gov't raked in over $30 MILLION !!!! That's not chump change and the NZ gov't could of done something similar. After all Winston Peters did visit Vancouver shortly after winning the coalition election in NZ so he should of learned some ideas.