After considering the Tax Working Group’s recommendations and negotiations with coalition partners, the Government has ruled out extending the capital gains tax. Ultimately politics and a lack of consensus between Labour and NZ First terminated the action of extending capital gains taxation.
Jacinda Ardern has confirmed that she will not be campaigning to introduce a
capital gains tax in future elections. Many businesses and rental property
owners have expressed that they are pleased with this outcome.
Instead of a capital gains tax, the Government is looking into other ways to improve fairness in the tax system, including tightening the land speculation rules and land banking. The Government has also announced that it will not introduce any environmental taxes.
Whilst ruling out the recommendation of the capital gains tax put forward by the Tax Working Group, the Government has endorsed a number of other recommendations. These include reintroducing building depreciation for seismic strengthening, a review of loss trading and the loss continuity rules, and further measures to improve tax collection and encourage compliance. Overall, these recommendations should have a positive impact for business.
Please give us a call if you have any questions on these issues.