Published in Insights, The New Zealand Initiative’s newsletter, 24 April 2015
Talk about a capital gains tax (“CGT”) as a solution for the Auckland housing market has heated up again over the past couple of weeks.
The Reserve Bank’s Deputy Governor, Grant Spencer, suggested that the tax treatment of housing needed to be changed. Treasury Secretary Gabs Makhlouf, Housing Minister Nick Smith and ex-central bank economist Michael Reddell all refuted the idea, whereas the NZ Herald’s Fran O’Sullivan and economist Gareth Morgan came out in support. So far, so predictable.
Frankly, I find the debate over a potential CGT tedious, and not just because we are flogging a horse so dead it should have been composted years ago.
The first reason CGT is a non-starter is political. In order to make it work properly, it would need to include owner-occupied housing. On this point, most supporters and opponents even agree. The…
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Utopia, you are standing in it! 
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