It's nearing election time, and so we move into the silly season. The government of the day announced the election date ages ago, it's to be in November (isn't it?) and after the RWC.There is always a lot go "the government" aren't doing enough of this or that stories, there are a few of 'ra ra' stories where the government appears to have got something right.
There are circumstances where the government of the day have to either be the nail or the hammer as the situation falls.
The big battleground then appears to be Capital Gains Tax. Well that's what the opposition party would have you believe anyway. The big plan is to recover the economy by taxing capital gains made on the sale of primarily property. It's a bit like death/estate duties, but works every time you sell a house.
Not your family house, but all the other houses you have. Because we've all got more than one house.
The value will be decided on day 1. Thats the line in the sand. Then if you sell it you will pay a tax on the difference between the value on day one and the day you sell it. On your other houses, not your family house that is, and we're all about selling our other houses.
Couple of problems with this that seem obvious to me. I don't have other houses. So I'm in favor of this tax.
The other problem is that it relies on a growth market in housing to return anywhere near any dollars in tax, and we're not really poised for another big boom in house prices. Oh not never in Christchurch they're exempt from this tax, besides which it's not on the family home.
So realising your investment will cost you a small matter of a tax, it's not going to depress the house prices, and will inflate pricing if people do what I would do, and that's top up your ask price by the amount of tax you'll pay to be a zero sum game. Just a thought.
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