You need to realise that with a basket case sharemarket and managed funds industry that bricks and mortar is a good investment choice and helps fulfill vital social needs for our country.

Interestingly only 2 out of the past 28 income years has property investment made a net loss for the Government. The Tax Working Group didn’t want that statistic published.

Now I agree that many investors have bought property with an intention of resale, so they make gains on revenue account – not capital account, yet they get away with paying no tax. We NEED a legislative change to draw a line in the sand and perhaps have a clear law that investment properties purchased and sold within a period of time (eg. 2 years) are to be held on revenue account so tax is payable on any profit, and conversely losses are deductible on any losses made. With 2008 and 2009 not being the most “vintage” years for investors – there will need to be many refunds.

Yes, that is an option. Unfortunately, the issue facing New Zealanders is that our tax system is unsustainable. It has been subjected to many ad hoc changes and policies, such as the above suggestion. What you propose would probably only put a band-aid on an open wound.

There is a large gap in the way property is taxed in NZ and a large tax burden is being placed on the few who are those most mobile – labour and corporates.

Things have to change and property investment rules will be one of those things.