Today we continue our series on the tax proposals put forward by the new government. A key part of the Labour Party’s election policy was to establish a Tax Working Group, to look at NZ tax policy.

The focus of this group is expected to look at the balance between income and capital gains, and the taxation of gains arising from property ownership.  Despite some position changes in the lead up to the election, their final policy statements confirmed that the outcomes, if any, of the group’s recommendations will not take effect until the 2021 year.

This means that changes will not be implemented until after the next general election.  The extent and nature of any capital gains taxes recommended is likely to become a matter of much debate in the 2020 election campaigns.

It is worth remembering that NZ already taxes some gains on property sales (e.g. under the 2-year bright-line test).  While it is likely that recommendations will be made to expand the scope of what can be taxed as a capital gain, we need to wait and see how far these will go.

The members of the Working Group have yet to be announced, and no specific timeline or process has been put forward yet.

We will keep you informed as we learn more.