Capital Gains Tax

[Bjauck]

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.