Property investors warn of downside
Taxing capital gains is not the Kiwi way, one property developer says, and that shouldn’t have to change just to follow the example of other countries.
David Whitburn said it should not be assumed that it was a problem that New Zealand lacked such a policy.
‘‘We don’t have nuclear ships here. It’s OK that we are different from other countries.’’
If introduced, such a tax would put some people off investing in residential property, he said.
It would be expected to reduce house values, which would affect investors’ equity in their properties. But it would also affect homeowners, he said.
‘‘They are in the same market. It will concern all owners, not just property investors.’’
Another investor, Nick Gentle, said it seemed the working group had proposed big changes so that the Government could step back from them and look as though it was compromising.
He was not worried about the effect on the property market.
‘‘I’m a fulltime property investor and the idea of a capital gains tax has never really fazed me. I invest for the long term – 10, 20 or 30 years,’’ Gentle said.
‘‘If you’re running a business, then you need to invest for cashflow and that has always been taxed.’’
He said there were deeper fundamentals driving the property market than a search for capital gains.
Exempting the family home and gains through inheritance complicated the tax, he said.
But a bigger concern was whether it would deter people from investing in other businesses that created jobs and income.