RELIEF: New Zealand businesses won’t have to pay capital gains on these family homes

The Government has moved swiftly to reassure kiwis they won't have to pay capital gains on family homes like these.

The Government has moved swiftly to reassure kiwis they won’t have to pay capital gains on family homes like these.

Businesses across New Zealand are welcoming the recommendations of the Government’s Tax Working Group this evening, saying they’re pleased that initial indications seem to be that they won’t have to pay capital gains on any of their 40-storey, 120-bedroom, sometimes floating family homes.

From Fonterra to 2degrees to Foodstuffs, CEOs and boards are celebrating apparent confirmation that family homes will be exempt from a Capital Gains Tax the Government is expected to campaign on this coming election cycle.

“It’s just a big relief, honestly,” said Mark Averill, CEO and senior partner of PricewaterhouseCoopers New Zealand. “We just wouldn’t have wanted to pay tax on something as basic as this.”

Averill spoke to media today as he stood outside the 130m PwC tower at 188 Quay Street on the Auckland City waterfront, a building that the company now describes as its “family home.”

“All the PricewaterhouseCoopers live in here,” he said. “Tim PricewaterhouseCooper, Janet PricewaterhouseCoopers, and the little PricewaterhouseCoopers, Jane and obviously little Tim as well.”

“We call him little Tim because there’s already another Tim,” he added.

“So this isn’t at all where you do business?” asked TVNZ’s Maiki Sherman.

“Oh, no, not for a long time,” Averill laughed. “We do it over there now.”

He pointed across the road, towards the harbour.

“In the sea?”

“Yes”

A silence followed

“May we see it?”

Averill paused, eyes flicking to the left, then back.

“No.”

New Zealand’s richest man, Graeme Hart, likely to be hit hard by the working group’s recommendations, wasn’t available to speak to media today, but was seen moving children’s toys onto his $77 million megayacht, the Weta.

The family home exemption has been a key element of the the Government’s plan to soften the potential political blowback of any eventual capital gains tax.

Prime Minister Jacinda Ardern was quick to emphasize it yesterday.

“I think it’s important to remember, and these are just recommendations at this stage,” she said, “that if you have a home, and that’s your family home, that’s where you live, and if it’s not an investment property to you, or maybe if you just kind of feel like it isn’t, then you’ll be exempt from any tax we’re going to introduce.

“We just don’t want to give regular mums and dads the idea that this is going to tax them, or, really, do anything at all.”

But National leader Simon Bridges has come out aggressively against any form of a capital gains tax, saying that family home exemption was a “smokescreen” to defend legislation that would ultimately be “an attack on the kiwi way of life.”

“The kiwi way of life being, you get up in the morning,” he said. “You breakfast, slip, slop, slap, wrap, flop, flap, you go to work, honest day’s yakka, come home, feet up, fire up the barbeque, sausies, rugby, and funnel hundreds of thousands of dollars into untaxable assets.

“The Government is trying to take that away, and we’ll fight it every step of that process I just laid out.”

Former deputy Prime Minister and Finance Minister Michael Cullen, who led the Tax Working Group, said people should be careful not to be alarmist about the recommendations.

“Really, when you read it carefully, and I encourage everyone to, you’ll see the exemptions are quite broad,” he said. “It allows for all kinds of configurations of family homes, from the family boat-home to the family parking building.”

Cullen confirmed that SkyCity Casino had already received assurances it will be exempt, due to the “hundreds” of people who practically live there already.