Opinion: Bernard Hickey argues Labour should introduce a land tax as well as a capital gains tax to increase savings and shift investment. Your view?

By Bernard Hickey

Labour threw what appeared to be a grenade into the debate around tax this week, but a Capital Gains Tax is not the economic shock or the disaster that John Key has portrayed it as.

The Tax Working Group spent much of 2009 considering various tax reforms for income, land and capital that would change the structure of our economy. This group of experts from academia, the bureaucracies and the accounting industry recommended a capital gains tax, possibly a land tax, a GST increase and income tax cuts.

They argued distortions in the tax system in favour of property were a driving factor in the boom in house and land prices from 2002 to 2007. The scale of the damage shouldn't be under-estimated. The surge in foreign debt that came with this boom drove up our currency and hammered our export sector lower. It accelerated the need to borrow even more and sell more assets.

This boom created a generation of very wealthy property and farm owners, yet created a legacy of foreign debt that young New Zealanders will eventually have to repay. It also drove house prices in our biggest cities beyond the reach of those young New Zealanders. It's no surprise many are choosing to leave for higher wages and the prospect of a clean start elsewhere.

So many of these experts were deeply disappointed that Prime Minister John Key decided to cherry pick the income tax cuts and the GST and leave the capital and land taxes on the shelf.

He was effectively saying he had no real intention of addressing the structural imbalance that is killing our economy. Changes to rules for depreciation and Loss Attributing Qualifying Companies (LAQCs) made a difference, but only at the margins.

In the wake of the collapse of finance companies and the slide lower in bank deposit rates, investors are just as keen to put their money into housing in the hope of making tax-free capital gains. House prices are rising again, particularly in Auckland. Since the Prime Minister ruled out a capital gains tax or land tax in February 2010, housing loans have risen by another NZ$3 billion to NZ$172 billion. The currency has risen from 70 USc to 83 USc, in part because of the foreign borrowing and relatively higher interest rates caused by this pro-property structural imbalance.

The Prime Minister's refusal to consider a land or capital gains tax reflects a political decision to favour a generation of property owners over the long term interests of not just the economy but those young New Zealanders who don't own property and will inherit the debts of their parents. His refusal to take advice from his economic experts on the property sector is at least consistent. He is doing the same thing by refusing to even consider delaying the age of NZ Super. The Prime Minister is not governing for the nation. He is governing in the interests of property owners and the elderly who created our crushing debt load.

Labour's decision to try to break the political impasse should be welcomed, but it doesn't go far enough. A capital gains tax will be complicated and raise a relatively small amount, although it will fire a potent shot across the bow of property investors. The best way to raise revenues and make a long term difference is to impose a 0.5% land tax with a relatively high tax-free threshold and the ability to defer payment until a property is sold. It would raise around NZ$2.3 billion a year and should be used to reduce Government debt and reduce pressure on the exchange rate.

If we don't urgently move to cut debt, push down our currency and encourage productive investment we are sending a big signal to our young to visit an airline website to buy a one way ticket.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Won't the Labour proposal, that the cost for CGT purposes be set at time of implementation be a factor for people to buy up before they get to be the government?- seems as if JK has a hold on things for this election (with a considerable number of traditionally Labour voting Christchurch people probably not registered, to add in calculations), so Labour may be in a position by November 2014 to challenge for government benches- will that mean people will try to buy up large before 2015? Or will they make it retrospective to time of announcement this year,  if so they will stay in opposition longer as they are already on record as saying no retrospective taxation.

And, I am wondering if you are a National plant Bernard, egging Labour to bring in a Land tax, as well as a GCT, to ensure their political oblivion for several terms.

If you buy ahead of CGT, muzza, or any change to the taxation regime, then you have to look at 'who are you going to sell to?" after the changes. The buyers after-the-fact, will have to factor in a cost you did not have to ie: they will have less to spend on the principal of the property ,as they have to allocate more to taxes. So, I'd be a seller ahead of any changes, not a buyer :)

When the depreciation tax policy changed last year, I thought it was a good policy to bring th house value down. I changed my thinking this year after landlord increased my rent for $50.00.



All for it Bernard, and for once Gummy will be singing your praises.

Commie pinko SOCIALISM!!!

yeh especially since virtually all classical economists advocated a land tax as the most equitable and just form of taxation. John Stuart Mill, David Ricardo, Adam Smith, Jacques Turgot etc etc. As an anarchist I believe no tax is the best tax, but I agree with the classical liberals that under the circumstances that within the limits of the capitalist political economy, a land tax is the best option. 

I think I agree with the Prime Minister, Bernard. You need to get a life.

Given NZ's penchant for PI, would you expect the PM's 'Blind Trust' to include a fair % of PI?

I mean, it's mean to be a 'Blind Trust', not a blumming 'Stupid Trust'! 

So what else would you expect one of the 200,000 (just 5% of us) not so "everyday New Zealanders" to say? 

Keep at it Bernard me and Gummy think you are doing a grand job.

Cheers, Les.


Well one way is if it all goes pear shaped is just about all the private debt gets moved to public debt as the Banks go insolvent when the property buble bursts....aka Ireland for instance. 

So its expected that we the tax payer will bail out the PIs and banks, neither party is innocent here, both are gambling with others money and futures for thier own gain....I just hope the NZRB's plan to seperate out the retailing and credit sides of a bank happen before this occurs....but Im pretty sure its been left too late. Such a scheme I think would take 2 or 3 years to impliment and I dont think we have that long...maybe 18 months....I suspect < 1 year though.

The other way is younger ppl have to take on huge debt on over-valued property in order to won their own home....even it property stagnates (which is the best that can be hoped for IMHO) its still a huge burden of money/profit being exported out of NZ....the biggest likelyhood however is a decline and it could be very steep, say 50% in 3 years doesnt seem impossible to wonder about......

Then in a depression there are the businesses who go bankrupt...this weighs on a bank especially given the very high gearing....I forget the numbers but I think its something like 5 or 10% loses would make make banks insolvent as their cash reserves would be exhausted and they shouldnt continue trading, I think most US banks are in that state....


No, quite the opposite....free banking is what in effect America had and it was a free for all, that was and is a disaster....the Fed probably could have done and could do a decent job if its wasnt so interferred with and so dogmatic...and that Nations Pollies wee not so corrupt.

Our RB didnt do so badly given the limited amount it was allowed to do....Im quite happy to blame Labour for basically allowing the bubble to inflate because that gave them the tax income to spend on its social policies.....and, National would have been no better.



Steven do you fancy elaborating what you mean by the FED being interfered with ?

hey Bernard, 

It'll work itself out in due course. As the prohibitively high property prices and burdensome levels of tax and interest rates brought on by the profligacy of the Baby Boomers continue to drive young New Zealaners offshore (I will soon be one of them), they will have no one to sell too and real estate prices will nosedive, unless Asian immigrants and investors cease to be drawn solely to the bright lights of Auckland and push out into the rest of the country. 

I know a young lady that lives in Hamilton. Had a very modest upbringing. She works hard, budgets hard and saves all she can. She has a modest run around car, no new cell phones every year, op shops a lot, seldom buys coffee and is so happy. She has just bought a nice little unit in Hamilton for $240,000 as her 1st house. I dont know what she paid as a deposit but it would not surprise me if it was a reasonable amount.  The place needs doing up and she is into it already. She is going to paint the place this summer herself. The gardens are getting planted out now with a space for a small vege garden. She repaired the boundary fence, with help from her brother. Its her pride and joy. I admire her get up and go attitude. She will move on to better places in the coming years but is prepared to start at the bottom. Too many people today want to start at the top and moan their guts out, Poor me. I know she will stay in NZ and will succeed in what she wants to achieve. Its a pity there were not more people like her with a bit of guts and determination and NZ would be all the better for it.

The problem is that first house should have cost $180,000, not $240,000.

Actually maybe $120k....


I put the fair value (i.e. had the bubble not happened) at $163,200.



Too true. If the baby boomers refuse to share the cake, they'll miss out on the cream!

Over the next decade or two, many will be looking to sell and downgrade to smaller homes. What they will find is that they can't sell their homes for the prices they expect/demand!

And by the way Anarkist, where are you planning to go? Australia or the UK or? I've always liked the thought of Canada or Scandanavia (I enjoy the cold - language could be a problem in the later though) However, it's a shame AUS, UK and Canada all have their own property bubbles... even more so that NZ!

hey RPCAS,

Well put!! Or rather they want to eat the cake with a big dollop of cream, but the creams gonna become rancid and they'll choke on the cake, haha. 

Its not just property thats involved but all classes of investments. I became aware of it after reading Rich Dad's Prophecy by Robert Kiyosaki, where he claimed that in 2016 Stock Markets in the developed world and especially the United States will collapse because people will be forced to sell their assets invested through the ERISA scheme, because its mandated in the Act which created it, though about the time of the Financial Crisis I vaguely remember that one of George Bush's last acts was to amend that requirement. I'm not sure I can't find any online reference to it anymore.

ERISA requires mandatory withdrawals beginning at age 70.5. The bulk of the baby boomer generation will be reaching this stage in life around 2012. This influx of forced sellers will drive the equity market down.


I'm initially heading to Australia to find work and afterward contemplating whether to travel through South East Asia for awhile before going to either Europe or Canada. Not sure yet.  Who knows what the future holds.

Dont worry about a thing on your return. I am sure the Government will allow you to go on the dole paid for by the working people. Life is sweet eh bro.

I wouldn't give self-righteous pricks like you the satisfaction Bobby. What gives you the gall to ponce around with your nose up in the air?


Many thanks. I've thought about this a bit. The argument some put is that the babyboomers will eventually have to sell to those behind them and when they do prices will adjust.

But Andrew Coleman from Motu reckons the boomers will simply hold on to their houses and not sell.

Check this out http://www.interest.co.nz/news/49432/why-young-will-increasingly-have-rent-and-pay-high-taxes

That's consistent with what we've seen in the last four years. Many are reluctant to move and sell for less than their GVs, unless they are forced to.

Most boomers have good incomes and have plenty of equity.

That's why I also like a land tax. It captures some of that capital gain and for those that cannot pay it turns into a great little estate tax as death triggers the payment of deferred land tax (with interest)



Good idea....


One thing is clear Bernard since 2001 NZ's ridiculous ponzi property market has been nothing but a curse to the future of NZ  and that of younger generations to come. They have essentially been "dis-infranchised" from owning a realistically priced home/land in their native country simply due to government promotion via tax  investment incentives into a totally non productive sector. This is the case the world over and the very reason we have had a global economic crisis! Unregulated Property investment has been a worldwide economic disaster.

The only way out is to tax the f*** out of it, make it as unattractive as possible to 'hoard' property, whether commercial or residential. We must incentivize REAL businesses and exports, not "sit and do nothing shams" aided by no CGT etc .

A simple parasitic comparison can be made between property hoarders and  'currency speculators'. Do currency speculators pay tax on their profits and at what rate? How much tax has the likes of John Key actually paid on his 100+ million in estimated wealth? How many jobs did John Key and others at Merrill Lynch create via this method of parasitic wealth generation?

Very well said.

The key to encouraging productive investment, economic growth, and reduced income inequality is shifting the tax burden away from "earned" income (wages and salaries) torwards "unearned" income (capital gains etc). Or in other words, economic rent should be taxed, and productive income should be untouched.

And financialization is a problem here in New Zealand, but luckily its not even remotely as bad as in the US/UK. See http://pragcap.com/why-arent-there-more-apples for a good discussion.


I part own two small commercial properties and while I don't export or produce goods in an economic sense sense I produce a service and take exception to being called Parasitic.

I make a profit on my entities and  the company pays tax.

If I didn't risk my capital (yes I put hard cash into purchases) who else would supply these buildings for the business to operate from. Some one has to risk their capital and the return for risking my capital is profit (like any other business).

For a whole range of reasons (some within and some outside their control) the tenents choose to rent rather than purchase.

I totally agree that we need to produce more goods and services (especially to export them) so we can pay our way in the world but remember just become I am not at the end of the production cycle that doesn't make me parasitic.

Not according the Labour....!

Income tax, ETS tax,  Land tax ( rates ) Alcohol and tobacco excise tax,  Gambling tax, Fuel tax,  GST tax, Motor vehicle tax, RUC Tax  etc  etc and you silly buggers want more taxes for stupid politicians to waste. I cant believe the way lots of New Zealanders think. I think it is straight out pure envy of any body who has worked and saved hard. Gimee, gimee your money. As Chopper from Australia would say, Harden the F*** Up New Zealand.

Correct Bobby , those who ask for more taxes ask for bigger govt at the same time. How stupid are those people, Too stupid to vote , and most liky the same folk who think we have democracy , & that the various markets are somehow free.

Marty first the primary aim of any tax must be 100% defined & all pros , cons & unintended scenarios drilled out. Usually what tax change will create is those with the ability to avoid them, will do so , and people get hit who were supposed to benefit , this is the history of tax such as we refer. With legislation of any type you need to follow the money & understand where the incentive lies & who benefits & who proposed the change. So much to consider , yet so little understanding in the public arena

If we everyone else is paying those taxes why should one sector of society be free of it who rely on one particular form of earnings be free? 

Your entry was hard to follow but I think I'm with you. Let me say I agree with your ethos in general , less tax , less govt , actually no govt but it's hard to see that. What we need to aim for under current systems is optimum efficiency in size & spending. Govt needs to balance & simplify the tax system not add to their empire by pandering to some professional services , legal , accounting & IRD. If they add tax somewhere they should be removing one elsewhere , or you usually get increased complexity , expansion & voila more govt. So far as balancing out the inequity you refer , maybe the IRD could use the existing rules more effectively which they have at their disposal already before we add more. Unintended consequence will occur, and will then likely lead to more law change more tax change an possible govt growth. Is this not what we have seen in Nz for some time now. Almost 50% of our economy is dead space , let's not encourage them to further sink us just yet. I will add , I agree it has merit but I am against more tax until govt culls themselves first.


I really should learn to proofread before I post, lol. Essentially I was trying so say why should one particular form of earnings be free of tax which everything else is subject to? It just favours one class of earnings over everything else and skews peoples investment decisions. If we must pay taxes at least the system should be just. 

Just because government takes up 50% of GDP as tax doesn't mean its dead space. We all would prefer to keep as much of our income as we can and question the effiacy of government spending but that is not to say its "dead space". Governments too are consumers are goods of services, just like individuals, NGOs, and companies are. I don't have any control over how Telecom spends the money I give it and less information on its spending. Sure you can argue I have a choice to shift to another ISP, but can anyone say how different another company would be? They're the industry leaders thanks to the stupidity of Jim Bolger and co. He even admits in now. 

"The sale of Telecom in 1990 was a mistake and New Zealand Governments have generally proved themselves inept at privatisation, says former Prime Minister and departing NZ Post chairman Jim Bolger."


Agree with what you say , although with regard to the 50% much of this is ppotentially productive capital used up on pet projects , state pensions & ridiculous salaries & perks for life , that's before you factor in quangos , consultants & other parasites. Yes cash recycles , but I guess we are on the same page with letting people decide how to spend their own money , some of it may even create jobs , which govt does not do in a productive fashion , as a rule.
Can't wait to see how bad for the for the country the sale of assets is going to be. Still the consultants will get paid and some will get cashed up in the process , so that's good. The rest of Nz will just get to pay higher prices & most likely lead to even less competition down the line in some industry.
Awesome , can't wait.

yeh, I can only shake my head in dismay especially in light of reading this article written in 1887. Well worth the read to see how little New Zealand has changed.


Nothing has changed, no shock there. Makes me wonder if those who might be putting themselves on the line to try help Nz in any way , should just get on with their own life.

Why don't we have a 0.5% tax on the market value of shares we own, and while we're at it a 0.5% tax on the money in the bank?

We already pay tax on land.  It is called rates, and it pays for local government spending.  Why would we want another?

(Note to Wolly, its a called sarcasm, I don't really think its a good idea..)

Yeah sorry LAJ...it was bleeding early in the day and I got carried away...

Shame that Bernard cannot see the forest for his socialist trees.

He obviously does not move in the circles of the elderly for whom the thieving bloody council rates amount to more than 10% of the pension.

There are measures any govt and every RB could take to hammer the crap out of property speculation....but they won't do it......and Bernard has yet to ask them why not.

Any mortgage above 65% of valuation( with the role of valuers under the SFO and with serious prison time and fines for fraud) would invite an automatic duty that would rise to equal 100% of the mortgage sum at 100% of valuation. Pay up or no registration of mortgage. That would end the madness overnight. A bloody sight more effective than a cgt or land tax. It is the credit creation by the banks that is at the heart of the cancer.

Fantastic idea! In fact, ideally we would move a good portion (if not all) of the tax burden onto land, and away from income. Land taxes could also be made progressive if that is what people want.

Perhaps the best part of them is that they are very efficient. Quite simply, the owner would be liable for a tax of x% of the property's value - and if the tax isn't paid, the property gets foreclosed on by the government. There would be less loopholes, less avoidance, less evasion, less tax attorneys and accountants, no-one goes to prison, and less time consuming paperwork. In fact, I know of one former hedge fund manager that believes the loss of efficieny that income taxes cause could be over 10% of GDP.

Land taxes replacing income taxes would be the best economic decision of the last couple of decades.

I tend to agree with you - but then I suspect there are alot of "Wolly's" out there who are in the situation he alludes to above (as per this statement);

"He obviously does not move in the circles of the elderly for whom the thieving bloody council rates amount to more than 10% of the pension." 

You see we have a very large (and soon to get larger) proportion of our land/home owning population who own their home freehold but have little else by way of savings and largely live off the amount they get in their superannuation payment.  Often referred to as the "asset rich, cash poor".

This section of the population would likely be unable to pay the land tax.  Bernard has suggested above that the tax be deferred until such time as the asset is sold.  Which is one way around it.... but 

There would be an expectation that immediately a land tax was introduced - the offset in terms of lower PAYE would kick in (as it should do) - so there could be a signficant period of tax cashflow shortfall while we wait for the OAPs with the assets to either cark it or sell.  And of course, many of them will have children who haven't yet been able to afford their own home (or who have lost their home through prior foreclosure) - and the tax liability they might inherit could be significant as well, depending on just how much our RE sector depreciates over the next decade.

I think the discussion is good - and I'm definitely in favour of taxing capital, consumption and resource use/pollution; as opposed to labour and profit.  But a radical overhaul of taxation also needs a radical overhaul of welfare at the same time, I believe.  Otherwise we're just shifting the burden of tax without making any real progress on ensuring our ongoing sovereignty. 

Um , "govt forecloses on the property if tax not paid" NO.
Otherwise it's making sense

Well, not immediately (warnings first etc). But eventually, if the owner doesn't pay taxes / can't afford to, the property must be sold, in a similar way to a bank foreclosure.

If not, how else do you enforce taxes without resorting to jailtime? If taxes on land were introduced, and there were no foreclosure consequences for not paying, then who would pay? I certainly wouldn't pay my taxes if there were no serious consequences for not doing so....

Can't afford to pay & refuse to pay taxes are not the same thing, can't you see what you are saying. Empowering govt at any level with removing your home is complete madness. How about they take your kids if you refuse unecessary vaccinations or don't buy then the latest gadget. If you ask the govt to take more power ,they will take much more than that. Your thought process is dangerous !

You didn't answer the question - you just wrote a paragraph of nonsense. The question is: How is the government going to enforce the payment of property taxes?

Now, one option is to send people to jail. The other, better option, is to foreclose on the house. There are no other practical ways of enforcing property taxes. You don't seem to understand that people don't pay taxes because they want to - they pay them because there are serous consequences of not doing so. Remove the consequence and people won't pay them.

And refusing to pay taxes and not being able to afford to do so amount to the same thing. In someone can't afford to pay them, then they need to a) explain why they can't and they may get some welfare assistance or b) downgrade to a cheaper house where the taxes due are lower.

Just answer the question above in bold please.

Rpacs I do not believe in govt having the power to take private homes because of taxation , & hence wont answer your demand. Your ideas read as fascist, and so do your words.
You say, set tax change , if you can't pay, jailtime , foreclose or seek welfare assistance or sell to down grade. What era / communist state are you from?

You can't answer the question because you know your wrong. The system we have now is that if you don't pay your taxes you eventually go to jail! What I am suggesting is a better alternative.

You quite clearly don't understand the realities of taxation. People won't pay taxes unless there are serious consequences of not doing so. In fact, the currency (NZD) is only as good as the government's ability to tax it. It has no "real" value. The governement must strongly enforce taxation, and the best way to do this is with a property tax and foreclosing on those that don't pay.

So you can harp on about fascism all you like. Your wrong, and you know it. Just like a bank loan is only as good as the bank's ability to collect it, fiat currency is only as good as the government's ability to tax it. 

It the government can't enforce taxation, then the currency and economy is done. Period. So please, answer the question....

You're making a fool of yourself now. I will not be engaging you further on this matter. Please refrain from assuming you know how much someone knows about the systems that run Nz!


Your the one who made a fool of yourself!


FYI from an emailer:

Hi Bernard

I read your article today in the Herald today where you state: 

"If we don't move urgently to cut debt, push down our currency and encourage productive investment, we are sending a big signal to our young to visit an airline website to buy a one-way ticket."

This is quite true.  I'm typing this as I visit my children in Sydney.  However I'm not certain that your prescription of more and different taxes is the answer.  More tax on commercial land will simply evolve into higher rents for the tenants, greater cost to business, and less of the economic growth that we all need.

What I think is is missing from your analysis is that the problem of debt is primarily an existential question, rather than an economic one.

Our parents and grandparents taught that deferred gratification was required in all areas of life in order to find economic security, stability in marriage, and personal happiness.  They were people with a hope for the future, and were prepared to sacrifice today in order to obtain a better tomorrow for themselves, their children and their grandchildren.

Fast forward to today.

We live in a world that is characterized by instant gratification, play now pay later, where debt is the means of delivering what you cannot afford (and probably don't need) today.

Overwhelming debt is a symptom of a people without hope for the future. They are locked into some 'eternal now' where the only thing that matters is the immediate.

We can tinker with tax all we like - without an attitudinal change, we will continue our love affair with debt, which will result in continued economic and social decline.  That said, I do think that the party is almost over.  This will result in considerable hardship, and who knows, perhaps a realignment with the values of our grandparents?

Kind regards


The problem with ending the love affair with debt, is that everyone has to do it at the same time. Otherwise those juristictions that don't ( say New Zealand clamps down on debt issuance, and Australia doesn't) will have an economic advantage over those that do. You only have to look at those who are adding to their debt, today, to take advantage of whatever downturn is about, to see that things are not about to alter in that department. Until the debt markets seize up; entities are extinguished by the result and the real personal fear of it' happening to you' occurrs, nothing will change.

NA, sadly true. The question is where does it end , because it's going to one way or another.

That's right Brendan. What BH & the few posters on this blog generally don't or can't understand is that the debt system has been , by design along with targeted advertising , social engineering via policy supported by corrupt corporate , economic , financial & political agendas to fracture society for their own gains.
People simply can't join the dots or refuse to see the real picture. Greed , self interest , self involvement , envy & money rule the majority it seems. Positivity, love & goodness has been attacked through media on all sides. Many people now possibly believe there is no future , so live accordingly. Who benefits most from a society who runs this way.
Until people can free their minds then it will decline further & playing with tax systems is only to support the charade. Watch the conspiracy labels come out now.


Really good point about debt and the future.
My view is the major way to reduce the debt (and it is overwhelmingly mortgage debt) is to reduce the incentives for mortgage debt.
But you're right about the underlying problem of short termism and consumerism.


Bernard...I know you're out there....why are you not pushing Bollard and English for a real answer on the idea of mortgage duty controls....easy to establish and targetted. So far all we get from Bollard is waffle about "oh they are so complicated".....which is crap.

You want to inhibit the property speculation...cut the mortgage cancer from the economy.

Wolly your argument makes sense... am just not sure what you mean by cutting mortgage cancer from the economy? It's Sunday and I'm a little slow today...



Is it....oh yeah...sod it I forgot to go to church ..again.  The cancer is the uncontrolled banking binge..the madness that brought the 105% loans and inflated valuations and scams and rorts and banking bonus idiocy all wrapped up and loved by a stupid greedy public and ignored by a dumb arse Labour govt and a  next to useless RBNZ....and the band played on....

That's the cancer. A tumor that can be cut out with a simple easy to implement and easier to enforce duty on mortgage registration above 65% of valuations..it doesn't stop banks making dumb loans...it does stop them being able to use the legal system to suck the blood from the victims...no mortgage no repayment...

Will we ever see such a control...not a chance...the banks have the economy by the short hairs and the govt is dancing to an aussie/fed tune and that's the message Key will get when he kowtows to Barry in the whitehouse. "You do as we say"

That is exactly right Wolly. The banks KNOW they can lend whatever they want, it's Risk Off. A tax here and there is just theatre, it merely shifts a bit of the money flow. The government should stop subsidising speculation, that's why I voted yes, but what really should happen is that the banks must be put back into their cage.

All land should be owned by the government.  All income should be paid to the government.  Government  knows best how to develop land so everyone can have identical houses (so as to be fair).  Then we could be given a healthy food parcel each week, our houses would be heated for us, public transport would be free and everyone would get a fair go.

Trouble is Jo would swap his brussel sprouts for Mary’s steak.  Jack would move in with his sister and let Letitia use  his flat in  exchange for her carrots so he had twice as many (Jack is a glutton).  Mary would save all her baked beans so she had a little stock for retirement.  John would grow his own veges and swap them for fish and chips.  Andy would swap all his whole meal bread and vegetables for ciggies and be starving by Friday.

House prices are rising again, particularly in Auckland. -Holy cow, I almost choked on my lunch reading this from you BH. What happened to the 30 and 15% drops in value??

This land tax you want- would you want on every bit of land ie on family home, and on land owned by charities and companies etc taxed?

If you really want people to avoid investing in realestate then ring fence any losses from rentals to be used against the tax you need to pay. That would change attitudes overnight

Just wondering would you happily pay a CGT if you sold interest.co.nz in the future?

What a fine thread. I don't know where baby boomers end and Gen X's begin, and where Gen X's end and Gen Y's begin, but I'm 38 and in the last two years I've seen about a dozen friends/colleagues of a similiar age pack up their families and move overseas. Why? No faith in Bill English and cronies.

Shame to hear but not surprising. People under 45 , expecially down to about age 30 if not younger need to make a choice. Actively engage in an attempt to impact change for the good of Nz, leave , or stay and bend over further until most of us break.
Interested to find out who wants to be at the forefront to the attempts to change the mess created over the decades. Then we can see who really cares out their country. Because it will not fix itself by looking at it from the sidelines.

Almost all my old friends now live overseas. It is becoming lonely being in your 30's in NZ. Financially it does make sense to live overseas in your 20's-50's. I am almost at the stage were I am seriously looking at it.

I think it is either , or. A CGT, or a LVT, not both. Basically we already have a LVT , in the form of rates, which we also have to pay GST on, which is a tax on a tax. Think about all those people who have lifestyle farms, a LVT will make them unafforable to keep.

Land tax and CGT are to me very different animals. One is designed to stop speculation and asset bubbles the other is a revenue gatherer. For many farmers a land tax would be the last straw, they swapped their income for the next door property and while they get to go the pub and bragg about how many cows they have, make  no mistake the banks has its mitts on the income.

 Personally I sold out at the top in 2007,as the trust had owned the farm for 40 years its hard to see how a CGT would be effective in my situation.  The problem is in NZ its very hard to see a way to set up a business and make a go of it, thats our big problem and its where we need to be focused. The property bubble was the only way many young could see themselves getting ahead.




The Shape of Things To Come



Well - I'm going to disagree with BH.

Sure, real estate got expensive, but you have to ask why.

Fact - they ain't making any more of it.

Fact - cities radiate outward, limited by topogtaphy, and otherwise clash with other land uses.

Fact - those other land uses (primarily food production for said cities) will be reduced in turn.

So - inevitably the price will rise, it's genuine scarcity/conflicting use we are having, boyo. Exponential logistics clashing concurrently.

The price of housing, and the more egalitarian ownership of same, can be addressed by a CGT, a 'secondary property tax', or by straight out legislation. (Thou shalt not own more than....).

Taxing land, in a resource/depleting world, is running to the stern deck to avoid drowning - not a permanent solution to the problem.

"Making it productive' puts forces onto the wrong things - erosion, soil depletion, aquifer depletion, water quality degradation - whereas, more important that the making of money, is the state/contition of said land.

Bh's suggestion, to me, would result in quality degradation of the land (naturally there will be FedFarmers/trout type obfuscation along the way).  I have land I planted trees on, for two altruistic reasons - to sequester carbon and to mitigate erosion. I have no wish to profit from that donation, and don't do so. Taxing me would force me off it (or make me dig into this finite planet more than I do, to pay the tax) to - presumably - be replaced by someone more 'productive'.

No doubt the excuse will be 'the market did it'. Well, sorry, but 'the market' created your bubble, and is the real problem. Exponential growth doesn't continue indefinitely within a finite sphere of operations, and hits the wall bigger/faster that it ever was (no known precedent on impact). The market includes 'productivity gains', so they're actually part of the problem.

You'll get there BH. Think of it as balancing the budget, but in physical terms. Having done that, you can always legislate - there's little difference between taxing and decreeing 'thou shalt not'.


"Fact - they ain't making any more of it."


Thats what real estate agents say, as a marketing slogan. However the facts are that NZ has heaps of spare land that could be used for houses, and could be released for residentia use. NZ certainly doesn't have a lack of land.

The problem is that land is drip fed onto the market by developers and councils, thus pushing up prices, and creating the impression of a lack of land.

It is not thelack of land that is the problem, but the lack of infrastructure to support that land, and it is expensive to put in that infrastructure.



So in fact what we have is self interest operating at the levels of influence who can control the drip flow of land. Would be very interesting to understand what these individuals are protecting for themselves , nah surely not. Infrastructure is expensive but as it's been raised before could be paid for without any external borrowings. Where is the strategy Nz governments , pulic servants , local counsellors etc. What do you do to provide a future for this country?

Rob - agree/disagree.

Sorry, but farming is just as important (both global/food-wise, and high-quality husbandry for the future-wise) as housing. Traditionally Councils had to protect high-quality land, although lobby pressure created the nonsense of the Mosgiel sprawl, for instance.

Infrastructure is indeed a problem - everything will get more expensive (relatively, it may just be that incomes reduce) from here on.

The future may well see the reduction of mass farming, and an escalation in allottments, village-hubs rather than city-radiuses, commons gardens. There's a problem in that 90% of the housing stock we enter the powerdown era with, will be the existing.

We'd be better addressing the energy efficiency of the existing stock, than extending oil-based infrastructure (I've no objection to develpoments genuinely demonstraing no such reliance.....)

That's all a societal debate, though, plans, aspirations and suchlike.

Taxing it is the wrong vehicle, the biggest irony of which is that the 'productive' or 'export-led' displacement (supposed) is to a market of?


Who can only buy houses, and fill them with stuff.


To stimulate real production, research, development, etc.

What about an “Office & Administration Chair Tax” – OACT - for unproductive, but greedy lawyers/ bankers, rip off-icers, real estate agents, government/ councils, etc. -  based on incomes – the more one earns the more one pays.



For the same reasons that our trader lead govt will not Go for this. Here we talk about about raising a few hundred million at best when the real big fish are getting missed

This would actually benefit the country too , hugely!

Oh and Peter Dunne happily collects his additional party leaders salary for his part of one , do you imagine worries about the rest of the country too much , same applies to Anderton

Talk of pi's being elite is again to be falling for the same old mind games. When will people work it out you reckon Kunst?

Two of my brothers are farmers. Both left school at 16, went to Australia, worked in  mining for 10 years, lived very frugally and saved a lot of money which they used to buy and develop their orchards. Neither has any debt. Their land is currently worth more than $150,000 per ha. Both export fruit.

However, after deduction of farm operating expenses, their incomes before tax and personal drawings are about $30,000. A 0.5% land tax would mean that both would be liable for an additional annual expense of more than $7500 which would make their operations less financially viable. Interesting to note that between 2004 and 2007, their land values tripled but their net farm incomes have only increased by about 10%.


Maybe if we just stopped these banks from being able to create all of this debt out of thin air, there wouldn't be all this malinvestment to begin with.

Better start crossing fingers that the effort underway in USA to reinstate Glass Steagall succeeds then. It was put in place around 1933/4 & was removed under pressure from the big banks in 1999. And what as happened since the the worlds financial systems! It's critical so feel free to read up on it

Marty get off wiki pedia & look into how this allowed banks to almost create an environment where risk was ignored & transferred across &'indeed away from the IB GL. All while exponentially raising risk hidden inside exotic instruments. Why would the major banks lobby so hard for it's removal & why they don't want it back. Maybe go work in an IB for a few years to see just how this can work.

Fat chance deanbo...the banks rule the roost and jerk John any way they want...and Bollard blathers away about controls and this and that and oh how awfully hard it is...blah.

The only way deanbo is for the dumb public to stop borrowing money...to start saving for what they want to buy...to see the banks for what they have become, parasites.

You have witnessed the fear that hit the banking bosses as the borrowing demand began to drop...the advertising BS dominating the silly box trying to get fools to borrow..the spin about it being a great time to buy property.................that's a measure of the power of a public with brains.

Sadly I doubt the NZ public will ever understand how they are being screwed.

Hey Wolly, that about sums it up. If there were ways to generate pressure & accountability onto the govt , would you be into it?The sheeps are needed to make change , untimely a critical mass must play a part. Your comments are always pretty accurate IMO

I  had an interesting talk with a farming friend last week, he was upset with my responce to his suggestion, that another 4 years of good prices and he should have his debt managable, I  laughed,called it quaint and rather old fashioned thinking, one that the banks had no intention of allowing.

That is exactly why they have to be stopped Andrew. If Nz did default & s still part of the IMF , we will really be in BIG trouble.

There is no capital gains tax on stocks or other investments so I don't see why property is singled out as being an unbalanced loophole in the tax system.

Isn't property the speculation of choice simply because you can easily get a bank to lend against it allowing you to easily leverage your speculation?

Also I often see the statement that property is an unproductive investiment. It is surely no less productive than any other business that provides a service to NZers. It's just that in the case of property it is housing that is being provided.

Yes there was a property bubble and yes we should encourage investment into productive export and technology sectors to improve our long term prospects but to say that property is a parasitic investiment that currently enjoys a taxation advantage just seems to me to be false.

Questions is, how do we get people to put all this effort (investing in, obsessing and bitching about property) into developing 21st century products, services and industries that provide efficient solutions to the problems and markets of the 21st century. and how do we get  bankers investing in those efforts rather than property speculation.

Land Tax? maybe this would help. The CGT that Labour are suggesting might just make things worse as the only surviving asset class that can gain value without attracting CGT would be , you gessed it, property.

But aren't they also looking at putting CGT on stocks and other investments too?

Property was also an investment of choice, becuase people could use the property losses against their personal income, to offset the tax they paid. 

As far as I know the labor plan is to put it on everything except the "family home" and a few other special exceptions. Thus making it immediately adventagous (from a tax perspective) to invest for capital gain in a large family home (possilby instead of renting a basic place and investing elswhere)

And yes people could offset losses and if you are running your property investments as a business that was not unreasonable. Why should someone like me who runs businesses be able to include property in my business and offset the loss that way while the salary worker who is running proprty rentals on the side cannot?

It still comes back to leverage. you can borrow to leverage property up the wazu but you can't borrow a dime for stocks or other investments unless you are in the finance biz. It's the leverage that made property such an attractive proposition during the boom years - with over 8% growth p/a leveraged x10, investing in anything else was mental. offsetting losses and dodging tax was just a layer of icing on a big fat money cake.

double post.

Congratulations. bh just outlined reason #146 why someone would stay in NZ.

Peter Dunne says a CGT would be "inequitable"!


I wish he could explain how taxing an income class that is currently untaxed, benefits largely the wealthy, is accepted in the US and virtually all other developed countries, and is recommended by OECD, IMF etc can be seen as inequitable! 

I really think he should stick to the "inefficient" argument.  At least one can make a vague argument that way, if one shuts one eye and squints with the other........

Cheers to all. 


It would be interesting to find out what interests he has? Alex? Property is best viewed as a long term investment:


"The Minister of Revenue, Peter Dunne, has voiced his long held opposition to a Capital Gains Tax in response to calls for one to be introduced, in part, due to New Zealand’s “severely unaffordable” house prices. However, the Minister failed to give any logical reasons for his rejection of the Capital Gains Tax, instead relying on the “hoary old chestnut” gambit, as if the world has not changed."


Yes, Les.  The reasons given for not introducing a fair taxation are very much on the "collect-more-taxes-and-the-govt-will-waste-it" line of reasoning (or lack of reasoning, to be more accurate, since it is obvious that spreading the tax burden around more fairly doesn't necessarily mean an increasing in the total tax take).

So one presumes the real reason is to protect the smallish but very vociferous and influential group who benefits enormously from a tax-free income class. 

However, one wonders how much the politicians themselves are part of that group.  Key and English are an obvious part of that privileged elite.  But how about the Dunnes of this world?  Does the parliamentary disclosure regime shed light into this?  Or are they all hiding behind trusts? 

Cheers to all.

Philly I think government waste of taxpayers money should be top to everyone's concern list. Do you have kids or nieces , nephews etc who will be paying back the waste forever , yes correct forever.
The only argument from your camp seems to be the "it's fair" which is simplistic nonsense. Dunne will have an interest , as do many BB's , but you need to question your own bias on the subject. Personally when the govt starts to cut it's size & spending , along with stats manipulation , and begins to be honest about its own dealings, while presenting a medium & long term strategy for Nz fiancial , environmental & social well being, then , perhaps new taxes could be discussed. The aim must be , smaller & simpler , not bigger & more simply because "it's fair"

What are your top 5 policies?

I might vote for you.

What are your top 5 policies, list them please?

Thanks, Les,

Hi Les , at this stage I do not have political ambitions & what we are starting does not come with policies because it is not political in nature. Please excuse the vagueness of this reply , im keen to initiate it as well as possible before talking any details in public. I hope to have phase one live later this year , & it will take a few years to get traction I would expect.

This "government waste" is pretty much a heap of ignorant claptrap.

Yes, there is govt waste (as there is in the private sector and farms).  Yes, Labour increased it, and the Nats are rightly targeting some of that waste.

But in reality, NZ has a very efficient and low-cost public system of education, health etc., staffed by dedicated and professional staff.

Let us say you find yourself having a heart attack tomorrow, Lloyd, and find yourself in a public hospital.  I want to see you say to the doctor and nurse "I really think we need to cut the obvious waste that you represent".  And next time you take you kid into the primary school, could you say the same to the child's teacher.

Could you let me know their response, Lloyd, just for a laugh!

Thanks for the responses, and cheers to all.

Philly , yet again someone assumes to know what I was referring to. To be clear , I was not talking about health or education or vital public services. I refer to the size of our central govt & the suppliers & professional services who milk dry funds away from front end services that you mention & don't start me on the Treaty gravy train being encouraged unchecked. Beauracratic growth is what I mean & I do not see it shrinking under National , in fact govt has grown at central & local. Auckland super city is A huge blow out & will cost more permanently , thanks National , and the PR bill alone for National has balooned far above Labour. I am neither red or blue Philly, I want better , fairer Nz for all , but don't agree that a CGT is going go do what they think it will.
To address your additional points below. I do not expect anything for free Philly I take responsibility for my own requirements. The more debt Nz has the more tax has to be raised on the country accross the board to pay the interest & other bills , we need to cut the size of government Philly , not keep introducing more tax. I am not against the tax in theory if it can be proved to do what it is sold as doing, but history tells us it won't. You mention the elite so you have a chip about it, and I understand your feelings, but let's do things right & assess the real issues in Nz not get hung up on red herrings.

Lloyd:  My understanding is that any service-based system has a significant amount of waste.  About 30-35% of its overall cost is wasted.  This goes for business (eg Telecom or Vodaphone, or a chemist shop or hairdresser) just as much as govt services.   No matter how much you analyse and make cuts, you cannot avoid a certain amount of waste. 

I feel that some of the National Govt cuts were necessary - Labour had financed a lot of junkets & time-wasting etc.  But I think you will find that if it goes much further, essential services will start to suffer.  On that basis, if we want to maintain basic services, we do need to find a more balanced taxation base. 

At the end of the day, that is in the best interests of all NZers, even  ultra-right wingers and a land-owning elite. 

I accept that you may not be part of the latter, Lloyd, if you say so.  Tho I do notice  that the most vociferous opponents of CGT etc are those with significant asset bases, particularly property - so will maintain an open mind about your membership or otherwise of the latter group if you don't mind!

All the best to all. 

Philly never assume anything , least of all when it comes to people. Your caution of the elite is understandable but a hinderance to an open mind. I am not sure about a third or more of waste but I intend to find out at all levels of local to central as I suspect it is much higher, and regardless a third is far too much waste you would be talking about billions every year if not 20+ , that is huge money . Philly you can't compare public to private it's simply wrong to do so, you must realize that.
I will spell it out , I am against expansion of beauratcratic local , regional & central government , & adding more taxes in silo will only make it grow larger
Tell me what will you say if Nz defaults & we have to privatize health , roads etc but still have the new CGT not to mention goodness knows what else in new tax on top. Attack the cause Philly not the symptoms , that's what the elite & their co partners want you to do. Oh & be cautious what you read from the IMF , UN, WTO , WHO etc as they are the very top tier of the elite you seem to refer.

Lloyd:  Ha ha! Hilarious!

Earlier you replied to Les that "at this stage I do not have political ambitions & what we are starting does not come with policies because it is not political in nature."

After which I graciously accepted on the face of your claim that you are not a political idealogue.

Then you come up with the statement above!!

Brilliant, just brilliant!!

I hope you are reading this, Les!  It answers (in broad terms) some of the five policies you were asking about. Including foreign policy with the UN etc!  Don't know if I would vote for Lloyd tho!

Cheers on a gusty Monday.


Philly it is not very smart to take too much of what somebody is really about from short entries on a blog like this. Are you an example of the level of thought process in Nz ?
Please Philly tell me all about myself , I'm waiting to hear as you claim to know what I am all about.
Why automatically assume that because I have political opinions or an interest in politics , does that mean I am starting a political party or want to become a politician?
So come on Philly tell me all about me , I'm waiting

Plus, Lloyd, I daresay even you will get old and need extra govt-assisted support.  NZ's ageing population will need the resources to cope.  This is unavoidable, unless we have mass genocide of the old. 

Putting more and more pressure on wage and salary-payers, while ignoring appreciating assets for tax reasons, will eventually become unsupportable as well as indefensible.

As far as I know, every other OECD country has recognised the need for some form (or several forms) of CGT, land tax etc to balance the tax burden.  NZ is going to have to accept this point eventually. 

Unless of course the elite can demonise the concept indefinitely.  Which would show what a banana republic we truly are.

Kind regards again.

See my 12.50pm. It's about representation - approx 60% of parliamentarians have the same shape of interest as the only 200,000, 5% of not-so "everyday New Zealanders".

Alex has done some useful articles on this conflict of interest in the past.

Just a matter of time before he arises from his weekend slumber.

('Stupid Trust', yeah right.)

Cheers, Les.


Hon Peter DUNNE (2006)

Interests (such as shares and bonds) in companies and business entities: Tower Corporation Limited insurance, Australian Wealth Management funds management

Real property: Family home (jointly owned), Wellington

Superannuation schemes: Parliamentary Superannuation AXA (Government Superannuation Fund)

Gifts: National Bank of New Zealand Limited mortgage



Does this include assets that he may have sloshing around in family trusts etc?  Remember he is part of the group that enthusiastically removed gifting duty.


People with a sense of personal responsibility who earn their living do not need and do not want any additional taxes, be it land tax, capital gains tax, whatever tax. They know that the more tax is paid the more money is wasted.

People who do not have a responsible attitude and are too lazy to earn a living will vote for any additional tax, as that would allow them to continue to parasitize.

So, the opinion will depend on which of the two groups one belongs to.

As to the country, what it needs is more of the first group and less of the second group. Government spending needs to be reduced down to absolutely necessary public services, and taxes reduced accordingly. Only then personal responsibility and productivity will be rewarded and therefore stimulated, living standards will rise and housing will become “affordable”.



Funny but you are wrong, those who pay no tax are the true parasites on society....then we have the ones who claim WFF and free healthcare because they loaded up say their farm up with so much debt they have no "income"....yet when they retire, cash out tax free...

This is my defination of a parasite on a society....


"those who pay no tax are the true parasites on society"

Steven the vast majority of people who don't pay tax in this country are poor people.

Are they the parasites?



Jeez markS....that'll keep steven quiet all morning!

Yeah I heard an explosion in the distance and saw a puff of smoke on the horizon.

Hope Stevens ok... :)

I've run out of grenades already...time to go!

I can answer the silly question:

Yes, all are a drain on resources, rich and poor alike. Some consume more per-head, but the bottom end does it through having more heads.

Socialism is as stupid as capitalism - both assume unlimited bounty exponentially opening up ahead for evermore - just a diffent distribution of same.

Both are wrong.


It wasn't a silly question PDK I was just asking for clarification on Stevens point, sure it was a bit provocative but hey it is was early and I hadn't had a coffee.

I do like how you just completely discount peoples freedom when you say Socialism is just as stupid as capitalism. Very dark for a Monday morning.







...and anther cost that is not often mentioned is the increasing age of parenthood. We had our first at 35, about the same time that most of my friends started too. We'll also have families a lot smaller than those of our parents and our grandparents.

So those productive members of society are delaying families and having less children because of the financial shackles put on them by their parent's generation. This has serious social and political implications...

I think its a bit more complex, for instance have you noticed that the less well educated are having less children? no not really....and where does the social cost get met? not to mention the long term cost to the planet and everyone's standard of living by continous population expansion.

Our parents and grandparents also got to live in an era of ever increasing energy use, we are on the cusp of a change to less, our children and grandchildren will have to get by on less energy every year, and our grandchildren and great-grandchildren less and less stable climate as well as less energy...

"This has serious social and political implications"...indeed, add in they are numerous, have huge voting power...and they are going to get needy and will wield that power to get what they want.....



I am surprised stamp duty hasn't been discussed as an option for raising money by the gov.

Does stamp duty "correct" behavior? or a market distortion? I am not aware that it was recommended?  A CGT stops long term tax dodging, a stamp duty is purely a tax....


 "A CGT stops long term tax dodging"....no it doesn't....it makes people think it does!

And the unintended consequences are complete unkowns...but you are happy to stick you arm into the nest of funnel web politicians...gosh how brave of you steven.

The tax take from a cgt would not reach estimates and would in the end prove to be a giant mistake. For starters, if Labour won in November on the promise of a cgt...say bye bye to billions as people and corporates move capital out of NZ...see the fx rate plunge and the cost of all imports rocket higher....leading to something you fail utterly to see...stagnation and inflation.

Go back to the start steven and ask yourself why the govt needs the loot....with any luck you might see ways and means to reduce the 'need'. Like for starters, ending the billion dollar a year rent subsidy rort.

 "it is obviously something most Kiwis want to see happen"...bullshit oilyn.....and you know it....the herald online poll had 60% of voters against any form of CGT....so stop spouting the crap.

My comment was correct and you avoided the poll because it showed most people do not want your CGT madness shoved down their throat.

That's Elephant's bollocks oilyn...the herald server only allows a connecting computer to reg a vote once...in case you didn't know it, every computer has a distict trace line code. How you like them apples!

the herald server only allows a connecting computer to reg a vote once

Not so.

every computer has a distict trace line code

Oh dear Wolly, you're really showing your age and ignorance.

Time for you to dust off the abacus.

Gaming NZ Herald polls has long been trivial.




Herald Online poll:  these have zero statistical validity.  Obviously those with a vested interest in no CGT are going to do the voting. 

"say bye bye to billions as people and corporates move capital out of NZ".  Yeah, as they take their $$ and business to Australia, US, UK etc

......... All of which already have a CGT & similar systems!  Very likely!


"Obviously those with a vested interest in no CGT are going to do the voting. ".....well that's a easy escape route when the poll result does not go your way philly.

Shall we say for 9 years of a useless Helen Clark regime those with a vested interest in benefit dependency did the voting?

I have never taken the slightest interest in any online poll, whether the result favours my thinking or not.  Validity is zero either way.  I have never quoted on on Interest.co.nz, and never will.  So am totally consistent on this

Cheers to all

 Philly, they may well do have a CGT. But those countries also offer far greater investment opportunities and rewards than NZ does, so the incentive to move is still there if a CGT is introduced into NZ. Our opportunities and rates or return are already small; a CGT will make them even smaller.

I take it you don't have much money or are not an investor?

David B:  totally wrong on all counts.

I do have reasonably significant investments, all in bonds, equities, gold etc.  

"These countries offer far greater investment opportunities".  You have your reasoning the wrong way around.  All investment classes are treated reasonably equally in those countries, so investment is spread around without being relatively favoured by the tax system. 

The lack of a CGT for property in NZ skews investment decisions towards property (refer to various articles by Brian Gaynor).  So the lack of a CGT prevents the development of signifiant alternative investment pathways.  Hence Charlies & others have to sell overseas - NZers are only interested in farms or rental properties. 

I'm not saying the lack of CGT, land tax etc is the sole cause of our lack of investment opportunities.  But it is clearly one of the reasons.

Thanks for comments, regards.

"House prices are rising again, particularly in Auckland"

An easier alternative to cool the Auckland property market would be to bring in a property tax for Auckland with a relatively high tax-free threshold. 

A property tax on existing homes with a tax rate of 0.5 percent . New homes could be exempted from this tax for the first 3 years. This should encourage building of new homes and increase the residential supply side of things. 

For non-permanent residents who don't work and run companies in Auckland, their second homes should be be taxed at higher than 0.5 percent. All new homes bought by non-permanent residents should be taxed.

A CGT for New Zealand combined with a property tax limited to Auckland would generate the much needed "shock and awe" and will definitely help curb speculative demand, forcing speculators to consider costs of owning multiple flats and drive house prices lower in the long run.



Now see here WFF, if the Auckland property scene is healthy and bubbly...might it not be so because it is healthy and bubbly!....which invites the thought that a downturn could be serious and the cause could be minor...think fashion WFF.....is it possible Auckland is a 'winklepicker' property market?

You obviously aren't an Aucklander are you Foo Foo

Are you Russell Norman?  'cos he's making similar kind of comments!  That's the most stupidest comment ever made... 

The lack of common sense & history here is shocking & shows in a microcosm why Nz is is trouble & will most probably get worse.
A CGT will be a cock up , from lies to sell it , to the expanded govt departments & public servants to administer it. Que Philly to tell my background story.
Our govt gets it wrong most the time historically , how hard is that to get through the head!

Here we are again - how do we dong property investment on the head and spread the tax load amongst the 'have lots', the 'have nots' and the 'have lesses'. Fair enough, there's no denying there is an inequity that needs addressing for future generations.

We personally have made good while we could and all I'm thinking about is how to best pass on what we have achieved to our four children who are only now entering adulthood.They will pave their way, but we hope to pass on our three investment properties (and the $500,000 mortgage) to help get a foot in.

A land tax is fairer for all but would probably sting us now. A lot of property owners like us would rather a CGT because we're not planning to sell. It's something we can defer for our children to deal with when the time comes. Hell, that wouldn't be too much for them to handle!

Here we are again - how do we dong property investment on the head and spread the tax load amongst the 'have lots', the 'have nots' and the 'have lesses'. Fair enough, there's no denying there is an inequity that needs addressing for future generations.

We personally have made good while we could and all I'm thinking about is how to best pass on what we have achieved to our four children who are only now entering adulthood.They will pave their way, but we hope to pass on our three investment properties (and the $500,000 mortgage) to help get a foot in.

A land tax is fairer for all but would probably sting us now. A lot of property owners like us would rather a CGT because we're not planning to sell. It's something we can defer for our children to deal with when the time comes. Hell, that wouldn't be too much for them to handle!

I moved to Sydney in 1997 and even then with the friends we made.. we all started with an apartment and slowly over a long period you save and earn more and work the way up to a house... We are back in Auckland now for our kids.. no better place to raise a family.. and honestly I think NZs move overseas because we want to see the world.. its not easier in other citys but people complain less.. 

I don't think auckland house prices are over the top you just have to be realistic about expectations...  Visual media, advertising has made us believe we should be millionaires at 30.. 

House prices are still going up because the market can still buy them... therfore its not to expensive yet...

If the CGT was about making housing affordable there are much better ways.. see wollys comments.. make a mortgage harder to get.. but the truth is a CGT is about taking from one group and giving to the other group that are going to vote for you... its bs

Utter bollocks  - applying a CGT to property, as well as a land tax would have as many similar silly outcomes on other asset classes as reducing company and trust tax rates below personal rates and allowing LAQC's  in the context of an environment with no CGT has had on property. Then you would be wanting a financial transactions tax no doubt...



Stop Press - EMA come out in support of CGT!!!!!!

"The IMF, the OECD, Treasury, the Reserve Bank, and, inconveniently for the Government, a growing number of business people including the Exporters and Manufacturers Association, and the Productive Economy Council (PEC), have all made the case for a capital gains tax."


Capital gains tax a no brainer for NZ


What the hell is wrong with Selwyn?

What the hell is right with John Key?

Bernard - suggest you check with Business New Zealand to see if they support EMA advocating for CGT.


Cheers, Les.


hmm interesting that....so JK has laughed at labour yet here are businesses saying oh this looks like a good idea.....


Its like that saying off that movie >>>'It's Just Pressure and Time MY Friend Just Pressure And Time" Ha d ha ha ha :]

The idea that a CGT is the solution to many problems in NZ is typical of those who do not understand economies. Government intervention will create an unintended consequence. There are many reasons why investment decisions are made. For me, the lure of a tax free capital gain was not enough to keep me invested in property. I have one house to live in the rest I have sold, as it is my opinion that property prices will fall, due to global government intervention distaurting the market signals by borrowing to stimulate and QE, following the crises of 2008.
 It is these type of interventions that have created bubbles like the tech bubble, real estate bubble and not allowed the corrections that are so badly needed. The next bubble to pop will likely be the bond market. But who knows what they will think of to fix that