Equity, rather than the question of curing an over-investment in property, is the focus of a new paper on a capital gains tax for New Zealand.
The paper, by two tax academics Leonard Burman and David White, suggests a capital gains tax not only on investment property but also - as in the United States - capital gains on owner-occupied housing above a certain level (in the United States, gains above US$500,000).
But in a forum on the question in Wellington yesterday, Burman's main emphasis was on the issue of widening the tax base, while Pricewaterhouse Coopers tax partner John Shewan - who is not a fan of a capital gains tax - said there is an issue to be dealt with around investment properties.
Shewan said a lot of the talk advocating a capital gains tax was confused and emotive.
Given advocates usually suggest exempting the family home, and that this is two-thirds of a property market valued at $600 billion, he said he did not see how it could possibly cure any imbalances.
Shewan did, though, say the remaining third of the property market does need looking at by the policymakers.
"There is about $200 billion invested in rental housing. That produces, shall we say, a very disappointing return to the government.
"That is, a negative tax of about $150 million."
He suggested use of a land tax, or expansion of exiting rules on property investment, should be looked at.
As for a broader capital gains tax, "I'm happy to be persuaded I'm wrong but I'm not persuaded yet," he said.