Fowler said he felt the policy would not help those already struggling to rent properties at the moment.
"The ones who end up generally paying for it are the ones who can't afford it.
"Some investors, yet again the smaller ones, they get scared and they sell, so now you're getting less and less properties that are available to rent, because people sell them, and it just makes it harder and harder for tenants."
He said people who wanted to own their own home needed to have good money habits, rather than rely on a tax system that could help them through the door.
"I started with nothing when I built my first property, I saved up for a long time.
"If someone really really wants to do it, they'll do it, they'll find a way."
The working group, led by former Finance Minister Sir Michael Cullen, expected the tax would raise more than $8 billion over five years.
The tax would be set at the income earner's top tax rate, for most this would be 33 per cent.
All three government parties will be discussing how to proceed with the working group's recommendations, with a decision expected in April.
Prime Minister Jacinda Ardern told media the Government would now take a bit of time to form a consensus around its response.
Labour and the Greens both support a capital gains tax, but New Zealand First has been critical about such a tax in the past.
Nation Party leader Simon Bridges said the recommendations were an "attack on the Kiwi way of life".
The key recommendations from the working group are
• Capital gains tax to apply after the sale of residential property, businesses, shares, all land and buildings except the family home, and intangibles such as intellectual property and goodwill.
• Tax rate to be set at the income-earner's top tax rate, likely to be 33 per cent for most.
• Calculation of gains not to be retrospective - tax to be applied to gains made after April 2021.
• Art, boats, cars, bikes, jewellery, personal household items and the family home to be exempt.
• Losses on the sale of assets bought before April 2021 will generally be able to be used to reduce tax paid on gains from other assets.
• Increase the threshold of the lowest tax rate (10.5 per cent), allowing more income to be taxed at the lower rate.
• Increase social welfare net benefits to allow similar benefits as low-income earners' post-tax threshold adjustments.
• House on farms and surrounding land up to 4500sq m exempt from capital gains tax, calculated as a percentage of total farm value.
• Capital gains tax on small businesses can be deferred (rollover relief) if annual turnover is less than $5 million and sale proceeds are reinvested in similar asset class.
• No support to make company tax progressive, ie, smaller companies paying less than 28 per cent.
• Capital gains tax estimated to raise $8.3 billion over five years.
• Expand coverage and rate of Waste Disposal Levy, expand the ETS and use congestion charging.
• Better tax benefits for KiwiSavers on low and middle incomes.
