The Government says there's no need for a capital gains tax to cool the housing market, as in effect there's already one in place.
The Labour Party is calling for a 15 percent capital gains tax, excluding the family home, to help take the heat out of the housing market.
Revenue Minister Todd McClay said profits made by speculators and dealers who buy properties with the express intention of reselling are taxed on what is in effect a capital gain, and there is no need for new measures.
"Where somebody buys a property or buys shares with an intention of the capital gains being accrued ... if their intention is to make a gain from the capital, their normal income tax rules apply, and therefore there is a capital gain."
Labour says it's rubbish to say that constitutes a capital gains tax, and finance spokesperson David Parker says a much broader tax is needed to bring house prices and rents under control.
"Particularly in Auckland where the average house price is now $698,000 where the price on average has gone up by $200,000 in the last five years under the National government - and unless we do something the Kiwi dream of home ownership is going to continue to fade."
POWER PLAY with Jane Patterson takes an in-depth look at the debate on housing