Treasury advocating strongly for CGT

The Treasury has released the briefing it gave to incoming Finance Minister Bill English after the election, featuring a comparison between the effective tax rates on various asset classes.

It shows that despite recent changes to the tax system, housing is still a much more attractive option tax-wise than shares or bonds.

At a 33% marginal tax rate Treasury calculated that debt instruments (mainly bonds) have a real effective tax rate of almost 50%, with domestic shares at just over 45% and foreign shares slightly lower at about 42%.

Meanwhile, rental property has an effective tax rate of only 25% and owner-occupied housing isn't taxed at all.