Prime Minister Arden, today announced that the government won’t be implementing the capital gains tax (for now).
While Sir Michael Cullen (chair of the TWG) sounded disappointed, he was not surprised.
The weeks following his recommendation to introduce a widespread capital gains tax was met with criticism by many and naturally the government wanted the public to know they were listening to feedback from the public.
Naturally implementing another tax would not be popular so it was wise for the Prime Minister to back down on the capital gains tax for the timebeing.
According to Simon Bridges (the National Party leader), “National had been the loudest voice opposing a CGT, and without it, NZ First would have supported the CGT”.
While it’s true that there won’t be a widespread capital gains tax on all asset classes, it doesn’t mean you don’t pay tax if you make a profit on your sale of your property.
There is still the 5 year bright line test for residential investment properties bought and sold within five year.
For traders, developers, and persons in the business of erecting buildings, properties you sell in the course of the trading, developing, building activities business are all subject to tax.