New Zealand needs capital gains tax, says OECD

The OECD (Organisation for Economic Cooperation and Development) is urging New Zealand to introduce a capital gains tax, saying it could help correct a distorted housing market that harms the poor. In its latest biennial report on New Zealand, the Paris-based OECD notes that house prices remain high despite recent slight falls and that home ownership rates are dropping, unlike in most other OECD countries. It also notes that many people in rental accommodation have a job but still cannot afford to buy a house under normal banking rules. It blames this in part on the taxation of rental property, which it calls regressive or favouring the already wealthy. A capital gains tax was also proposed by the recent Tax Working Group, which said it could raise between $4.5 billion and $9 billion a year, depending on how wide the net was cast.
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