Ordinary New Zealanders bearing brunt of bright-line test – National
The National Party says ordinary New Zealanders are bearing the brunt of the government’s extension to the bright-line test.
In a bid to cool the housing market, the government doubled the length of time investors have to hold on to additional property to avoid paying tax when they sell.
National’s revenue spokesperson Andrew Bayly says it has instead hit people who are not speculators – including parents trying to get their children on the property ladder.
“So let’s say they put up 20 percent of the deposit, couple of hundred thousand, the offspring put up another 200,000 to buy a million dollar house,” he said.
“When they sell out and the value of the $200,000 has gone up, they will then have to pay capital gains on that increased value.”
He said if parents split the deposit cost with their child and were then bought out in five years, the parents would have to now pay capital gains tax on the increase in value.
Bayly said the child then has to hold onto the property for 10 years, otherwise they would have to fork up to cover capital gains tax when they sell it.