6 Sep 2017

Labour clarifies land tax position

7:03 pm on 6 September 2017

Labour Party leader Jacinda Ardern has ruled out introducing any tax which would hit either the family home or the land it sits on, saying that's "completely off the table".

Labour Party leader Jacinda Ardern

Labour leader Jacinda Ardern out on the campaign trail today Photo: RNZ / Chris Bramwell

The clarification comes after Ms Ardern earlier left open the door for a potential land tax which included people's residential property.

If elected, Labour wants to set up a tax working group to advise it on possible changes to the tax system.

Ms Ardern has always ruled out introducing a capital gains tax on the family home.

She's now gone further, saying she'd instruct the working group to stay away from any policies which would affect the home or the land on which it is built.

"My message will be very clear to them - do not bring me any recommendation that includes the family home or the land that a family home sits on."

Ms Ardern said the tax working group could still consider the possibility of a land tax, but not one which would hit the land underneath a family's house.

"That will not be up for consideration. It's completely off the table."

A land tax generally takes the form of an annual levy based on the value of the land.

It was one of the recommendations - as part of a broader tax reform package - made by the 2010 Tax Working Group. It was rejected by the National government at the time.

Earlier today, Ms Ardern said Labour's target was not the family home.

But when pressed by reporters, she suggested that guarantee only covered the building itself and not the land.

"Yes, that's the complication of those various iterations," she said.

"That's why I'm saying to the tax working group - 'I want the family home to be off the table, please work through the options that remain available to address home ownership and to address affordability and to make sure our taxation system is fair'."

Ms Ardern was then asked again if she was leaving open the possibility of taxing the land on which the home sat.

"I'm saying that I don't want there to be taxation applying to a family home," she said. "The rest is for the working group to work through."

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