Government Mulls Property Taxes

September 11, 2009 New Zealand FinanceNew Zealand Taxation  No comments

Statements made by Alan Bollard indicate a possible creation of a property speculation tax.

In a statement on the 10th of September, Alan Bollard, Reserve Bank Governor stated that he would support the introduction of a property speculation tax in New Zealand. He provided no firm mechanics on any such possible system, but a brief overview of the idea was described. Levies could be imposed on owner unoccupied housing, possibly immediately or if sold within a preset time period. The idea behind such a tax would be to rein in property speculation and balance the benefits of investing in housing with equal investments in the business sector. It was made adamant that any such system would not be imposed on owner occupied housing.

Opposition to the idea has already been voiced by the Business Roundtable and the Property Investors Federation. Both claim that the imposition of any such tax would not serve to yield any great profits or be an effective control for the housing market. Doubt was raised as to whether such a tax, if imposed at reasonable levels, would serve as a deterrent to property market speculation, or increase proportional investment in businesses.