Capital gains tax: Government announcement expected today

The Government is expected to unveil a capital gains tax announcement today.

The Government will make an announcement on a capital gains tax later today, the Herald understands.

The timing of the announcement has been veiled in secrecy, and Prime Minister Jacinda Ardern has been at pains to say nothing more about the timing of the announcement except to say that it will be in April.

Labour MPs will meet in a conference call at lunchtime today, and an announcement will follow.

The subject of the tax has been hotly debated since the Tax Working Group reported back in February, recommending a CGT and using the money gained to lower personal tax rates and to target polluters.

The group recommended a CGT that would cover assets such as land, shares, investment properties, business assets and intellectual property.

Any gains on the sale of these assets would be added to the seller's overall yearly income and be taxed normally at realisation – meaning a CGT would only take effect when it becomes law.

Other assets – such as the family home, cars, boats and art – would be exempt from a CGT.

It was expected to raise roughly $8 billion over its first five years, with revenue ramping up in the ensuing years.

But Ardern has said that she has kept farmers and small businesses in mind, and the Government is widely expected to announce a diluted version that would only apply residential investment property.

She has also given an assurance that any CGT the Government wants to implement would not take effect until the next parliamentary term.

The National Party has vowed to repeal any form of a CGT that the Government wants to implement, with leader Simon Bridges calling it an "attack on the Kiwi way of life".

"This would hit every New Zealander with a KiwiSaver, shares, investment property, a small business, a lifestyle block, a bach or even an empty section," Bridges has said.

Act leader David Seymour has also attacked a CGT, saying the working group's recommendations were "offensive to New Zealand values".

Green Party co-leader James Shaw has backed a CGT strongly, suggesting that the Government did not deserve to be re-elected if it didn't implement a CGT.

But any CGT would need the support of New Zealand First, which aims to appeal to regional New Zealand, including farmers. Before the working group even reported back, leader Winston Peters said that any CGT would not affect the farming community.

Before the last election, Peters told Q&A that a capital gains tax was "off the table", and during Newshub's ASB's Great Financial Debate in 2017, he said a CGT "won't work in this country. They won't work in any other country. They have never worked. No."

Asked about his previous comments in the House in February, Peters said: "Here's the fine point about a democratic, constitutional Government – and that is we're going to consult the people of this country over the next two weeks."