In recent times the Tax Working Group reviewing New Zealand's tax system has received increased attention.
This is no surprise as it gets closer to making its recommendations, which now appear likely to come out early in the New Year. The Tax Working Group is a collection of academic, government and industry tax professionals charged with reviewing New Zealand's tax system.
Part of their brief is to look at the equity and fairness of the system and look for ways to broaden the tax base, ideally so as to fund drops in the personal, trust and corporate tax rates.
Many readers will be aware of some of the options they are considering in respect of the taxation of property, including capital gains tax, a land tax and a tax focused on property investments (which imposes a deemed income based on a risk free rate of return). My thoughts on this process are as follows:
Stamp Duty
I think that stamp duty should be considered. It is progressive in nature (taxes volume) so satisfies the fairness and equity requirement. It is also a system that is relatively easy to legislate for, hard to avoid, and easy to enforce.
If targeting the property sector and reducing the risks of a speculative bubble are goals, then stamp duty on land transactions would also seem to achieve these goals. It dampens speculation (taking the margin off traders, leaving only the long-term investors to prevail).
In the meantime, we wait with bated breath as to what the next move is. Naturally GRA will keep you abreast of developments.
If we can help with advice on investments, structures or business planning, please contact us.
When we started with GRA we werent certain of the benefits they could provide us. However they quickly unravelled our complex situations with multiple companies and structured our businesses so that we received maximum personal protection and minimised our tax liabilities. They have always been accurate on time thorough and available to answer our questions. Now six years after first moving to the team at GRA they have skilfully guided us to a future that looks amazing. It is with confidence we make decisions knowing our interests are protected by an outstanding group of modern forward thinking professionals. Their guidance has been invaluable and we can thoroughly recommend GRA - Dougall Love and Janice Knowles - June 2017
Gilligan Rowe and Associates is a chartered accounting firm specialising in property, asset planning, legal structures, taxation and compliance.
We help new, small and medium property investors become long-term successful investors through our education programmes and property portfolio planning advice. With our deep knowledge and experience, we have assisted hundreds of clients build wealth through property investment.
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