Hey Gareth, if this tax passed into law, how long would it be before an impact is seen? Will there be an immediate depreciation of house values & raise in incomes...or is it more of a long term strategy? If it's the latter what sort of time frame are we lookin' at. If it takes a while, 10 years or more, how will it help those in need now? I'd also like to ask what guarantee would the homeowners of New Zealand have that your proposed income tax cuts intended to blank out the tax wouldn't be rescinded by a future government, ie they keep the house tax in place but remove the income tax cut. Cheers.
Official response from Gareth Morgan
There’s never any guarantees with tax. A government could raise them tomorrow and not tell you they’re going to. The closing of the loophole will not be fully achieved for some time. This is on purpose because we don’t want to collapse house prices, we want to have them tread water so incomes can catch up. The way to do that is to make the deemed taxable income on capital only small to begin with and wind it up over time until fairness is restored. How long would that take? Depends on the reaction of house prices.
Do you like this suggestion?