Capital Gains Tax or CGT on property may become a reality in New Zealand very soon. If Labour and the Greens are elected in September CGT will be more than likely be implemented during the next term. If so would it in any way change your property investment strategy?
Across the ditch the Australians are used to CGT as are 30 other members of the OECD. It is strongly advocated by The Greens and Labour as a means of strangling property values and by doing so allowing more buyers into the market. However looking at the property market in Australia.
In 2011 CGT wasn’t really the Election issue we thought it might be however this year may be different and are we ready it? A good article on NZICA suggests the ‘devil is in detail’. What is taxed, how much, and are there an exemptions?
CGT is already applied to property trading. The qualification is based on the intention. If the intention is to buy and sell property for a profit CGT applies. This is essentially property speculation, it is popular and it’s taxed.
Property mentoring company PropertyTutors says it’s had to increase it’s mentoring programs to meet growing demand. The CGT is clearly not stopping the deals being done. How far-reaching the CGT could be is the talking point right now . Property investors on PropertyTalk suggest property trading could become the norm amongst traditional buy and hold investors if and when CGT is widely implemented here in New Zealand – I wonder if Labour and The Greens have considered that possibility.