The Committee has recommended some very useful changes as suggested by submitters, including those of the Federation.
Key improvements to the bill include:
On a key Federation proposal seeking clarification of tenant responsibilities for Outgoings – specifically related to waste water charging, disappointingly the Select Committee did not recommend any changes to the original bill’s clause 39.
The next Parliamentary phase for the Bill will be its detailed examination during the Committee of the Whole House stage expected in the coming weeks.
Parliament’s Social Services Committee presented its report on the Unit Titles Bill to the House on 2 September.
It will be recalled that the bill, amongst other things, seeks to:
Parliament is now scheduled to conduct the second reading debate on the bill in the coming weeks.
The Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill was passed earlier this month (17 September).
It will be recalled that the Bill proposed changes around the definition of “Associated persons” in tax law. Amendments were made to stop primarily land dealers, developers and builders escaping tax by operating through closely connected entities (e.g. trusts).
Property investors will need to assess whether their holdings are now tax efficient.
In another tax development, the government appointed Tax Working Group met 16 September (under the auspices of: "Session 3": Revenue raising options) to consider, amongst other things, the policy options of a capital gains tax and a land tax or something similar. The CGT has been mooted to exempt family homes and or owner occupied housing. An immediate problem with this is that some 2/3rds of houses in New Zealand could be immediately excluded from the tax net – thus weakening the tax potential. Other problems might include how the tax might treat $1million-plus properties and farms.
As to the second option – a “land tax model”, some commentators have suggested a low annual rate or levy eg 0.5% be applicable to the property, eg a $400,000 property would pay a$2000 charge per annum – in the same way as it currently pays rates.
Politically, Labour leader Phil Goff announced at the party’s annual conference (13 September) that it would support a capital gains tax but it would not apply to family homes. This means Labour would effectively target investment properties.
Finally, Prime Minister John Key has made it clear National does not favour a capital gains tax.
The TWG will produce a report for the Government by November and it will host a public conference on 1 December to discuss the various tax options. Beyond that, the Government will consider and determine tax policy settings in 2010.
MPs from Labour, the Greens and Progressive parties have been holding an inquiry into banking after Parliament's finance select committee voted against an official inquiry.
Commentators have told the opposition MPs that property was the cause of most New Zealand’s economic problems.
Commentators said banks were "subsidising" cheap home lending and that the Government needed to introduce a land or capital gains tax, to dampen demand. They also suggested adding GST to mortgages and rent was another tool.
The MPs heard submissions on 2 and 3 September and will “present” their findings to Treasury and the Reserve Bank.