POLITICAL PRESSURE FROM AUCKLAND MPs FORCED THE GOVERNMENT HOUSING TAX MOVE

FrontPage: PM John Key explains new housing tax proposals to media
 

The Government’s capital gains tax proposal on investor housing announced today apparently came after pressure from some Auckland MPs.

Even so, Caucus as a whole played no role in the decision.

Backbench MPs were not briefed till a conference call last night.

The fact that the announcement --- event though it is a taxation measure --- has come outside the formal Budget suggests that it is a very recent decision.

“POLITIK” has established it was discussed at last Monday’s Cabinet but it is unclear whether that was the only time Cabinet debated it.

Government advisors recognise the tax could cost them some support --- particularly from the right of the party.

At least one right wing backbench MP is thought to be opposed.

And the blogger, Whaleoil, who has in the past been close to MPs like Judith Collins and Maurice Williamson is critical of the tax.

Revenue Minister Todd McLay arriving for the PM's housing tax announcement.

Revenue Minister Todd McLay arriving for the PM's housing tax announcement.

The moves announced today are:

  • A new “Brightline Test” which will require all owners of residential property other than the house they live in to pay tax at their marginal income tax rate on any capital gain achieved by the property within two years of purchase.
  • The only exemptions will be inherited property or property obtained through a marital settlement.
  • Overseas investors will also be required to supply an IRD number on purchasing a property other than to live in. if they don’t already have on, before they can get an IRD number they will be required to have a New Zealand bank account.
  • Furthermore all non-resident buyers and sellers must provide their tax identification number from their home country, along with current identification requirements such as a passport.
  • It is planned to legislate in time for the requirements to apply from October 1, this year.

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