Twyford wrong

The Herald reports:

Rampant speculators are cashing in big on Auckland’s property market, with one house sold five times in just nine months.

The humble three-bedroom home in Papakura was repeatedly flipped between February and November last year, its price spiralling from $335,000 to $590,000 – a capital gain of $870 a day.

Two of the transactions were settled on the same day, giving the seller an instant $80,000 profit without ever taking possession.

“This is frenzied activity,” Labour’s housing spokesman, Phil Twyford, told theWeekend Herald. “These people are making massive tax-free gains at the expense of ‘Generation Rent’.”

Last August National introduced a law change so that a property (except your main one) sold within two years of purchase is automatically taxed as income on the gain. This means that they will be paying (probably) 33% on their profits. This incidentialy is massively greater than the 15% capital gains tax Labour had proposed.

So Twyford is wrong – any purchases after 1 October sold within two years are taxed. He is campaigning on a falsehood.