Tax working group agrees property fairly taxed

A Herald article and an Editorial published over the past week have suggested that property is undertaxed and rental property owners are able to buy property more cheaply than owner occupiers. Both these claims are wrong, but it is not the fault of the writers.

In claiming that rental property is under taxed, evidence was provided through the Tax Working Groups (TWG) background paper, which included a study in marginal effective tax rates between different investments or assets. To their credit, the writer noted that the NZ Property Investors' Federation disputed this, but then said that our argument was "very arcane". Not knowing exactly what arcane meant, I looked it up. As it means hard to fathom or mysteriously obscure, I thought I would write this article to demystify our argument for them and the general public.

The first point I would like to make is that the NZPIF were very grateful to the Tax Working Group for considering our concerns, taking the time to meet with us and confirming that rental property isn't undertaxed compared to other assets as their background paper had originally said.

Rather than being an arcane argument, it was a sound argument that the Tax Working Group graciously considered and agreed with.