New Zealanders divided over possible capital gains tax, but majority could be swayed, poll finds

Your playlist will load after this ad

The Tax Working Group suggested the controversial tax on investment properties in a report released today. Source: 1 NEWS

A comprehensive capital gains tax (CGT) recommended today by the Tax Working Group hasn't been popular with everyone. But the latest 1 NEWS Colmar Brunton Poll shows that people would more likely be open to the idea if they were to receive a return of some sorts. 

Those surveyed were asked if they would support or oppose a capital gains tax if there was a cut in personal income tax. Forty-six per cent supported the idea and 41 per cent opposed, with the remainder unsure.

The changes could bring in $8 billion of tax revenue in five years, giving the Government options such as decreasing tax for the lowest tax bracket and reducing KiwiSaver tax.

The working group, led by Sir Michael Cullen, recommended boosting the 10.5 per cent bracket, which is taxed for $0-$14,000 earned up to at least $20,000 - allowing workers to keep more of their income.

"If everything is done then it's up to around $15, $16 a week, which is not huge, but if you're on a low income it's significant," Sir Michael said today. 

But among those not impressed by today's announcement was Kāpiti hair dressing business owner Kylie Galvin, who said she would be impacted by a capital gains tax if she chose to sell. 

"It would just ruin the motivation in young New Zealanders to get out there and become business owners," she said. "There's just no incentive anymore."

Read: Capital gains tax recommended by Working Group as well as adjusting lowest income tax rate to create 'fairness' in system

Federated Farmers are also not fond of the idea, calling it a "potential tax burden" for parents who may want to pass down the family farm. 

Baches, shares, town houses and investment properties would be impacted, too. Off the list are the family home, cars, boats and art. 

Andrew King of the New Zealand Property Investors Federation said a CGT could be a disincentive for property investors to buy and provide homes for tenants, "at a time when we really need more of them".

Analysis: Capital gains tax would 'have a big impact on mum and dad investors'

Finance Minister Grant Robertson said today it is important "to look at it as a package". However, National's Amy Adams labelled it as "an attack on the Kiwi way of life, on small business, baches and farms come under fire". 

The Government is expected to respond to the recommendations in April, with any changes only to be implemented in 2021 - after the next election.