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Land taxes are known to be amongst the most efficient forms of taxation, as land is an immobile factor; property (capital value) taxes are less efficient owing to the tax on improvements. However there is little international (or New Zealand) evidence regarding the distributional impacts of land and property taxes. Nor is there much New Zealand evidence on their potential fiscal implications or about the taxes' impacts on asset values and debt positions. Using both partial and general equilibrium models, we explore impacts that may arise from the imposition of land and property taxes in New Zealand. Keywords: land tax: property tax, 1. Introduction Many developed countries, including New Zealand, face the prospect of significant structural central government budget deficits (IMF, 2009; New Zealand Government, 2009). These pressures make it sensible to [...]

This paper develops a model of the housing market to examine the long-term consequences of different types of capital gains taxes. The model, which uses an overlapping generations framework to model the housing demands of agents who differ by age, income, and wealth, incorporates rental and owner-occupancy options, credit constraints, detailed tax regulations, and a construction sector. It suggests capital gains taxes will raise rents, increase homeownership rates, promote smaller houses, and increase the net foreign asset position. The welfare implications are less clear, particularly for young low income households that will face higher rents. Keywords: inflation; credit constraints; capital income taxes; housing markets; home-ownership rates; monetary policy, 1. Introduction This paper develops a micro-founded macroeconomic model to analyse the long-term effects of capital gains taxes on New Zealand's residential property markets. The model is a version of [...]