Capital Gains Tax Unlikely in New Zealand

September 15, 2009 Taxation in New Zealand  No comments

Comments made by the New Zealand Prime Minister has effectively put an end to discussion surrounding the introduction of a Capital Gains Tax in New Zealand.

In a statement made on the 14th of September, John Key, New Zealand Prime Minister, cast serious doubt on the idea of introducing a capital gains tax in New Zealand. The Prime Minister had previously been hesitant to rule out a capital gains tax, so as not to limit the process of the Tax Working Group. Yet now that the working group is open in their discussion of the matter, the head of government has stated that he would require “an awful lot of convincing” on the matter and would want “meteoric evidence” supporting it.

The Capital Gains Tax discussion has centered around the sale of property and housing. No specific mention has been made concerning other asset types, although none have been ruled out. It is expected that the Tax Working Group would consider a levy of 30%, if they do recommend a Capital Gains Tax for New Zealand.

Expanding on his opposition to the Capital Gains Tax, John Key said “It’s been my longstanding view capital gains taxes are inefficient and don’t work. Unless there was some meteoric evidence out the [tax review group] I would not vote for one.”

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