Analysts at ANZ note that the New Zealand’s much-awaited Tax Working Group final report was released last week, recommending that the taxation of capital income be extended, alongside reduced income tax for those on lower incomes.
Key Quotes
“Taxing capital gains would have fairness benefits, potentially lead to increased portfolio diversification, and make property investment less attractive. But the report acknowledges it could also hamper investment, push up rents, and negatively impact savings and productivity.”
“Plus, it would not solve our housing affordability problem. While a capital gains tax has now passed the first hurdle, there is no guarantee it will be embraced by politicians, especially in its current form.”
“And even if the current Government decides to run with it, we will not get clarity on the issue until after the 2020 election. The decision of whether to implement or not may ultimately be up to voters.”
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