Thursday 25 January 2007

Alliance Party media release

The Alliance Party says a capital gains tax could help people priced out of the overheated property market.

"A capital gains tax on all but the family home would be a significant step to make buying a house more affordable in the medium term," says Alliance tax spokesperson Professor Jim Flynn.

He says the issue of affordable housing runs deep to the heart of what it means to live in socially just and equal society.

"Listening to the response of National and Labour to this issue, it seems they are both relying on market forces to fix the housing problem that market forces created."

"The Alliance is proposing real and effective solutions aimed at helping families into homes, whereas the National Party approach in particular seems to be based on increasing profits for developers."

Professor Flynn says a capital gains tax would discourage investors from buying up more and more investment properties on the grounds they are taxed less than other types of investments, allowing prices to stabilize.

"In conjunction with other Alliance policies such as low-interest, no deposit state housing loans, and a major investment in building public housing, we could offer a helping hand to younger and low- income people to own their own houses."

Professor Flynn says a capital gains tax on investment properties would also offer a greater incentive to invest in companies.

"New Zealand firms would be less likely to become bargain basement takeovers from offshore, and this could also encourage companies to invest in research and development, upskilling and paying their staff more."

ENDS

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