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

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  • No

    213 100.00%
  • Yes

    74 56.49%
  • Goff is just an idiot

    2,147,483,658 100.00%
  • Epic fail for Labour

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  1. #341
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    Quote Originally Posted by SBQ View Post
    I've learned something new and it seems Australia copied the Canadian CGT model of allowing 50% of the gain only taxable. Previously Australia use to 'index rated' the gain with inflation. I suppose it was too much checking with tables and seemed more simple to apply a 50% cut factor.

    All in all, if Canada and Australia have a decent working CGT model, then why would such models be considered "complicated" for NZ? I mean are NZ accountants unable to manage? Is the Australian person more capable of understanding CGT than the Kiwi? I'm sick of hearing excuses that CGT with concessions or exemptions would be too complex for NZ
    Tax systems and rules differ in each country. So it does not necessarily follow that the Australian CGT scheme should be implanted into NZ.

    For example Australian pension account balances are taxed at a concessionary 15% rate for both income and capital gains. (NZ KiwiSaver balances are taxed at the taxpayer’s full PIE rate which could be 28%). So for NZ to exempt the family home from a CGT without offering reduced taxation rates on KiwiSaver balances, could well see a greater move into over-investing in the family home as a de facto pension scheme - more so than in Australia.

    Australia and the UK have stamp duty regimes on house transfers. NZ does not. I think In Australia the stamp duty for a $900,000 home for an owner-occupier is $36,000. So if we follow Australia in exempting the family home from a CGT, perhaps we would need also to introduce their type of stamp duty scheme on home sales.
    Last edited by Bjauck; 24-02-2019 at 01:25 PM.

  2. #342
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    Quote Originally Posted by percy View Post
    My brother has lived in Australia for over 40 years.
    He tells me working out his tax and CGT is a nightmare.
    Yeah it could be complex and would increase compliance work and costs. It needs to be a K.I.S.S. scheme unless the government wants taxpayers to boost accountants’ Income.

  3. #343
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    Quote Originally Posted by Bjauck View Post
    Tax systems and rules differ in each country. So it does not necessarily follow that the Australian CGT scheme should be implanted into NZ.

    .
    Government did it with safety laws after Pike River

  4. #344
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    Quote Originally Posted by minimoke View Post
    Government did it with safety laws after Pike River
    Do you think we should introduce the Australian tax system to replace the NZ tax system?

    There are ways in which the NZ tax system already taxes as income some capital gains and indeed wealth.

    So to introduce just the Australian capital gains tax regime would be blunt and without significant review of existing tax provisions, it would involve double taxation.

    Compared to Oz, implanting the OzCGT scheme into NZ would also make trading up the housing home ownership ladder with owner-occupied home ownership significantly more tax efficient to other investments taking into account the absence of stamp duties on NZ house transfers and lack of concessionary tax rates on the income from KiwiSaver pension balances in NZ.
    Last edited by Bjauck; 24-02-2019 at 01:46 PM.

  5. #345
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    Quote Originally Posted by Vaygor1 View Post
    I'm with you SBQ.

    They pulled the same stunt with GST.

    Aussie's GST model far superior to NZ's and everyone over there copes easily with the GST exemptions that, by rights, New Zealand and New Zealanders should also have.
    Don't overlook the downside of CGT in Australia - particularly its effect on industrial properties.

  6. #346
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    This is pretty much my summary of why I'm happy for a CGT. Regardless of $1 or $5Million I see no reason for why income & capital gains shouldn't be taxed to make it more fair for all. Yes it's going to be tough for the middle class but fairs fairs...

    Attachment 10341

  7. #347
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    Quote Originally Posted by FIsaver View Post
    This is pretty much my summary of why I'm happy for a CGT. Regardless of $1 or $5Million I see no reason for why income & capital gains shouldn't be taxed to make it more fair for all. Yes it's going to be tough for the middle class but fairs fairs...

    Attachment 10341
    Interesting chart FIsaver. I saw this comment from David Slack on CGT in the SST yesterday.

    https://www.stuff.co.nz/national/pol...he-tax-we-need

  8. #348
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    Oldie but a goodie why tax, especially a progressive tax system is unfair:

    https://www.youtube.com/watch?v=S6HEH23W_bM

  9. #349
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    Here we go again (and i'm being sarcastic) . The NZ voice speaking out that what other large nations are doing is not so good, and NZ can go and try and do it better. So their CGT (or tax system) isn't so "fair" and NZ is out to try and reinvent the wheel (among many other things). After all, "We have a population of 4.5M people, we're SURELY to do better than the 350M people in N. America or the 23M in Australia" or perhaps all of Europe?

    Quote Originally Posted by Bjauck View Post
    Do you think we should introduce the Australian tax system to replace the NZ tax system?

    There are ways in which the NZ tax system already taxes as income some capital gains and indeed wealth.

    So to introduce just the Australian capital gains tax regime would be blunt and without significant review of existing tax provisions, it would involve double taxation.

    Compared to Oz, implanting the OzCGT scheme into NZ would also make trading up the housing home ownership ladder with owner-occupied home ownership significantly more tax efficient to other investments taking into account the absence of stamp duties on NZ house transfers and lack of concessionary tax rates on the income from KiwiSaver pension balances in NZ.
    Perhaps question why so many are able to invest in NZ real estate and ABLE to pay not a single dime of tax on the gain of the asset upon time of sale??? When I first came to NZ, I thought it was VERY "blunt" that such an asset class was left untouched of any taxation. The excuse I was told then was NZ is a small country and deserves some perks.

    Trading up the house home ownership? You mean it's a bad idea for people to value and treat their primary residence as a prized asset (for where they will make improvements), than an asset of financial gain? It's goes to show when Kiwis want a better home, they don't improve the house they live in, instead they sell the house and buy a NEWER house that has the improvements. It's a behaviour no different to changing cars.

    Stamp duty is essentially no different to a GST on the sale of the house. But why do most houses in NZ don't have GST on them? Other countries have some form of 'sales tax' when it's changed hands. In Canada many provinces have a tax on the 2nd hand cars that get sold (PST). Are you saying that NZ already has enough taxes? I say NZ has been too generous to the top 10%.

    Again, am I led to believe that the average Australia, Canadian, or American is smarter, more understanding about taxation and finance, then the typical Kiwi? My experience from speaking to various NZ financial advisors is, they fail to give me a straight answer regarding taxation & finance. When I grew up, CFA exams require all financial advisors to be fully updated with taxation laws. In fact, in almost every case all the finance advisors (N. America) have to give advice from the point of taxation. But in NZ, i'm compelled to believe they can not give advice from a tax point of view and say "you must also seek a tax accountant specialist". How complicated is that? As complicated as building a multistory house because all I see in NZ new sub-division builds is the same single story houses (can blame the NZ RMA for that).

  10. #350
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    Quote Originally Posted by FIsaver View Post
    This is pretty much my summary of why I'm happy for a CGT. Regardless of $1 or $5Million I see no reason for why income & capital gains shouldn't be taxed to make it more fair for all. Yes it's going to be tough for the middle class but fairs fairs...

    Attachment 10341

    That chart applies to the USA. The primary residence is a much much greater component of NZ household wealth with shares and retirement savings comprising a much smaller component of household wealth in all wealth bands. A CGT in NZ would bring in much less tax as the primary residence exclusion would remove a much greater percent of capital assets.

    Add to that the facts that the lack of property transfer stamp duties and the NZ share market is so comparatively small for the size of the economy, then a CGT on investment housing would probably just mean that more middle class wealth will end being diverted into the primary residence (especially for those that do not need to earn taxable income from their wealth).

    So it would not be fair for those who invest their capital in productive assets instead of a primary residence. In NZ do we really need the primary residence to be given another tax break?

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