PHOTO: Bridges and Parker. Photo credit: The AM Show
Labour MP David Parker says the bright-line test, which slaps a capital gains tax on investment properties sold within five years of their purchase, isn’t a capital gains tax at all.
It’s actually an income tax, he told The AM Show on Friday morning, defending the Government’s consideration of extending it beyond the present five years.
“I can’t tell you if it’s in or out,” he told host Ryan Bridge. “I heard ACT saying this was a capital gains tax – it was actually introduced by the National Party. It’s an income tax. We’re not proposing a new tax – the only thing that is being considered is whether we should extend the period for the bright-line test.”
This might be splitting hairs. Inland Revenue too refers to the bright-line tax, paid on capital gains, as an income tax. New Zealand doesn’t have any form of capital gains tax – any taxes eligible on any gains are considered income taxes.
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