As decision on capital gains tax looms, property investors getting 'nervous' - expert

With the potential implementation of a capital gains tax, investors are getting "nervous" - with such a tax likely to make investing in property less profitable, an expert says.

In January, Finance Minister Grant Robertson said the Government’s Tax Working Group is expected to recommend some form of capital gains tax. The group's recommendations are due out next Monday.

Nick Goodall head of research at CoreLogic NZ told TVNZ1’s Breakfast investors are getting "nervous".

"I think it’s very likely they will suggest some form of a capital gains tax and it probably will have some form of impact on the market," Mr Goodall said.

"Investors certainly now are getting a little bit more nervous about their investments. Profitability is going to reduce and that’s no doubt going to decrease the demand for property at the moment."

This comes after house prices around the country grew at their slowest rate in six years to January with affordability and a lack of supply proving to be barriers for new buyers.

The latest QV figures show the annual growth rate dipped to 2.9 per cent in the first month of this year, a level not seen since February 2012.

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CoreLogic NZ’s Nick Goodall says investors are getting nervous. Source: Breakfast