NATIONAL REVEAL THEIR TAX POLICY AHEAD OF THE 2023 ELECTION. National have revealed their tax plan should they be elected. The plan is expected to cost $14.6 billion over four years and have proposed to fund this through four tax changes and other reductions in public spending.

Firstly, National plans to soften the foreign buyer ban of residential properties, opening the market to foreign buyers for New Zealand homes over $2 million. National plans to tax these foreign buyers at 15% and expects the policy to raise $740 million annually.

Secondly, National plan to end commercial property depreciation. Commercial property owners will no longer be able to expense depreciation of commercial buildings and claim this as a deduction. The policy plans to raise $590 million each year.

National also plans to close a “tax loophole” for operators of offshore online casinos and sport betting agencies. This change aims to generate $179 million per year.

Finally, National also plan to introduce user pays immigration levies. They cite that these costs are not a major consideration for those looking to immigrate to New Zealand. The price of these levies is expected to be half that of similar levies in Australia. National hope to generate a further $123 million annually form this change.

National plans major cutbacks on government spending on back-room functions and consultants fees which is expected to save New Zealanders $994 million a year.

The tax policy aims to give tax breaks to the average New Zealander. Families through changes to thresholds, tax credits, childcare and working for families with an average income of $120,000p.a. can expect to keep up to an extra $250 a fortnight while households with no children can expect to keep up to an extra $100 a fortnight. Minimum wage earners and superannuants would pay $20, and $26 less tax a fortnight respectively.

National is also expected to make some changes to how residential property is taxed. Firstly, they plan to roll back the bright line period from 10 years to 2 years, which will be a welcome change to anyone who has had to deal with these rules. They also plan to reintroduce interest deductibility on residential rental properties, this however is phased in over 3 years. Owners of residential rental property will then be able to fully expense and claim a deduction for interest payments on their mortgage.

There is no mention in the policy announcement of repealing the top 39% individual tax rate, and interestingly no mention of National’s thinking on the Trust tax rate

As has been the case for the last few elections taxation looks to be one of the battlegrounds between the major parties.