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BUDGET PREVIEW: A Capital Gains Tax surprise?

Be prepared for a cat among the pigeons on Thursday at 2pm with an announcement of the introduction of a Capital Gains Tax.

Just when we thought the generic tax policy process took all the fun out of Budget day surprises, for those of you who remember the days of huddling around the radio to hear the announcements of government policy and tax rises, 2012 could deliver the king of all surprises.

The government has promised innovation to turn the economy around.

And despite its apparent protestations that CGT is off the agenda, it is the glaringly obvious tax which is missing from the broad-base tax regime our tax system is based on.

New Zealand is the odd one out in the OECD, in which CGT abounds.

So why would the government introduce a CGT now, particularly when it has vehemently denied it has ever been on the cards, and that it is an inefficient and cumbersome system?

The celestial stars seem to be nicely aligning on this one.

First, there have been a range of reviews which have called for the introduction of a CGT, including certain members of the Tax Working Group, comments by the Savings Working Group, OECD comments on New Zealand and Treasury briefing papers to the incoming government.

Second, the political will exists, with Labour and the Greens in support and having reaffirmed post-election policies advocating CGT.

And third, while historically CGT was a move to political suicide, the public debate on the issue has eased uncertainty with the voting public and reaffirmed a tax limited in its scope and reach.

It is relatively clear the family home won’t be touched.

Most importantly, however, are recent events which could get it across the line.

Few can contemplate the type of capital gains to be made by the co-founders of Facebook, Mark Zukerberg and Eduardo Saverin, and even some of the original Facebook employees with shareholdings after its IPO launch this week.

The US Government rubs its hands in glee at the resulting tax bill, which could run into the billions of dollars at a time when additional taxes are hard to come by.

Likewise, the introduction of a CGT in New Zealand could go some way in appeasing the opponents of proposed assets sales.

Such a tax would enable a “double dip” from the sale proceeds, both from their initial sale and then in the form of a CGT from any subsequent gain on the eventual disposal of those shares.

Finally, the potential for a reheating of the property market could be assuaged through the impact of a CGT.

While the reheating may have little to do with speculation and more to do with (under) supply and (over) demand, and relative values for earthquake-compliant buildings, a CGT may have a desired effect of keeping a lid on the property sector.

It would also ensure limited opportunity to return to property speculation that will detract the country from its need to develop the productive sector.

That said, a full-blown CGT is unlikely.

With concerns about the property sector, we are more likely to see an extension to the quasi CGT rules already in existence, with a focused taxation of equities and limitations on the deductibility and offset of tax losses.

Examples could include deemed taxation for equities held less than a certain time period (such as, say, three years) and loss quarantining rules for rental properties, or a return to limiting the quantum of amount allowed to be offset against other income such as the specified activity limitations of the 1980s, when only $10,000 was able to be offset each year.

The government has the option of being bold or tinkering around the edges again.

Innovation lends weight to be bold, and a real surprise come Thursday.

Greg Thompson is a partner, tax, at Grant Thornton. 


More by Greg Thompson

Comments and questions

Great, a new way to penalise innovators who take risks to create value - and thereby encourage them to move to easier locations to do it.

Easier locations? The US like Facebook?

nicely put Bryan M. Something has to be done about the "tax free harvesting of inflation .
I am all for CGT, so long as it is, a. charged only when the CG is realised and b, it is spread over the same number of income years the CG was accumulated.

Agreed. Seems harsh to tax inflation.
Also NZ must be one of the last nations left that does not have a CGT (thats actually enforced).
I have had to pay it for the first time and its not really that cumbersome. Atleast it means you are making a profit. You can also claim losses. NZ property investors have made a significant amount without a CGT, this could help hedge any downside.

"I have had to pay it for the first time and its not really that cumbersome."
Spot on, "tax paid money" is ALL yours. A real gain.
It is called, "Certainty", a vital component in any taxation system.

Property investment hardly creates opportunity - look, I own multiple commercial and residential property, but have always felt almost criminal there being easy always around paying tax on large property deals

Alan, those 'innovators' have used the infrastructure this country provides. Therefore, they should pay for its upkeep and development through paying capital gains tax. This is an obvious nod to those who have the means to 'invest' while the rest of the people who work for sub-standard wages here in NZ, pay more than their fare share through renting sub-standard housing and PAYE.

Are you telling me you won't pay 0.36 on that extra dollar you made? Really? You won't take that extra 0.64? Then I will.

This is long overdue.

Heritage and others, CGT on property is an absolute red herring since most property investors don't and won't sell. CGT on successful business development which is already extremely difficult in NZ so far from large markets will just further reduce employment and the size of innovation pool. Why struggle to create a business here when it can be done so much more easily in a bigger centre?

Exactly the opposite, Alan. It's to reduce the amount of unproductive speculation. There is no new real value created when the housing market rises.

See above.

It's time the government had the balls to do something innovative, and showed some economic vision and leadership.

Tinkering around the edges won't stop NZ becoming another Greece, let alone catch up with Aussie.

Taxing people more is innovative? Govts around the world will be throw up their hands and say "why didn't we think of that??!!"

You know what would take REAL balls, would be to drastically cut the size and scope of govt, wipe out our debt and then cut taxes so much that we just end up with the 15% GST we have now.

Who wouldn't want to live/start a biz in NZ then?

This would be the Building Industries Pearl Harbour. It is already on its knees except Christchurch and now you want to halt the incentive to build new homes.
Take take take from the Gov't.

CGT is deserved but it should be well signaled, not a surprise have a long roll out i.e. not in effect till 2015.

It would be very unlike English and Key to spring nasty surprises...they generally foreshadow every bit of bad news well in advance of the annual budget announcement and only leave good news til the day. So I think this article is just a low probability guess.

It will be interesting to see if there will be Ethnic exemptions from such a tax. That would not go down well.

Ac capital gains tax would certainly appease the envious; unfortunately it will do a little more harm than good to the economy.

Depending on how this plays out a CGT would probably get me to move offshore. Good thing the house is on the market already.

And where will you move to.
Surely not one of the well known Western countries,as they already have capital gains taxes.
Perhps you fancy one of the countries which have an inheritance tax.
Or perhaps stamp duty.
Or death duties.

My comment is less about avoiding tax as to balancing the benefits of being in NZ (tax free capital gains on longterm investment) and business opportunities in other markets.

Depending on how the CGT is levied then the cost of doing business in NZ has gone up and at that point I may be (will be) better investing in other markets.

Yes I may pay tax in those markets but probably the overall economic returns will be higher.

CGT is another cost to business / investment and that will shift the balance away from NZ to other markets. No issue if the tax is on property but an issue if it is on business.

By the way I already have to pay tax on income on some investments even though no income has been earned and there if a real risk that no income will ever be earned. At this stage any capital gain on those investments is tax free but if that changes why should I be paying in advance of actual income.

So agree with that, if they do bring in a cgt I'm off to Auusie. I wonder if farmers will be exempt as often the sale of their farm is their retirement fund.

The fear would be that any new taxes would be used to further expand government and not reduce direct taxes.

I have always believed that it will be the party whom you do not expect,who will introduce a CGT.
But John Key has correctly analysed that the family home should not be exempt,as this is a distortion.



Wow, looking at the comments it is pretty obvious that a CGT is well overdue. From people complaining that they are "victims", to the death knell of the building sector. Well sorry but building sectors in OECD generally have to deal with this tax and don't implode.

Why have such a tax? Because CGT in necessary to prevent driving capital into sectors that are devoid of any real taxation eg NZ res property that are essentially non-productive.

I would also say that NZ should introduce the taxation of its 1 mil odd offshore citizens along the lines of US taxation on global earnings. Now wouldn't that be great! It works for the US.

NZ already imposes taxes on its offshore citzens if they have not obtained a clearance from the non residents IRd office in Dunedin.

Most NZers overseas are not tax resident here. The US systen allows taxation of its citizens up to the level of US federal tax less some exemptions and less overseas tax paid. To get out of this you must renounce US citizenship. Last year around 500 only globally did this.

Why shouldn't we? NZ govt supplies a ton of services to non-resident citizens ranging from diplomatic support to (with some limits) health, super, education etc. Yes there are some limits if th offshore resident turns up at 65 claming a pension but not much. Why should the taxpayers here support people that live overseas for the bulk of their lives?

Politically also this type of tax would be pretty easy to get through with bi-partisan support.

33% PAYE + 15% GST + (x)% capital gains

more than half of my efforts go to the government which i think gives me very little in return!

why do i bother with this honest business stuff i should just do crime it pays better!

GST + ETS = EFFECTIVE GST 28.52% (@ current CPI rates since ETS's INCEPTION).

"33% PAYE + 15% GST + (x)% capital gains more than half of my efforts go to the government which i think gives me very little in return!" - are you serious about this "tax" calc or just an idiot?

Why not leverage our increasing nexus to international IP law development by introducing fines on copyright infringement? Bit like a speeding ticket - nice wee earner for taxpayers.

If National does bring in a capital gains tax I and many of my freinds will be voting for them again. It is obscene that someone with many rental properties can flick one off and make many thousands in capital gains without paying any tax while someone on an average wage who has to work for a living pays 33% tax

The US systen allows taxation of its citizens up to the level of US federal tax less some exemptions and less overseas tax paid.

One of the key problems with the US system is that is very costly (time, effort, money) to comply to. Filing two sets of tax returns, with different requirements, surprisingly isn't a trivial task.

More importantly though - you can effectively be double-taxed through such systems. For example, with the US scheme certain taxes do not fall under the "less overseas tax paid". If you're contracting in NZ for example - then you pay NZ tax on your earnings, then 15% on top of that to the US for "self-employment tax". So, your effective tax rate could be close to 50%.

In my view, taxing overseas citizens generally causes large amounts of headaches all around for little (if any) net benefit. This probably explains why only two countries actually try it - the US and Eritrea.

NZ govt supplies a ton of services to non-resident citizens ranging from diplomatic support to (with some limits) health, super, education etc.

That's a fair point - but taxing overseas citizens isn't the most elegant way of doing this. The US for example has superannuation (social security) only on what you pay in via taxes. NZ could do something similar. Regardless, it should also be noted that NZ only allows you to draw "one" super - and most returning retiring citizens keep the overseas super, and don't draw the (usually lesser) NZ one.

Well said, but let me add more. Let me guess that around 1/3rd of NZ's working age population is offshore, and, in the main, working. The US clearly doesn'ty have anything like that proportion working offshore.

That in itself is a massive issue for managing Crown revenue. Why, because what is left is a size diminished workforce and a much greater proportion of the population not working AND requiring central govt income/health/education support. In deed how many of those that leave these shore are going armed with a NZ taxpayer funded education. Our funding system relies on workers paying PAYE to fund the next generation. Now a lot of our population leaves and, let's face it, will never come back and contribute to you and I. In fact they are more likely to come back and use resources at a later point in time.

Let them pay for what they have received, effectively funding some of a new and younger citizens to gain the same benefits that those overseas have gained.

End of the National government if they do.

instead of a CGT - why not have a GCT - Gold coast tax. Tax those who leave - not those who stay.

CGT: and now we will get an new industry of lawyers and accountants figuring out how to avoid it. A tragedy, and absolute tragedy.

CGT in USA, sure they do, but interest expense on your mortgage is tax deductable.

CGT is AUS, hasn't made housing any more affordable.

Any CGT will have so many exceptions and grey areas that it will be a mine field, and will generate little, its just an envy tax.

To all those kiwi's who do not save, do not look to me to save your arse when it comes to retirement, simply because I have worked damned hard, built up my assets (cash, property, shares) and will not take kindly to another tax.

Some of the comments above say " where will you go? there are CGTs in most countries" True, but there many countries where the welfare transfers are not as significant, and there are many countries where the crowd with there hands outstretched are massively out numbered by those who want to prosper. So one of the reasons to build capital wealth in NZ rather than somewhere else is removed. Go figure, the Government should find ways to attract capital to NZ, not cause it to fly away.

"CGT: and now we will get an new industry of lawyers and accountants figuring out how to avoid it. A tragedy, and absolute tragedy."

So that is just the status quo. We already have these leeches.

"CGT in USA, sure they do, but interest expense on your mortgage is tax deductable."

Yes, but if you pay $10,000 in mortgage interest, and you are in a 31% tax bracket, you only get to write off $3100. It isn't a 100% write off.

"CGT is AUS, hasn't made housing any more affordable."

No, but the services and quality of life are heaps better. House prices is an artifact of a healthy economy and the fact that the property bubble hasn't burst there, yet. If you look at ANY economy that bases value on housing they have all eventually failed. (Kevin Philips, Bad Money)

"To all those kiwi's who do not save, do not look to me to save your arse when it comes to retirement, simply because I have worked damned hard, built up my assets (cash, property, shares) and will not take kindly to another tax."

So you are one of those who has benefitted from rising property prices and caused the very situation that now demands a CGT because you have not paid your way in support of the national infrastructure. Thanks for nothing.


Come on, you presume far too much. I own a single property and live in it. If and when I sell it for a capital gain I will have to buy another place to live in. Residential Rentals? a great business if you want all the hassles that go with it, especially now that the envy crowd are wanting a slice of the action.

As for leeches, these are animals that live off the work and good health of their host, is that the same as a welfare benificiary that doesn't work and relies on hand outs from tax payers. Sounds like a good fit.

Also people who are overseas send their money to New Zealand, like I do, to pay morgage, buy shares and other things, this money helps the NZ economy, if you tax us, then if we renege our NZ citzenship and pull the money out to say live in the phillipines, the NZ economy loses, there is always 2 sides to an argument. Also WHEN i COME BACK i AM LOOKING TO BUY A BUSINESS IN nz using that money gained overseas.

Agree entirely, my business drew large percentage of revenue from offshore, employs many bright NZ residents, and it was grown from scratch.

The CGT crowd would like to get a further tax, after we have paid PAYE, FBT, tax on Dividends, tax on profits, GST on local inputs and consultants, and we put up with employment law on the basis that other benefits do come to those who work hard and smart.

We, the big we as in KIWIs need you and others like you to come back with foreign capital to rebuild the economy. Just because we are the only country in the OECD not to have a CGT is no reason to let one in, in fact it is a reason to rejoice.

If Gareth Mogan and Sam feel so strongly they can donate 30% of their capital gain to the Govt, plenty of religious and other strongly minded individuals donate large portions of their income to charities.

NZ Inc needs a very simple tax system and a paletable CGT will be full of holes like a Swiss cheese, very complex and counterproductive.

Let's hope the party that brings in a capital gains tax has the good sense to include a repatriation clause,thereby making the CGT an exit tax.

Who the hell is Greg Thompson? and shouldn't he be declaring conflicts of interest like the bucket loads of Grant Thornton consulting fees to be made on a Capital Gains Tax before pumping such in the popular press?

NZ needs less parasites, not more, isn't that obvious yet? Or do we need to go all the way down the socialists tax and spend rabbit hole that has bought the Western world to its knees, experience it for ourselves, before these bloodsuckers are put in there place?

What a lot of nonsense if your in property trading you have tax any way. This government will not tax the home owner other than rental properties, they gain nothing From a c.g.t ,

Bleat! Bleat! Bleat! The complaints usually come form the tax dodgers, bludgers and those who are on the gravy chain. Yes, John Key is trying to create a better country which countless prior opposition red neck governments have stuffed up always thinking they are doing the best for the 'people' alias beneficiaries. You've had it for too good for too long..the government can't keep paying your way with nothing or borrowing to do it..

Well if they introduce a CGT so be it the accountants will thrive working out ways around it theyll pay more tax well pay there fees theyre deductible and offset against the profit if there is one not as lucrative as it used to be,rental demand will go crazy ill buy more rent them at higher rates,borrow against them to live no tax there and keep them like you should never never never sell rent rent income borrow its a real nice merry-go-round.

A CGT will be a boon for the top end of the Real Estate market if the family / principal home, as expected , is exempt from the tax.
In fact, with this exemption in place , a CGT tax will hardly raise a sweat if it applies only to realised gains. It will please the ratings agencies, Labour, the Greens and even Hone.

Bleat! Bleat! Bleat! The complaints usually come from the tax dodgers, bludgers and those who are on the gravy chain. Yes, John Key is trying to create a better country which countless prior opposition red neck governments have stuffed up always thinking they are doing the best for the 'people' alias beneficiaries. You've had it for too good for too long..the government can't keep paying your way with nothing or borrowing to do it.

Thats one reason I didn't vote Labour and now (on top of a couple other minor things) I wont vote National next. Doesnt leave me much scope now though!
So let me get this right - I own a business and employ lots of people. Any profit I make each year I pay tax on, I contribute to my employees savings because they cant be trusted to do it. I put what I can into my mortgage so when I retire Im not a burden on the country. Now what youre saying is you want a share of any profit I make (through no fault of my own incidentally - house values rise through nothing I do!) and then take a big fat chunk of me so you can pay for crims to get drug rehab, professional DPB scroungers and keeping the natives happy!
Mr key - think again and undertand what got you into power for the second time (barely I might add!)
where is the incentive for me to add value to anything I do?

Most people would think about CGT .The commie Greens want one ,even to the point of indexing it.Labour would exempt the family home,except on death the family would inherit it.When the family on sell it CGT would kick in.Really that is an inheritance tax ,whatever way it is dressed up.ALL SCARY FOR ALL HOME OWNERS.

My plea to the Govt is: If you are determined to introduce such a tax please keep it simple! We do, of course, already have a form of CGT by way of the complex tax liability on holdings of offshore investments (excluding certain Aussie listed investments). These rules, introduced 3 - 4 years ago, require investors to assess a notional income based on the cost of these investments., if those investments don't pay "high enough" dividends and even if they decline in value and there is no ready market to sell them. I am struggling right now to complete my current tax return and I can tell you it is an absolute nightmare to try and get it right.

Absolute garbage!!! it will not happen under National, it will only appear under a Labour Govt, who inturn disperse it to the bene people, and when that happens the flood gates will open to exit the country, watch and see.
We have 4 married kids and 3 now live off shore, with the 4th going through the process of elimination of departure.

How will this affect overall property prices?

We have seen rents / yields rise as a result of removing depreciation.

Will we potentially see property values (and rents) rise to offset the post tax returns investors need to make property investment worthwhile?

I think rent will continue to rise. But don't worry, because we already seeing many of our tenants rents paid by WINZ

It's just money shuffling, take it off the people who work hard and give it to the bludgers....

Can't wait, the removal of building depreciation claims has already caused an increase of my rental income by 15%. CGT will add another 20% increase to the rents. I will then buy another property fast and offset all the extra income by getting a 100% mortgage!!

I see that some of you are nothing but parasites; quite willing to strip whatever you can out of society and put nothing back. But still happy to use the infrastructure built by everyone elses taxes.

Don't be thick. Anybody who has built anything that adds value over years has almost certainly paid a bucket-load of taxes and created a heap of jobs all of which also paid tax.

Probably much of any capital gains tax collected will simply be a tax on inflation. Advocates of CGT are fixated on property assets, but there are many others - and most property will be exempted as principal homes, simply not be sold, is already taxed under existing rules or is in an area where values have declined rather than increased.

Singapore doesn't have Capital Gains

We already have a CGT for those with an intention to sell or a mixed view about whether they will sell real estate. Whats interesting about how it is deployed is that it refers to when you 'deal' with property.
I think this has left the gate open for the IRD to tax people when they refinance against a property and use it as leverage. If they use the same wording and broaden the existing CGT to all real estate except family homes plus other commercial interests and the CGT can be applied when refinancing that would raise a lot of money, now THAT would put the cat in with the pigeons.

Is taxing rental property really the only thing they can think of? What about the billions of dollars worth of farms and business?

Property investors are just people, no huge lobby groups, an easy target.

Be prepared to build thousands of state houses. All those providing rental accommodation are sick to death of abuse and damage from many tenants. Remember for every action there is a re-action.
We tend to only see the politics and not what is really going on behind the scenes.

If the national govt brings in a CGT ,it would take away one of the main election planks from the opposition parties.

I think that could be a strategic move that would not only be a smart move economically but also bea winner politically.

I agree with 'Here we go again'. If I have worked hard to build a successful business, employing others that might not have been employed otherwise, have paid tax on the businesses income, and any profits that I take from it - why should I be penalised when I sell it (or pass it to other family members)? Likewise with shares - my money is helping keep those NZ businesses running, employing NZers - perhaps I should just sell everything and "invest" in art & jewellery (assuming National would follow Labour and excempt those *REALLY PRODUCTIVE" parts of the economy).

Most likely a CGT for non resident investors will be introduced.

That would face less resistance from local investors but at the same time help in cooling the resurgent property market.

If we controlled inflation with a harder currency, we wouldn't have capital gains on assets that do not increase in real relative value e.g. houses. I support the idea of taxing those who are taking advantage of this anomoly in our financial system, however, I would be more supportive of fixing the actual problem which is inflation.

CGT would make way too much sense as an economic policy for National, it would actually improve economic performance..What happened to the "let's sit and wait what happens" policy?

If any move in this direction levels the investment playing field then I most certainly do support it.
Though I prefer Mr English's moving on seriously reducing the number of "takers" "non-producers" aka unnecessary bureaucrats, as the best way forward for our economy.
The dead weight of central and local government is reducing our economy to a crawl.

NZ is one of the few countries in the world that does not have a CGT. Probably inevitable one will be introduced at some time.In Australia, there is no CGT on the house in which you live but for an investment property, the CGT if you sell within 12 months is 50% but reduced to 25% if held for min. 1 year. Big revenue earner for the Govt. particularly in a time of high public indebtedness.

Thanks for the info. Aussie, but tell me, do you (or anybody) know why Governments strike a "special tax rate" on CG? I would've thought it would be simply included in your income returns in the year/s it accrued. This would mean some "going back over" sure, but how difficult would that be with computers doing the maths?

The govt. are looking at ways to increase the tax revenue without demolishing the tax cuts the middle class received a while ago from 39c down to 33c.
Agreed there has been a increase in GST, but obviously more has to be done to get our country out of the financial debt we have accumulated.
In America they have endured 2-3 decades, of Republican tax breaks for the upper income earners, big businesses, and corporates who have obviously done very well out of it, and huge spending increases on wars etc; but it has done nothing for the other 90 % of working class America. Now there is the highend upset as the Govt. tries to impose new tax hikes on that top 10% to try and help get their country back into budget surpluses and addressing the debt issue.
Here we have an opposite situation where there has been too many years of Labour run govt. with the socialist mentality, the likes of beneficiaries and lower class have been capitalizing on the easy money while the working class pay for it. Enough was enough and this was when national got into power.

National have the Republican model, as they represent the higher end working class and corporates, however it's an unusual ( and may I say Labour Party Direction) they have taken with this new tax as it is directed at these very people.
That said I understand why they have done it and no doubt with bipartisan support from Labour.
The country needs to get out of the red with our debt, exactly the same as the US. With the ever increasing billions of debt, the interest on that debt, the downgrade in credit rating which increases that interest on that borrowed money, it's not helping us as a country. Budget surpluses are something to strive for tho not easily met in this current climate.
Former President Bill Clinton who was last to run his countries budget at a surplus was quoted as saying, " Although higher end earners initially disapproved of his tax hikes, they understood and eventually welcomed it for a term as it allowed the Govt. to provide incentives through spending to get middle America back working and return the economy back into growth after the Reagan era.
I believe this model to also be true for us for a period while we get the country and the economy growing again, which once out of the red will lower taxes, lower cost of living, increase incomes and dare I say it possibly lower GST. All will benefit including beneficiaries.

Anonymous 7:06. NZ does not already have a capital gains tax, although income tax is often levied on capital gained. That's as it should be, and as it should be left. .

Obviously not much on the news front, hence this stone thrown into the bush by the proponent of this tax. Just because lots of failed socialist states in the OECD have a CGT doesn't mean we have to follow suit, delivering more lollies for bureaucrats to find ways to spend. What we really need is for councils to stop treating property owners as financial hostages, for politicians to stop bribing voters with ouzo on the beach promises, and to spend only what can be afforded by the populace. Only way to stop this nonsense is for recipients of other peoples taxes not to be able to vote. That means beneficiaries, those in jail, those on government jobs lose the right to vote. That way they can't be bribed to vote for freebies.
My guess : no CGT in this budget, not in any form at all.

A couple of comments have predicted correctly in my view. All that is needed is for IRD to be told to tighten up on what is a business. Any gains in a business can include capital on sale of a residential investment. The business is about obtaining gains however htey come. Rent is one form Profit on sale isthe other. Voila. Easy. Perhaps even no change to legislation or very little but none as far as everyone who does not spend time reading the Income Tax Act.

All we need is enforcement (and understanding) of the existing tax laws. We already have taxes in place for capital gains but there is widespread disregard for them and/or people are not aware of the rules.

If you purchase something with the intention of re-selling for a profit, then the gain is taxable under existing legislation. No debtate, no fuss, it is taxable. So rather than further complicate the tax regime, my advice is to enforce the existing rules.

What makes me smile is the "investors" you see on TV news and programmes who have just bought a property and they openly state they will probably re-sell for a profit......if only the IRD were watching then these tax dodgers would be paying a CGT and we wouldn't be having this debate.