Capital gains tax to focus on equity

The paper, by two tax academics Leonard Burman and David White, suggests a capital gains tax not only on investment property but also  - as in the United States - capital gains on owner-occupied housing above a certain level (in the United States, gains above US$500,000).

But in a forum on the question in Wellington yesterday, Burman's main emphasis was on the issue of widening the tax base, while Pricewaterhouse Coopers tax partner John Shewan - who is not a fan of a capital gains tax - said there is an issue to be dealt with around investment properties.

Shewan said a lot of the talk advocating a capital gains tax was confused and emotive.

Given advocates usually suggest exempting the family home, and that this is two-thirds of a property market valued at $600 billion, he said he did not see how it could possibly cure any imbalances.