Friday, December 1, 2023

National to tax foreign property buyers, cut fuel taxes

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National Party deputy leader and finance spokesperson Nicola Willis, left, with party leader and Botany MP Christopher Luxon. Photo supplied

The National Party says a family with children and on the average household income will be up to $250 per fortnight better off under its tax plan, released today.

Party leader and Botany MP Christopher Luxon says New Zealand should be a country where if people work hard, they can get ahead.

“But after years of economic mismanagement by Labour, topped off by two years of rampant inflation, huge increases in interest rates, and a shrinking economy, most Kiwis are going backwards.

“In particular, the squeezed middle is being left behind. These are New Zealanders who work hard, sometimes juggling multiple jobs and family responsibilities, but inflation and high tax rates are eating away their incomes.

“National’s Back Pocket Boost tax relief plan will increase after-tax pay for the squeezed middle, making a family with kids, on the average income of $120,000, up to $250 a fortnight better off, and an average-income child-free household up to $100 a fortnight better off.”

Luxon says the ‘Back Pocket Boost’ increases after-tax pay for the “squeezed middle” from 1 July 2024 by shifting income tax brackets to compensate for inflation; expanding tax credits to reach more modest income earners; introducing the FamilyBoost childcare tax credit; and increasing Working for Families tax credits for working families from 1 April 2024.

He says Kiwis will be better off by up to $250 more per fortnight for an average-income family with children; up to $100 more per fortnight for an average-income household with no children; up to $20 more per fortnight for a full-time minimum-wage earner, and lowering the tax they pay for additional hours worked; and up to $26 more per fortnight for a Superannuitant couple.

“National’s changes to the personal income tax brackets are capped at $78,100 of income, meaning everyone earning over this amount will receive the same amount of tax reduction per week.

“Our plan is carefully targeted to ensure that those who will benefit the most are working New Zealanders. It’s about time they got some relief from Labour’s cost-of-living crisis and National will deliver that to them.

“It’s not right that someone on the minimum wage is so close to the 30 per cent tax rate, that if they choose to work longer hours, those hours are currently taxed at 30 per cent. National’s changes will mean a full-time worker on the minimum wage will only pay 17.5 per cent tax on extra hours worked.

“Tax relief will be delivered through a combination of adjustments to tax brackets, increases in tax credits for those on modest incomes, tax rebates for childcare costs and increases to Working for Families payments.”

Luxon says National’s tax plan also reduces major cost pressures faced by working people by removing some current and planned petrol taxes and reducing the taxes on rental properties which have driven higher rents.

“We will roll back Labour’s extension of the brightline test from an unreasonable 10 years, which sees mum and dad investment property owners treated as speculators, to two years, restore interest deductibility for rental properties to reduce pressure on rents, and remove new taxes on commonly-used digital services such as food delivery apps.

“National’s plan will make life easier for almost every New Zealander and is deliberately targeted to most help those in the middle who often feel overlooked. They deserve to keep more of their earnings and I have every confidence they will spend their extra cash more wisely than the Labour Government would.”

National’s tax plan includes four new “targeted revenue measures”. They are:

  • $740m on average per year from introducing a 15 per cent foreign buyer tax on purchase of houses worth over $2 million
  • $525m on average per year from ending the commercial building depreciation tax break
  • $179m on average per year from closing a tax loophole and ensuring offshore operators delivering online gambling to New Zealanders, pay tax
  • $123m on average per year from moving to user-pays immigration levies, excluding tourist visas.

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