David Cunliffe has given five different answers to the question of whether or not CGT will be due on the family home when your parents die.
The answer is maybe and that’s final as far as he’s concerned because whether it is or whether it isn’t he’s got a problem.
If it is it will be a death tax by stealth which would be politically unsellable.
New Zealand families will be distressed to learn that Labour would force them to sell their deceased parents’ home within a month of their death or face a punitive capital gains tax, National Party Finance Spokesman Bill English says.
“The more David Cunliffe tries to explain his complicated capital gains tax, the more he ties himself in knots and confuses New Zealanders,” Mr English says.
“Last night on NewstalkZB, he contradicted his finance spokesman by saying Labour’s capital gain tax would apply to a family home after the death of a parent, unless it was sold within a month.
“In other words, he would force families to rush through the sale of their parents’ family home at a distressing time in their lives, or penalise them with a new tax.
“Just hours earlier, on RadioLive David Parker said the capital gains tax would not apply.
“If David Cunliffe and David Parker cannot get their story straight, it is little wonder that New Zealanders are confused and uncertain about Labour’s higher tax agenda.
“This is just one of five new taxes Labour and the Greens would impose on New Zealanders. This would stall New Zealand’s good economic momentum, creating uncertainty and costing jobs
“By contrast, National’s clear economic plan is successfully supporting higher wages and more jobs. It is steering New Zealand back to surplus this year and ensuring government spending is invested wisely to deliver better results,” Mr English says.
But if CTG isn’t levied on the family home when your parents die the tax take won’t live up to their projections which will leave a big hole in their budget.
Voters have a right to know the answer before the election.
Prime Minister John Key stepped up his attack on Labour’s capital gains tax today, suggesting it will create a headache for grieving children who inherit a house on the death of their parents. . .
Mr Key said: “You’d have to say by any definition it’s a complete and utter mess.”
Mr Key said Mr Cunliffe had yesterday told New Zealanders “that if they don’t sell the family home of their deceased parents, then within one month they will have to start paying a capital gains tax”.
“‘That is a horrifying thought for New Zealanders to be put in that position. Probate wouldn’t even come through within one month.
“I think everyone would accept the number one priority when your parent or parents pass away is not whether you should be out there flogging off the family home so you don’t have to pay a capital gains tax, it’s dealing with all the emotions and stress and issues that go with losing a loved one.”
Labour’s policy states the tax is payable only on the gains since inheritance and only when the home is sold.
Mr Cunliffe this morning said the fine details of when an inherited home would be liable for the tax would be worked out by and expert advisory group.
“Other countries have a range of periods — Aussie uses two years, some countries from the point of death, others from the point of settlement.”
Mr Key said Labour should have the answers now.
“We are now a couple of weeks out from an election this is a key policy for Labour and they can’t tell New Zealanders when it comes to their number one asset, their family home, how it will be treated.”