Labour backs property tax, but not on family homes

Labour leader Phil Goff says his party is prepared to discuss a capital gains tax with the Government, opening the way for an accord on a tax that has long been a political hot potato.

Mr Goff said the party's bottom line would be that the tax would not apply to family homes.

This means it would effectively target investment properties.

The issue is being considered by a Government tax working group, and neither Prime Minister John Key nor Finance Minister Bill English will rule it out.

A capital gains tax on property investment is seen as one way to reduce the tax advantages of rental housing, curb house price inflation and send investment into productive sectors of the economy.

The tax review group is due to report back this year.

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Posted: 14 Sep 2009

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