by The Landlord
The Real Estate Institute has slammed the proposed Real Estate Transfer Tax, with president Murray Cleland saying it goes much further than a capital gains tax, which taxes “only the difference between purchase price and sale price. This taxes the entire proceeds. As such it is an extension of current rating imposts, effectively a ‘double tax’ on householders for services provided”.
However MCC has downplayed the proposal, saying in a press release, "Recent media reports about a proposal for a Real Estate Transfer Tax in Manukau city have given the impression that the council is moving to put such a tax in place. This is incorrect".
Cleland says that Manakau would almost certainly find such a tax self-defeating.
“The net result will be that people who have a choice will buy houses outside of Manakau to avoid the tax, while those who have no choice but to live in Manakau will be penalised for their lack of mobility.”
Local authorities should instead “look more closely at the increasing prevalence of the dubious overvaluing of residential properties as a way of levering up the council’s rating income,” Cleland says.
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