The Government isn’t going to try to take the heat out of the Auckland housing market by introducing a capital gains tax.
Prime Minister John Key has ruled that out, and says if the Reserve Bank thinks it needs new tools to deal with the city’s soaring prices it’s free to talk to the finance minister about that.
The Reserve Bank’s Deputy Governor, Grant Spence, yesterday said Auckland house price rises couldn’t be sustained and a “disruptive correction” could harm the economy.
He said speculators were looking for tax-free capital gains, and the Reserve Bank couldn’t fix the problem on its own.
That’s been taken as a clear signal the government should introduce a capital gains tax, but Mr Key isn’t interested.
“It’s a hideously complex tax,” he said.
“Labour campaigned on it and couldn’t explain it, and when family homes are excluded that means three-quarters of all housing is excluded – it’s just not very effective.”
Speculators should be hunted down by the IRD and taxed to the full extent of the law. ¬†Those who have been trying to sneak it past the goalie aren’t looking at a bright future. ¬† But CGT won’t work if applied to everyone. ¬† The real problems are supply of land, zoning, consents and excessive immigration pressures. ¬† Read more »