Bollard Wants House Tax Overhaul
November 13, 2009 New Zealand Taxation
Alan Bollard, Governor of the Reserve Bank of New Zealand (RBNZ), has stated that he wants to see new taxation measures ensure that New Zealand adequately handles property taxation, to prevent a housing caused economic lull.
Alan Bollard made comment on November 11th regarding New Zealand’s reliance on debt-fueled property investments. Though he did not go into specifics, he made it clear that it is the belief of the Reserve Bank that tax measures should be instated that would reduce the relative tax advantage that exists with investment in the housing sector.
Summing up his argument, Alan Bollard claimed that “for a number of years we have made a point of the need to ensure property investment is not particularly advantaged in terms of tax. When it is, it draws funds into the housing sector, creating strong demand for mortgages and external funding, and putting pressure on the dollar and the external sector”.
He said that he would like to see the average New Zealand household increase their savings, thereby decreasing the amount of debt that must be sourced from overseas. Which according to the November 11th released Reserve Bank Financial Stability Report stands at above 40%