Although Prime Minister John Key has ruled out capital gains tax on sale of the family home and administrative issues surround a new tax based on an assumed rate of return on net equity at say 6% (ie disallows the claiming of interest and depreciation losses, etc), the following relevant recommendations are now in front of the Government to decide upon in the coming weeks:
In other political reactions, predictably the Green Party strongly supports a capital gains tax and land tax on investment properties.
The TWG report can be viewed at: http://www.victoria.ac.nz/sacl/cagtr/twg/Report.aspx
[Note that the TWG report did not address the issue of losses generated in the sector. This maybe pursued as a medium-term matter elsewhere].
Any policy changes (the Government may be more inclined to increase GST, implement “depreciation-related” and the land tax recommendations) are to be announced in the Budget with likely effect from 1 April or 1 June 2011.
The Treasury published (24 December 2009) a set of working papers including one describing a model of domestic housing that can be used to analyse the impact of various housing policy proposals. The model includes rental and owner-occupied housing.
The paper is highly technical however it concludes that:
The Treasury paper can be viewed at: http://www.treasury.govt.nz/publications/research-policy/wp/2009/09-05/