Landlords not fazed by CGT

Property investors are welcoming news that a capital gains tax is looking increasingly unlikely, but say it probably wouldn’t have affected them much anyway.

The Tax Working Group, which is chaired by Sir Michael Cullen and is developing a report for the Government on the potential future direction of tax policies, is understood to have stopped short of recommending a broad-based capital gains tax.

It is believed to have pushed back any firm recommendation until it publishes its final report in February.

New Zealand Property Investors Federation executive director Andrew King said he was ‘‘surprised but delighted’’.

‘‘We’ve always objected to it, we don’t think it’s the right thing to do,’’ King said.

‘‘They’ve argued it’s a way of getting house prices down . . . and potentially that’s true, but they’re forgetting that most first-home buyers are tenants first and we need more rental properties at the moment, not fewer.’’

Another landlord, Peter Lewis, said it would have very little impact on him. ‘‘I have always bought rental property for income and treated any gain in value as a side benefit.’’

Lewis and King said capital gains taxes had not restricted house price inflation in other parts of the world.

Property investor Nick Gentle said he had been unfazed by the prospect of a capital gains tax.

‘‘Being a landlord is about more than capital gains – investors should be focusing also on cashflow and looking to provide quality accommodation. I think introducing a capital gains tax would be horrendously complex and expensive.’’

The Australian experience showed introducing such a tax might just move money to accountants and tax lawyers, he said.