Andrew Nicholl

But the second new rule is that there's a new minimum of 30% tax rate on all capital gains.

So hang on, you've paid more.

And will it be the actual inflation rate year on year?

God, that's going to be quite complicated.

Accountants are going to have a lot more billable hours.

And I know that there's a big push now.

I've seen Nicola Willis, our finance minister, on a few interviews talking to business owners over in Australia or people that are about to start businesses saying, come and do it in New Zealand.

We don't have a capital gains tax and we've got the government that's trying to limit the amount of red tape and allow people to be innovative.

So there might be a bit of a shift in the business community.

So the way it works in Australia is if you make 100K from your salary and you've got a rental property that you're making a 10K loss on, and that could be a paper loss, not just a cash flow loss, the tax department says, okay, we're going to treat this as if you only made 90,000 from your salary because we're going to deduct that loss from your income.

So they give you the tax back on that 10K chunk of your salary.

So your tax refund could be kind of $3,000.

Now, the new rules from the 1st of July, 27, negative gearing for existing property is gone.

So they're getting the same rules that we have here in New Zealand and have had for a number of years.

Now, there's one exception.

New builds still get full negative gearing.

And they also get the old rules on the capital gains tax.

So the government is trying to incentivize adding stock to the market rather than buying existing stock.

Exactly the same as what we do here in New Zealand with DTIs and LVR restrictions.

Now, the way Australia is going to do this is they tax their residents on their worldwide income and gains.