Many of our customers have been asking questions about capital gains tax (CGT) and its impact on them. Today the Government has announced that in New Zealand capital gains tax (CGT) will not be introduced.
The Jacinda Ardern announced today that no Capital Gains Tax would be introduced into New Zealand’s taxation system under her Prime Ministership saying that no consensus was able to be reached within the Government.
While she still believed it would make a difference, she acknowledged that Labour had now campaigned on it for three elections, and it seemed there was a lack of mandate among New Zealanders for the policy.
The perceived potential impact this would have had on hardworking New Zealanders, irrespective of their political persuasion, was clearly a significant political problem for Labour. It always has been, even when the Chair of the Tax Working Group was the Minister of Finance in a previous Labour Government.
Ideology is fine, but Ardern has recognised the perils of blindly pursuing personal beliefs saying, “While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.”
Ardern said there were other steps that could be taken to improve the fairness of the tax system, pointing to steps the Government had taken to “tighten rules around land speculation”.
It is reasonable that many New Zealanders, be they business owners, lifestyle block owners or mum and dad property investors probably breathed a sigh of relief today.
We trust that New Zealanders, our customers, and well-wishers who were worried about the impact on them will get a sigh of relief.