Capital Gains Tax Calculator: How Much Could You Pay?


Earlier: The Tax Task Force recommended that the government put in place a capital gains tax and use the money earned to lower the personal income tax rate and target polluters.

Sir Michael Cullen’s task force has recommended a series of changes to New Zealand’s tax system. Here they are in a few words:

• Capital gains tax (CGT) to be applied after the sale of residential real estate, businesses, shares, all land and buildings except the family home, and intangible assets such as as intellectual property and goodwill.
• The tax rate should be set at the employee’s highest tax rate, likely to be 33 percent for most.
• The calculation of earnings should not be retrospective – tax should be applied to earnings realized after April 2021.
• Art, boats, cars, bicycles, jewelry, personal household items and the family home are exempt.

• Losses on the sale of assets purchased before April 2021 can generally be used to reduce gains paid on other assets.
• Increase the threshold for the lowest tax rate (10.5%), which allows more income to be taxed at the lowest rate.
• Increase net social assistance benefits to allow benefits similar to low income after adjustment of the tax threshold.
• House on farms and surrounding land up to 4500 m² exempt from CGT, calculated as a percentage of the total value of the holding.
• CGT on small businesses may be deferred (rollover relief) if annual turnover is less than $ 5 million and the proceeds from the sale are reinvested in a similar asset class.
• No support for making corporate tax progressive, ie small businesses paying less than 28 percent.
• The capital gains tax is expected to bring in $ 8.3 billion over five years.
• Extend the coverage and rate of waste disposal tax, expand ETS and use congestion charge.
• Better tax benefits for low and middle income KiwiSsavers.


Esther L. Steinbach

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