The suggested capital gains tax (CGT) would cover assets such as land, shares, investment properties, business assets and intellectual property.
Any profit on the sale of these assets would be added to the seller's overall yearly income, and then be taxed under existing thresholds.
Other personal assets – such as the family home, cars, boats and art – would be exempt from a CGT.
The group's chairman, Sir Michael Cullen says our tax system has many strengths "but there is a clear weakness caused by our inconsistent treatment of capital gains".
He says they're recommending income earned from selling an asset be added to your total income for the year.
Cullen said there may be a fear the move would discourage investment.
But he says that's not backed up by evidence, which shows there's no relationship between a capital gains tax and levels of investment or the lowering of productivity.
He says a tax on capital gains would simply make our system fairer.
Cullen repeatedly stressed it was highly unlikely all the Tax Working Group's recommendations would be implemented.
He says the group is presenting options, not a rigid blueprint.
The Government will reveal which parts of the plan it will adopt in April.
Finance Minister Grant Robertson says they need to fix the gaps in the tax system, but are also working in an MMP environment.
That means they need to build consensus with the Greens and NZ First.
Meanwhile Revenue Minister Stuart Nash says parts of the report surprised him, including analysis that 20 per cent of New Zealanders own 84 per cent of the assets.
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The capital gains tax would raise $8 billion over five years, but the Government has already said that any changes would be tax neutral, so that money would be spent easing taxes elsewhere.
There would be a number of options, one being changes to taxation of personal income.
Cullen has recommended increasing the bottom taxation threshold from $14,000 a year to around $20,000, leaving more in the pockets of low earners.
Other recommendations centre around using KiwiSaver adjustments.
However, the group notes that all the proposals "are likely to have only a minor impact on income inequality".
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As part of its work, the group looked at the impact on the housing market.
The working group's analysis says rents could rise but house prices would fall if the Government goes ahead with the tax.
It looked at the impacts of similar tax changes on in other countries including Canada, Australia and South Africa but did not find significant rent rises.
In those countries, rents actually fell, however the working group noted New Zealand's low housing supply.
OneRoof editor Owen Vaughan says the recommendations aren't surprising given recent conversations around the tax advantages property investors enjoy.
He says if the Government decides to adopt the proposals, some investors may quickly withdraw from the market.
Vaughan says in the short-term this could put pressure on the rental market.
But tenants could well find home-ownership more affordable than renting as a result of a lowering of house prices.
He says that's been the experience in other countries.
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Whether any of this becomes reality will depend a lot on the politics of it.
National has come out swinging saying the recommendations are an attack on the Kiwi way of life.
Leader Simon Bridges says it would hit every New Zealander with a KiwiSaver, shares, investment property, a small business, a lifestyle block, a bach or even an empty section.
ACT leader David Seymour was also critical, saying the working group's recommendations were "offensive to New Zealand values".
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There's a big question mark over New Zealand First and whether Winston Peters will support it.
Peters has made it clear in the past he is not a fan of a capital gains tax.
Just before the 2017 election, he told TVNZ's Q&A that a capital gains tax was "off the table."
Then, he said it doesn't work and there is no fairness if you haven't got capital losses as well.
Peters also made it clear in the Newshub ASB Great Finance Debate, also held before the 2017 election, that the losses were his sticking point.
Then, he said capital gains taxes "won't work in this country. They won't work in any other country. They never have worked."
Well, let's come back to now.
Peters is dismissing National's claims the report means all sorts of taxes, along with a capital gains tax, are on the way.
The New Zealand First leader's told Parliament nothing's been decided and that'll be the case until the public have a say.
The Labour party has said any changes would not come into force until 2021 - after the next general election - making the issue subject to a vote by the people - and agreement by potential coalition partners.
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The main points include:
• Recommendation to tax the sale of residential property, businesses, shares, all land and buildings except the family home, and intangibles such as intellectual property and goodwill.
• For the tax rate to be set at the income-earner's top tax rate, likely to be 33 per cent for most people selling assets.
• Art, boats, cars, bikes, jewellery, personal household items and the family home would be exempt.
• To increase the threshold of the lowest tax rate, effectively easing tax for low earners.
• To improve tax benefits for KiwiSavers on low and middle incomes.
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In other housing news, new figures show Auckland's first home buyers need to fork out up to $950 in weekly mortgage repayments for the next 30 years.
That's according to figures by analysts CoreLogic showing there were 8350 first-time buyers in the Super City last year - accounting for one-in-four purchases across Auckland.
CoreLogic's figures also show these first home buyers are now paying an average of $856,467 for their properties.
Community groups say the low number of buyers and daunting prices show only elites can afford to buy property now in our biggest city.
Loan Market mortgage adviser Bruce Patten said buyers would need to have saved a minimum 10 per cent deposit of $85,600 and have a combined income of around $150,000 per year to be granted the $770,000 home loan needed to buy a standard entry level home in Auckland.
The figures come as Auckland's median salary sits at $53,872 and community groups warn there could be as many as 90,000 city families unable to even afford a KiwiBuild home at a maximum price of $650,000.
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Investigations are under way after a man died following a police shooting in Kawerau.
A man was shot after fleeing police - who were reportedly investigating a bank robbery and family harm incident this morning.
Police are in contact with the man's family but are not commenting further.
The Independent Police Conduct Authority has been notified.
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A second Queensland fruit fly has been found in Auckland - again on the North Shore.
The single male fly was found in a trap yesterday and is the second Queensland fruit fly to be found in the past week.
The first was discovered in a surveillance trap in Devonport last Wednesday.
The latest find was in the suburb of Northcote, and means an area of the suburb is now under a Controlled Area Notice.
Ministry of Primary Industries director general Ray Smith says despite the discoveries, it doesn't signal an outbreak.
Because they were two single males found some distance apart, there's no evidence of a breeding population, which is the real worry.
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Get ready for wild weather, whether or not Cyclone Oma hits New Zealand directly.
Forecasters say it's still too early to confirm exactly where Cyclone Oma will hit, but either way New Zealand will be on the receiving end of some heavy rain and strong winds.
MetService says thunderstorms and bands of heavy rain and gale force winds are expected to affect western parts of the New Zealand's South Island and the central North Island today.
Meteorologist Ben Noll says people need to be prepared, especially those camping and attending outdoor festivals.
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A much-loved Christchurch building is about to be officially reopened.
A $167m restoration of the Christchurch town hall has been taking place since the big earthquake eight years ago.
Lead architect Peter Marshall says the building has a strong history in the city.
Marshall says when people see the space they will see the value in it for Christchurch.
For more on this story, tune in to Newstalk ZB
Auckland Council is demanding details about safety issues with its e-scooters, giving Lime until noon tomorrow to provide the information.
In a joint statement issued this morning from Auckland Council and Auckland Transport, council chief operating officer Dean Kimpton says the council wants assurance after problems with scooters locking.
They want information on the number of scooters affected, the technical issue leading to failure, and proposed solutions including how it will manage pulling affected scooters off the streets, and assurance there will no further malfunctions.
Several people have been injured after the front wheel of the Lime e-scooter they were riding locked up including Auckland man Liam Thompson.
A spokesperson for Lime earlier said it "recently" became aware of the operational issue affecting certain scooters and an investigation was under way.
Last month, Lime temporarily removed all of its 550 scooters form the streets of Zurich and Basel in Switzerland after a series of incidents when the front brakes of the scooters were allegedly automatically activated when they reached their full speed of around 24km/h.
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Thousands of performers are taking to the stage today for the country's national kapa haka festival, Te Matatini.
Wellington is hosting the event, the first time it has been held in the city for 20 years.
There are 46 teams taking part, with 44 from New Zealand. There is also a team each from the Australian cities of Perth and Sydney.
The stage incorporates the world's largest carving, Te Mahau Ko Te Matatini, which spans more than 30m and towers more than 13m into the air.
The Ministry for Culture and Heritage expects up to 65,000 tickets to be sold over the four-day festival.
Chief executive Bernadette Cavanagh said kapa haka makes a significant contribution to New Zealand's national identity and plays an important role in Māori language renewal throughout the country.
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That's the Front Page for today, Thursday, February 21, making sure you're across the biggest news of the day. For more on these stories, check out The New Zealand Herald, or tune in to Newstalk ZB.
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