New Zealand is known as one of the world’s leading gimp nations when it comes to protecting the future that land in prime locations avails. They have no Land Tax. They have pathetically low council rates. Worse, these are set to penalise home construction such that the family home pays upwards of 30% more than the land banking speculator.
The kiwis haven’t even got a capital gains tax (not that we endorse that but at least the public could some share of the gains).
The result – some of the most unaffordable property in the world.
Essentially they have given the big thumbs up to hammock surfing speculators and corporate REIT raiders to buy up their most valuable sites and hoard them until they can hock them for a fortune.
It really is flabbergasting.
Especially when they have been earmarked as one of the only habitable land masses in about 50 years.
But it seems that some are awakening to this giant ‘kick me’ sign the kiwi’s have given themselves with their lax tax policy. A ‘once-in-a-generation’ type Tax Review (similar to the Henry Review) has just given their findings.
Read this post highlighting some key presentations from kiwi tax experts. The slide shows are of interest, particularly the fallacies in Shaw’s (check the list of exemptions).
But listen to Geoff Nightingale from Price Waterhouse Coopers. Some effective lines on the justice and equity front that give one some hope that the kiwi’s are looking at deep seated reform. It seems the Tax Working Group has seen beyond the lure of a Capital Gains Tax that penalises turnover in favour of the more effective Land Tax.
However, the NZ Treasurer Bill English put a stop to the hopes of future generations with:
“Changes that are widely understood and are supported make the most difference to economic performance. Those sorts of changes tend to stick.
“Those without support simply don’t last and can’t make that much difference to our economic performance.”
At least yet another Tax Review has come out in our favour. Some good articles are out in the open and being discussed.
One day the masses will awaken to the invisible chains that high mortgages place on them due to poor tax policy.