Capital gains tax won't work: ACT

The party's leader, John Banks, spoke out in the wake of Labour’s party conference in the weekend, where it outlined plans to make housing affordable with a 10-year building programme.

The party also wants to introduce a capital gains tax on rental properties.

“Only Labour and the Greens would try to make something cheaper by adding a tax to it,” Banks said.

“Australia, Canada, and the United States all have nationwide capital gains taxes and all have had bigger national or regional housing bubbles than ours.”

He said the biggest problem was a lack of available land.

“As long as councils continue to artificially restrict the supply of land via urban limits, land, and therefore houses, will always be more expensive than they otherwise would. A capital gains tax won’t change this.”

He said the Government should focus on making it easier to build houses by removing restrictions on land and building permits.