‘Quick flick’ tax will hit Auckland more

Real estate figures prove ‘quick flick’ tax will hit Auckland more

The Government’s new bright line test to tax any capital gain realised from residential property sold within two years of purchase (excluding people’s main home) will make a greater difference in Auckland where speculation is more pronounced latest figures prove, says Geoff Barnett, National Manager of Century 21 New Zealand.

Mr Barnett was commenting on analysis just released by respected property information company CoreLogic NZ Ltd.

It reports about 15% of Auckland’s 31,000 residential sales in 2014 had been held for less than two years, compared to 9.7% (8,400) of the 86,000 homes sold nationwide last year. In Auckland almost a third of house sales are held for less than five years.

“CoreLogic estimates that about 40% of those 8,400 nationwide sales would be up for the tax, with the remainder 60% exempt as they’re the seller’s main home. Tax revenue from those 3,400 New Zealand homes is estimated at about $70 million each year so its impact will not be inconsequential particularly in Auckland,” says Mr Barnett.

“What’s telling is seeing the ‘hold period’ in a year-by-year bar graph over the first 10 years of home ownership. In Auckland the peak years of selling are years one and two. Whereas for the rest of the country if homes are to be sold within a decade they’ll peak in years seven and eight.”

“This analysis confirms that speculation is much more pronounced in Auckland and so the Government’s new bright line test will have a greater impact where it’s needed most. In that regard it’s well targeted public policy.

“However whether it actually slows anything down in Auckland is yet to be seen,” says Geoff Barnett.

For the CoreLogic report please link to: http://www.corelogic.co.nz/news-research/item/look-at-how-long-the-average-new-zealander-holds-onto-a-property/
Ends

© Scoop Media