Outrage over CGT recommendation

The Tax Working Group’s recommendation that a capital gains tax should be introduced on a range of assets, including rental properties, has prompted outrage from many investors.

While the TWG believes that, on balance, a capital gains tax will lead to "some small upward pressure on rents and downward pressure on house prices”, investors have a different view.

NZ Property Investors Federation vice president Peter Lewis says a capital gains tax will not impact on the property market in the way that the TWG is expecting.

He says many investors will sell up their rental properties before the tax regime changes and this might lead to some short-term decrease in prices.