17 Aug 2009

Greens predict eventual support for capital gains tax

8:49 am on 17 August 2009

Most political parties would eventually back a capital gains tax on real estate if the Government decided to make the move, says the Green Party.

Treasury officials are examining a capital gains tax as one option in its examination of the tax system.

Finance Minister Bill English said the Government would take a lot of convincing on such a tax, Green co-leader Russel Norman will this week write to him urging action.

Dr Norman accepts that what is seen as a vote-losing policy could need consensus among many parties.

But he believes everyone ultimately thinks the tax is the right policy to help head off damaging property bubbles.

He says the Greens would certainly support the policy on properties other then the family home, and he believes Labour would eventually also back the move.

Dr Norman fears another housing bubble might be building, and says the last boom was incredibly detrimental because it made housing so unaffordable, while misdirecting billions of dollars of investment, all of which was borrowed from overseas.

He says a capital gains tax is only one tool of a package that would include building more state housing.