Labour's returning to the red

[Cynos]

Proposing a capital gains tax of 15% on "investment properties" - it's a ballsy move, they'll need to package it well.

[aR Que]

What exactly does it mean? 15% of the initial purchase price has to be paid to the govt?

[fixed_truth]

Yeah it will be interesting to see the details and what revenue might realistically be expected etc. But it's definitely a bold (ie fuck you baby boomers) move towards what a lot of experts have indicated would be a good way to move investment out of housing and into the more productive side of the economy.

[TD]

Originally Posted by aR Que

What exactly does it mean? 15% of the initial purchase price has to be paid to the govt?

The tax is when you sell and it is 15% of the difference between the purchase price and sale price.

[Lightspeed]

It seems like the right time to broach the idea, i.e. when they have little hope of getting elected anyways. Hopefully it'll allow National to pick up the idea as well, knowing it can't be used as a political football as much.

[Cynos]

They're posturing it as an alternative to SOE sales.

[A Corpse]

CGT has been poo-poohed by Key as too difficult to administer.

Yeah, sure. I bet that's the reason.

Not that your support base all own multiple properties at all. Nooooooo.

[aR Que]

Originally Posted by TD

The tax is when you sell and it is 15% of the difference between the purchase price and sale price.

*scratches chin* I see, that makes more sense, I take it you don't get a 15% rebate of the difference if you sell at a loss?

Typed out a dozen more questions and realised, the details are what we are waiting for, heh.

[xor]

Hope this happens.

[GRiM ReeFer]

How can we create a climate were individuals only investment choice is to hand their money over to investment firms to play with?

Create volatility in the market, shake out all the small investors leaving only the large corporations under the guise of kicking the rich.

[GRiM ReeFer]

Side note:
Labour, get a clue, once the cat is out of the bag it is essential that you hold a press conference immediately and release all details of your plan, to hold back shows incompetence and invites speculation.

[xor]

How can we create a climate were individuals only investment choice is to hand their money over to investment firms to play with?

This is true, although I don't know why anyone would invest in NZ financial markets.

[fixed_truth]

Originally Posted by Cynos

They're posturing it as an alternative to SOE sales.

It will be interesting to see if they posture this right. 'Yes we have shit-load of debt and CHCH needs fixed - National want to sell assets, we hear most of you don't want that - here's an alternative.'

[Lightspeed]

Regardless of how awesome the policy is, I can't say I currently trust Labour the effectively execute it if they got into power.

[ZoSo]

There's gotta be a foot shot in here somewhere.

http://www.nzherald.co.nz/business/n...ectid=10736671

Key said a 15 per cent capital gains tax on individual's investment property would raise $700 million a year, after 15 years.

That wouldn't raise enough for Labour's promises.

Citing media speculation that a capital gains tax would raise $4.5 billion annually, he said that the Tax Working Group came up with that figure but it was at 30 per cent and not just on investment properties but shares, business properties, farms, baches.

Looking at the way Australia had implemented it, it had taken 15 years to fully achieve.

"So for the next three years if they don't sell assets as they are arguing they wont, if they do have a $5000 tax-free threshhold as they arguing they will and they do take gst off fruit and vegetables, they are $12 billion in the hole for the first three years of that theoretical government with no cash coming in at all.

http://www.nbr.co.nz/article/labours...s-key-rh-96618

Love to hear GT's take on the numbers.

[wugambino]

Hope they are not planning some gay top tax rate of like 45c that kicks in @ 100k :\

[CCS]

Rich people deserve to BLEED!

[^BITES^]

Originally Posted by wugambino

Hope they are not planning some gay top tax rate of like 45c that kicks in @ 100k :\

Ditto fuck that shit.

[Lightspeed]

Originally Posted by wugambino

Hope they are not planning some gay top tax rate of like 45c that kicks in @ 100k :\

Who? Labour? I'm not sure why anyone would care about what they're planning. Considering they're not going to be able in a position to carry out their plans any time soon.

[Ab]

Off the top of my head:

Why only residential property? Why not a CGT on any other sort of investment?

Especially why a CGT on only residential property when the residential property market is either plateaued or tanking? If nobody is making money out of property investment then the government won't make any money in tax - or won't make enough to make it worthwhile, or won't make enough to meet the election promises that justify the law change.

E.g. I see some unnamed muppet at TVNZ is saying this will be worth "4.5 billion". Over what time frame? How long will it take the govt to bring in 4.5 billion in CGT if the property market stays depressed? or tanks harder?

Why is the CGT as leaked going to be non-retrospective? So someone who bought a bach at the Mount in 1950 for $100 and sells it tomorrow for $10 million will pay no tax on that ten mill, but the person who buys it tomorrow and sells it next year for $1 more pays tax on the one dollar? Huh?

[Saladin]

4.5b was the Treasury figure that was based on all capital investment, not just residential property I think.

[chubby]

count me as curious to hear GT on this too.
he's said many times that it constitutes a 'good' tax, and that the only reason we dont have one already is labours lack of support for the idea.

[Cynos]

Someone just suggested an obvious workaround - now that gift duty has been abolished, form an LLC, gift the house to it, sell the LLC. Unless shares have a CGT?

[Cynos]

Originally Posted by Ab

Why only residential property? Why not a CGT on any other sort of investment?

Because it'd fuck a lot of farmers.

Originally Posted by Ab

Why is the CGT as leaked going to be non-retrospective? So someone who bought a bach at the Mount in 1950 for $100 and sells it tomorrow for $10 million will pay no tax on that ten mill, but the person who buys it tomorrow and sells it next year for $1 more pays tax on the one dollar? Huh?

So as to not upset the baby boomers I posit.

[Golden Teapot]

I'd vote for them if:
1. It's applied retrospectively say this a five year glide-in path, and;
2. It's set at 30% or some similar number.

Anything less and their just playing electioneering.

[Saladin]

Heh
http://dimpost.wordpress.com/2011/07...an-i-expected/

Just to restate this allegation: a party a million miles behind in the polls has hinted at a limited Capital Gains Tax, so frightened investors are going to buy their property in Australia, which has a comprehensive Capital Gains Tax.

[MrTTTT]

fuck the babyboomers. go CGT!!! hopefully stop them buying up all properties and locking out first home buyers ?

[-Statik]

So interest in a bank is taxed at 30%+ and property only at 15%? Won't change a thing. Yawn.

[chubby]

funny and smart enough.
http://publicaddress.net/cracker/another-capital-idea/

[Draco T Bastard]

Originally Posted by Ab

Off the top of my head:

Why only residential property? Why not a CGT on any other sort of investment?

It's not, it's comprehensive but doesn't include family homes. Which is really stupid actually as it adds a complexity that's not needed. A family home just isn't bought and sold that often to worry about the small amount of added tax that would eventuate.

Why is the CGT as leaked going to be non-retrospective? So someone who bought a bach at the Mount in 1950 for $100 and sells it tomorrow for $10 million will pay no tax on that ten mill, but the person who buys it tomorrow and sells it next year for $1 more pays tax on the one dollar? Huh?

I'm figuring that:
a) Retrospective legislation is normally morally wrong
b) The actual purchase prices from previous years/decades just isn't available.

[crocos]

Originally Posted by Draco T Bastard

It's not, it's comprehensive but doesn't include family homes. Which is really stupid actually as it adds a complexity that's not needed. A family home just isn't bought and sold that often to worry about the small amount of added tax that would eventuate.

The point of excluding the family home is that it reduces the barrier to switching / improving the family home.

[Draco T Bastard]

Originally Posted by Golden Teapot

2. It's set at 30% or some similar number.

It's supposedly set at 15% to account for inflation. Personally, I'd prefer it to be properly inflation indexed.

Originally Posted by crocos

The point of excluding the family home is that it reduces the barrier to switching / improving the family home.

What barrier? So, you pay little extra tax. It's not a barrier.

[chubby]

http://gordoncampbell.scoop.co.nz/20...ns-tax-debate/

and the sydney herald guy...
http://www.radionz.co.nz/national/pr...-gains-tax.asx

I thought NZ was something of a worldwide orphan … members of both sides of [Australian] politics use NZ as a sort of case study in strangeness because there’s a yawning gap in New Zealand’s tax system, which isn’t there in the UK’s tax system, isn’t there in the US tax system, isn’t there in the Australian tax system.

And yet the New Zealanders showed the way for us in the mid 80′s with their goods and services tax. And yet there’s always been this strange thing missing that New Zealand’s been unable to do, and I must say I thought it would never happen, it would be one of the continuing quaint things about our cousins across the ditch.

… the idea is that if you earn a buck, you’ve earned a buck, it doesn’t matter how you’ve earned it. So if you earn a buck from working hard, labour, you’re taxed on that at your marginal tax rate. If you earn a buck from selling shares at a profit, or buying anything else really and selling it at a profit, speculation I suppose you could call it, you’re taxed on that at your marginal tax rate.

So if your marginal tax rate is low, 15%, that’s what you’re taxed. If your marginal tax rate is 30%, that’s what you’re taxed. …

There is no [separate] capital gains tax in Australia, and there is no [separate] capital gains tax in a lot of other countries. Capital gains are regarded as income.

Raising isn’t the point. This is misunderstood.

A capital gains tax could be very effective if it raised nothing. What the capital gains tax does ideally is stop people, for tax reasons, changing income into capital gain. So even if the amount that you forecast you would raise from the capital gains tax is low, that isn’t an argument against the capital gains tax. Because if it is low, it’s because what it is doing is encouraging people to make fewer “capital gains” (with quotation marks around them) and make greater income.

It’s more a case of just not having (sort of) a big gap in the tax system people can drive trucks through.