Phil Goff’s claims that a Capital Gains Tax (CGT) would prevent property speculation and fix housing affordability are wrong, ACT New Zealand Housing Spokesman Sir Roger Douglas said today.
“If a CGT were a serious driver of housing affordability, then Australia - who has had a CGT since 1985 - would not have the most unaffordable housing in the English speaking world,” Sir Roger said.
“If we look further afield, the United States and Canada also have nation-wide capital gains taxes, yet both countries have experienced housing bubbles in which house prices soared. Clearly, a Capital Gains Tax is not a significant factor in the demand - and therefore price - of housing.
“If we’re serious about housing affordability we must address the real issue behind the rise in prices: red tape. It is regulations such as the Resource Management Act, the Auckland Metropolitan Urban Limit and the availability of land for residential development that have conspired to make the construction of new housing far too difficult. These regulations drive up costs and slow down development, creating shortages which push prices up.
“If we really want to help low-income New Zealanders into the housing market the last thing we need is yet another tax. We need to get out of the way of construction and let builders and developers get on with the job. Ridding ourselves of red tape is the most cost-effective solution,” Sir Roger said.