A Week in Review

Richard AshbyPartner, Gilligan Sheppard

Political party tax promises comparison

A couple of weeks back, AWIR covered a number of Parties election tax policies. With not much happening in New Zealand’s world of tax last week, this edition is dedicated to a brief recap for those of you who missed the previous edition, plus a few extras:

Labour:

  • Increase the tax on incomes more than $180k to 39%.
     
  • No other changes to other existing tax brackets and rates (still no mention of any change to the trustee rate).
     
  • No other new taxes introduced during the next parliamentary term.

Maori:

  • A vacant house tax. Leave your house unoccupied for more than three months in any one year and face a 2% tax on its capital value.
     
  • A capital gains tax of 2% on properties other than the family home.

Act:

  • A three-tiered personal marginal tax rate regime as opposed to the present four-tiered system, dropping the 30% rate so that you would be taxed at 17.5% from $14k to $70k.
     
  • Cutting the GST rate to 10%, but only until June 2021.
     
  • Temporarily exempting redundancy payments from tax.

National:

  • No new taxes or increases to existing taxes.
     
  • Within three years, adjust income tax brackets for inflation and regularly thereafter.
     
  • Temporary increase in tax thresholds from 1st December 2020 to 31st March 2022 – $14k increased to $20k; $48k to $64k, and $70k to $90k.
     
  • To improve the rental market – remove ring fencing of rental losses and reduce five year bright-line period back to two years.
     
  • Repeal the Auckland regional fuel tax.

Greens:

  • Introduce a wealth tax – 1% where individual net wealth over $1m, 2% where over $2m. Application to those using trust structure and ability to defer the tax on a home until it is sold.
     
  • Introduce two new income brackets from 1st April 2021 – income over $100k taxed at 37% and over $150k taxed at 42%.

NZ First:

  • Increased penalties for tax evasion.
     
  • No increases in personal or business taxes and oppose any plan to introduce a capital gains tax.

Advance NZ:

  • 0% tax up to $35k, lower flat upper tax rates for individuals and businesses.
     
  • Review tax arrangements for multi-nationals.
     
  • No capital gains tax on sales of residential properties and remove GST from real estate fees.
     
  • Removal of GST from food and medicine.

New Conservative:

  • $10b in tax cuts via changes in bottom tax bracket (first $20k tax free) and petrol tax reductions. 17.5% bracket extended to $60k, 30% to $100k and incomes over $100k taxed at 33%.
     
  • Government charges such as council rates exempt from GST.
     
  • Introduce ability for couples to split income to reduce income tax.
     
  • Repeal of Auckland regional fuel tax.
     
  • Explore replacing GST with a financial transaction tax – Every Transaction Tax.

TOP:

  • Introduce a tax-free universal basic income of $13k pa for those over 18, and additional $2,080 pa per child.
     
  • Introduce flat tax of 33% on all income, which would also apply to companies, trusts and PIE’s.
     
  • Introduce a 33% property tax based on the equity value of each property owned (3%).
     
  • Remove tax from Kiwisaver investment earnings.