Now or never: Give us a capital gains tax or else

OPINION: The day I stopped buying a home of my own, I went out and bought a big slice of consolation cake.

I sat in a cafe, eating, staring into space, replaying the conversation that sealed my decision to give up, over and over again in my head.

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A real estate agent I had just talked to had told me that the housing market was so hot right now that it was even “scaring” him.

Imagine that, a piranha afraid of being bitten.

Not a day goes by without us hearing another story about how badly the New Zealand housing market is performing.

Out of breath, these tales describe the high market prices almost as if they were a surprise, as if it were a previously tame animal that suddenly went insane because no one is in charge of it, as if it is not the product of a system. designed and manufactured by human minds.

Meanwhile, first-time buyers stand at the barred windows of open houses across the country, cheeks pressed against sweaty metal, while inside their Boomer and Gen X parents snorted through well-loaded feeders. , braying: “It takes a lot of work and sacrifice to buy a house! Stop drinking latte and start scrubbing floors!”

Bring up the capital gains tax as a way to open up the market a bit, perhaps return some of these spoiled beasts to their natural habitats, and you’ll get deeper grunts and scowls, if not actual grunts.

“Taxing capital gains is not the Kiwi way,” say the Guardians. . . I mean real estate developers and investors.

“What’s next? Suggest that first-time buyers be no What is the real reason there is so much pressure on the real estate markets? Absurd!”

The animals at this zoo “seem not to want an inheritance tax, a wealth tax, a land tax or a capital gains tax, but they still want to complain about the growing inequality of wealth,” Sir said. Michael Cullen, whose tax work the group concluded that a capital gains tax was a pretty good idea, actually.

By “animals” I mean “New Zealanders.”

Well, Sir Michael, I’m here to tell you that I want a goddamn capital gains tax, I wouldn’t say no to a wealth tax, and if I don’t get it, or something like that, I will. ll. . . well, I may never vote Labor again.

Look, I know Prime Minister Jacinda Ardern was carrying a lead weight shaped like Winston Peters when she said there would be no CGT on her shift, but that was three years ago, and three years politically could well be three eons. .

The market is broken.

The day people started paying almost $ 2 million for ordinary suburban bungalows, it was really broke.

If you don’t think it’s a disaster and that it deserves something drastic government action in the form of taxes, you too could be broke.

As we sit here, wringing our hands, wondering what to do about it, the landlord class becomes more anxious and conservative (by which I mean greed), the stick they wield on this and any future government becomes more big, and any possibility of having to make tangible and far-reaching changes gets farther and farther away.

We’re at the point where we do something radical, like. . . oh, I don’t know, taxing capital gains? – to fix these complex system-wide problems now, or we’ll end up with the owners’ tail wagging the dog for generations to come.

And the class of homeowners will only grow as we rapidly approach the point where property is the only place to “safely” invest for your future.

As more and more people buy into the idea that property means prosperity without problems, that group will become larger and more unwieldy, perhaps even more desperate.

It could mean that if you don’t have that opportunity, you will face intergenerational poverty; that housing, the most basic human need, is considered a luxury.

If millennials and Gen Z think they’re getting run over now, wait for the stampede to come.

Meanwhile, there are thousands of empty “ghost houses”, with land deposited by real estate speculators abroad that previous governments welcomed with open arms; empty rural towns where houses can be cheap, but jobs and infrastructure are scarce; and our green spaces and heritage homes pitched to developer-wolves as a “solution” to the cost of living in our cities.

It’s almost, almost too much to bear. Can’t blame anyone for shrugging and saying, “It’s a weird beast, but that’s just the market, buddy.”

As a friend recently said, only a courageous government can fix this housing crisis.

They will have to commit to broad change and make us take some medicine with the bitter pill of radical adjustments in the market.

I don’t want to act like a hysterical interlocutor, howling in the shadows and offering no solutions, but I’m not an economist or a policy writer either. I’m just a normal Jo who would like the house to be accessible to everyone.

So some of these ideas may be simplistic, but the discussion as it stands now is getting us nowhere, we need a radical change. And if radical change sounds painful or scary, so is trying to enter the housing market right now, and it can’t be worse than doing nothing and waiting for a change out of nowhere.

• It taxes capital gains that are drawn from anyone who owns two or more homes. First home and the bach are blameless, but after that, you’re fair game.
• Extend the Bright-Line test to 10 years for anyone who owns more than two houses. Enforce it like you mean it. No more real estate speculation.
• Put more controls on rent increases, tie them to inflation. Make it legal for tenants to stop paying rent if major, unsightly problems with the property are not immediately rectified. If people want to play owners so much, do it so they really have to be owners.
• Nationalize or at least strongly regulate the prices of primary products, specifically those used to build homes, which is prohibitively expensive, despite the fact that we grow more than 29 million cubic meters of wood a year.
• Get cheap tiny houses made of kiwi and transportable for emergency housing. Save the country the billions that are being paid for motels and make sure everyone has safe accommodation until the housing situation is under control.
• Invest in inexpensive, low-rent downtown accommodation for essential service workers like police, nurses, cleaners, teachers, and grocery workers. Life in the city center can revitalize local economies and make our urban centers safer and more vibrant.
• Stop building giant, inefficient houses. Smaller houses with shared gardens and lots of public outdoor space cost less and create better social cohesion.
• Invest in cheap and reliable public transportation to open up peripheral rural lands for commuter development.
• Raise the minimum wage from $ 18.90 per hour to the living wage of $ 22.10.
• Invest in state housing at the central and local government level, in the same way that people invest in property. Build so much that no one has to wait for a house or live in a motel again. Make our state houses the envy of the world and a path to home ownership for young families, who can save enough while living in them to buy or build a home of their own.
• Incentivize land bankers to rent their properties at reasonable prices.

There has never been a better time to open all the cage doors and turn on the high-powered hose on all the garbage that homeowners, developers, and real estate investors have been happily stuffing for the past 10 years.

New Zealand’s housing market is worse than a disaster. It’s broken. Time to get a new one.