New Zealand property news: Capital gains tax

18 September 2009

New Zealand Prime Minister John Key may press ahead with the introduction of a capital gains tax on property in New Zealand after the opposition Labour party offered their support should the government decide to introduce the tax.

The government is currently reviewing tax system and will issue a final report next week.

With signs that New Zealand property prices are starting to appreciate once more, following a difficult period of the New Zealand real estate market owed to the credit crunch, some experts claim the introduction of a capital gains tax would help prevent another New Zealand property price boom.

Approximately 1.3m New Zealanders currently own their own homes in New Zealand. Yet with demand for property in New Zealand increasing, particularly among speculators, prices are generally expected to appreciate over the coming months. However, the introduction of a capital gains tax would deter property investors with a short-term buying and selling strategy.

A capital gains tax of around 20% has been proposed.

New Zealand is one of the last remaining developed countries to not have a capital gains tax.
 

See Also:   Marc Da-Silva, New Zealand, Tax