Wow! The government possibly did not expect the reaction and back lash to the announcement of a pretty general capital gains tax being imposed on one of New Zealander’s favourite investments - property! Or maybe they did.
It seems that this is a topic very dear to our hearts, particularly in the case of Baby Boomers who recognised years ago the Superannuation was not going to “cut the mustard” when retirement time came. Many have planned for retirement by investing in a rental property which gets paid off with taxed income and rent returns. Many invest into Kiwi Saver in the belief that the medium risk investment will show a profit when it is time to retire. In other words many New Zealanders are trying to be fiscally responsible.
The reaction to the announcement was huge; property in particular has always been seen as a “safe” option for investment and literally hundreds of thousands of us own maybe one or two properties that we will cash up and reinvest the funds so we can continue to live a moderate lifestyle. It’s not about getting rich. It’s about enriching our retirement years.
Maybe more questions need to be asked about how CGT will affect us all.
Watch this space!