Minister defends land-sales tax

Press, Volume CXV, Issue 33804, 29 March 1975, Page 19

Minister defends land-sales tax

(New Zealand Press Association)

WELLINGTON

Only profit from land sales which had heen “significantly enhanced” by such factors as rezoning would be assessable for tax. said the Minister of Finance (Mr Tizard) in Parliament.

He was moving the second reading of the Land and Income Tax Amendment Bill (No. 3). Profit which was regarded as a normal capital gain would not come within the ambit of the bill, Mr Tizard said. The bill is part of the economic package announced by the Government last October and covers land sales made since October 23.

“The profits arising from rezoning and other similar circumstances are largely community-created and it seems just and reasonable that the persons reaping these profits should pay back something to the community in the form of income tax,” he said.

Among exemptions from the tax are instances when residential land is sold and wiil be used by the purchaser for the same purpose. The same rule applies to farming land which continues to be used for this purpose even if there has been rezoning. Mr Tizard said the proviI sion applied to voluntary ! sales or dispositions and also ! to compulsory acquisition by the Crown.

The Opposition’s taxation spokesman, Mr P. I. Wilkinson (Rodney), said it was as bad a piece of legislation as he had encountered since entering Parliament; it would affect wealthy landowners and many poorer, economically vulnerable people. It was clearly a capita! gains tax, Mr Wilkinson said, despite protestations from the former Labour Opposition that it would never introduce such a policy. He believed the Government wanted a capital gains tax on all land sales. Mr Wilkinson said the scope of the bill was far wider than appeared from its wording. The debate was interrupted by the 10.30 p.m. adjournment.