Quote Originally Posted by Bjauck View Post
In the NZ context, the fact that the principal household home was not part of the TRG’s terms of reference exempts a significant proportion of household wealth. Nothing should have been off-limits. Our political masters would have decided what to ignore in the report anyway. Just as they are going to do with the actual report.

Why shouldn’t those who, instead of investing their equity and the banks money in a house, invest their equity in a business that earns taxable income and employs other people also have their capital gains on their equity exempted?

Why wouldn’t people over-invest in the exempt household residence? It could be more tax efficient (no income tax or capital gains) than KiwiSaver in its current form.
My point is that the household residence isn't such a great investment, on paper. Running a business or property investment portfolio does allow some tax benefits along the way. But I certainly agree that a business has a harder road to success, and wouldn't want to see the marginal tax rate on that gain, unless it was at some quite high threshold, and/or generated over a short time, as Labour proposed years ago.