Will Jacinda Ardern do what is morally right and pay capital gains tax?

Jacinda Ardern likes to talk about what is morally right. She attacked landlords and asked them to do what was morally right by student tenants.

I love it when politicians start talking about morals. Especially when they are faced with a real moral dilemma of their own.

When National were in government they brought in a bright-line test for property saying that if a property was sold inside two years then a capital gains tax would apply to the profit on that property. Labour criticised it at at the time, saying that it didn’t go far enough, and have extended the bright-line test to five years.

Jacinda Ardern also famously made a “captain’s call”?to not rule out a capital gains tax, only to reverse ferret that call and kick the can down the road to the tax working group. Quote:

Ardern’s argument was that housing affordability was an urgent issue and she could not afford to wait to help a generation locked out of the housing market.

“I am maintaining our right and ability to act on its (the working group’s) findings and do the right thing when we?re in government. We?re yet to know what that will be though,? she told reporters on the Tuesday after Robertson’s Saturday morning comments.

?I?ve been very, very transparent on this. We do not think that assets are treated fairly, relative to other forms of taxation in New Zealand. The fact that someone can go out and work a 40-hour week and pay tax on that, while someone can own multiple homes, flick them off for capital gain and is often not treated in that same fair manner, is something that needs to be addressed,? she said.

?Most countries have. New Zealand sits on its own in that regard.”?End quote.

The government have now extended the bright-line test, and the bill is now law, receiving Royal Assent on 29 March 2018. Morally, Jacinda Ardern, being the leader of a party that wants a capital gains tax, and the prime minister of a government that extended the bright-line test to five years, should be paying capital gains tax voluntarily on her $333,000 profit on the sale of her house. The NZ Herald reports:

The PM’s former Pt Chevalier property, the scene for a pregnancy announcement and post-election barbecue, sold for $1.32 million – $333,000 more than she bought it for.


Ardern paid $987,000 for the property in February 2016. End quote.

So, she missed the former bright-line test by a matter of weeks… but well within her own government’s five-year test. Morally, surely, she should be paying capital gains tax on the profit from that property.

Bear in mind too, that a mere six years ago Jacinda Ardern was lamenting ever being able to afford a house. Now she is making a morally suspect profit, tax free, on her property. Enough profit that would buy a poor New Zealand family a nice house outside of Auckland.

Perhaps she should live up to her moralising and voluntarily pay capital gains, because “it is the right thing to do.”

Anyone want to take bets on her doing this?