Todd Talks By Todd Muller

There will be a lot of worried New Zealanders as a result of the Government’s efforts to re-engineer our tax system – and we’re not talking about the wealthy.

There are 403,883 properties in NZ that are larger than 4500m2 and perhaps 50,000 of those are farms.

That suggests a large number are lifestyle blocks – a home on a big section with some fruit trees and a vege garden. A lifestyle, not a business.

It could be the three-bedroom house on two acres in Wyndham, Southland, listed on TradeMe with an asking price of $260,000. The owner may be hoping the proceeds will be enough to secure a room in a retirement village.

It could be the home on two acres at Ruatangata, near Whangarei, which is on the market for offers above $249,000. It won’t matter that the property is a modest home in need of TLC that may suit someone who can’t afford Auckland prices.

Under a Capital Gains Tax, the Government will grab 33 per cent of the gains when these modest properties are sold – even though for those families it is their family home. It will penalise people who may be more hard-scrabble than hard-nosed.

At the same time the multi-million dollar family home in Remuera and Oriental Bay will be tax-free, but those New Zealanders who choose to buy a block on the outskirts of town get punished. How is that fair?

Lifestyle block owners will be treated with the same disregard as farmers. Many farmers don’t feel rich after a lifetime of toiling on the soil. Any gains are likely to be the result of years of hard work.

But a lifestyler won’t be thinking about the returns on a farm. They could have a palatial country estate or a modest version of the good life. The Government will take one-third of any gain either way.

The Tax Working Group claimed that the family home will be exempt but that exception is taken away for anyone who lives on a section of more than 4500m2. The reality is, that’s a little over half a rugby field. Those people are now in the Government’s sights.

Even the family home on a smaller section isn’t protected. Anyone who has taken in flatmates or boarders to help pay their mortgage could find it that much harder to make it work. Anyone running a business from home will be fretting about whether they are building a future or creating a future tax liability.

National will fight the Government’s proposed tax grab every step of the way. We will repeal a Capital Gains Tax and we will not introduce any new taxes in our first term.