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Wellington, April 19, 2019
(Image from REINZ Website)
Real Estate Institute of New Zealand (REINZ) has welcomed Labour’s announcement that it will not proceed with a Capital Gains Tax (CGT).
The Institute was reacting to the statement of Prime Minister Jacinda Arden that Labour will not be adopting CGT, following feedback from a majority of New Zealanders that they do not believe in a Capital Gains Tax.
Grave concerns
REINZ Chief Executive Bindi Norwell said, “As an industry, we had grave concerns that a CGT could push up house prices even further, especially when we look at examples of other OECD countries that introduced CGT such as South Africa and Australia and have seen housing affordability decline in those countries.
“Therefore, we welcome the announcement from the Prime Minister that Labour will not be looking to proceed with any of the Tax Working Group’s recommendations and instead focus on the wider issues affecting New Zealanders,” she said.
“We also welcome the fact that Government will look at other areas of the tax system that could be fairer and look forward to engaging and consulting with the Government over these areas they wish to address in the coming months, Ms Norwell said.
Certainty to the industry
Ms Norwell said that those who own lifestyle blocks will no doubt be particularly pleased with the announcement, as they were one of the few communities facing a CGT on the sale of their own home on land over 4500 square metres.
“We hope that the announcement will bring more certainty for the real estate industry as feedback from buyers and sellers has been unanimous in their uncertainty ahead of today’s announcement,” Ms Norwell said.
