Labour’s Capital Gains Tax would raid the retirement plans of thousands of New Zealanders by hitting the small businesses they have spent years building, National’s Finance spokesperson Nicola Willis says.
“Labour has been claiming for more than a year that its Capital Gains Tax doesn’t impact businesses, with Leader Chris Hipkins stating that businesses are ‘exempt’.
“But according to Labour’s own policy documents, that is categorically untrue. Under Labour’s proposal, a small business owner who owns the property they operate from would face a Capital Gains Tax when they sell up.
“Labour’s only carve-out is for someone who wants to sell one commercial property and buy a bigger one, because they are staying in the business but operating from a larger premises.
“But if a small business owner decides to permanently sell up, perhaps because they are entering retirement, the property they operate in will be subject to Labour’s Capital Gains Tax.
“That might include a dairy owner who owns a small shop in Hamilton. If the value of their property increases by $100,000 over 10 years, even if that’s just driven by inflation, then the owner will be subject to a $28,000 tax bill when they sell the business upon retirement.
“It could also include a couple who own a small motel in Timaru. If they own and operate that property for 20 years, investing in the business to support their retirement, then any gain in the paper value of that property will also be subject to Labour’s Capital Gains Tax upon sale.
“Of course, New Zealanders don’t just sell their businesses when they retire. When financial pressures intensify, perhaps during the breakdown of a relationship or a difficult diagnosis, Kiwis often have no choice but to shut up shop and move on. Labour would tax them for doing so.
“Despite that, Labour is working hard to continue misleading New Zealanders about its policies, including just 10 days ago when Barbara Edmonds claimed that businesses were ‘excluded’ from Labour’s Capital Gains Tax.
“But the reality is that small business owners like mechanics, dairy owners, bakers and hairdressers, who save for years to buy the property they operate in so they can set themselves up for the future, will all be impacted by Labour’s Capital Gains Tax.
“Claims by Labour that businesses won’t be affected by its tax are politically expedient, but categorically untrue. It is yet more proof that New Zealanders cannot trust Labour on tax.
“Ultimately for New Zealanders, Labour’s Capital Gains Tax will erode their financial security, as Chris Hipkins grabs his share of the small businesses and rental properties thousands of Kiwis have built as their retirement savings plan.
“There is a clear choice at this election, between Labour and its prospective coalition partners with nine new taxes and National promising no new taxes.”
