Genter Julie Anne: Taxation (Land Information and Offshore Persons Information) Bill — In CommitteeText is incorporated into the Bound VolumeGenter Julie Anne: Taxation (Land Information and Offshore Persons Information) Bill — In Committee[Sitting date: 09 September 2015. Volume:708;Page:6437. Text is incorporated into the Bound Volume.]JULIE ANNE GENTER (Green): As speakers in this debate have already indicated this bill is one part of a suite of bills and the Green Party would like to congratulate the Government on taking this very tiny probably ultimately ineffective step towards cracking down on property speculation in the Auckland housing market. That is what this suite of bills as the Minister for Land Information said is intended to do.This particular bill is about collecting IRD numbers in respect of property sales and purchases. We support that. It is going to be incredibly useful to understand exactly what is going on in the property market because up until now we have not known how many of the buyers are using foreign capital to purchase homes in Auckland. We do know that almost half of the sales in Auckland at the moment are to investors so that is part of the reason that it is more difficult for first-time home buyers to afford houses. We have a huge number of investors in the market and of course you would because the tax treatment for property investment is favourable to property investors and not favourable to first-time home buyers. So this bill is just about getting the information—getting the IRD number.We heard from submitters who are professionals involved in this field that it is not going to be an overly burdensome task to get the IRD number because they are already collecting a whole bunch of other information at the same time. I am sure everyone knows that the IRD number is a pretty short number that does not add a huge administrative burden when the conveyancers already have to collect information and Land Information New Zealand is already collecting information on the property sales and the purchases so all that it is doing is attaching the IRD number. We heard in the Finance and Expenditure Committee this morning from officials that it has been problematic not having the IRD number because people use different names or different spellings of the names—they use all different sorts of things and it makes it more difficult for officials to understand whether or not it is the same person buying and selling homes.So that is why the exemption that is put into this legislation is so problematic—the “main home” exemption that most of the speakers here have referred to. It means that we are not going to be collecting information for a whole heap of property sales and purchases. We continue to have this difficulty for officials in knowing who it is who is buying and selling houses because—Hon Louise Upston: I raise a point of order Mr Chairperson. I would be concerned if that member was referring to matters before the select committee that were not related to this bill. There may be implications for that member if she is.The CHAIRPERSON (Lindsay Tisch): So I just remind the member if you are quoting information from a select committee and the select committee has not reported back that is privileged information and the member would be in trouble if you were divulging information in this debate that has not been released and has not been tabled by way of a report back. So from now on be very careful about anything one might say.JULIE ANNE GENTER: Thank you Mr Chair. What officials said during the select committee in respect of this bill was that it was going to be helpful to have IRD numbers because when we do not have the IRD number we do not know simply whether it is the same person because all they can refer to is the name and there can be quite a lot of variance around that. So it makes it more difficult.The Minister here in the Chamber today Louise Upston and other speakers from the Government have claimed that requiring people to give their IRD number when it is their main home is an added unnecessary burden that makes it more bureaucratic. I am just going to read directly from the submission from the Chartered Accountants Australia and New Zealand which said: “The exemption for a transferee’s or transferor’s main home should be reconsidered.” That was its recommendation. “The main home exemption makes the rules more complex and limits the volume of information on property sales that is gathered and therefore the value of that information.” It said it in the select committee’s own report from the members not the minority view. It said: “We acknowledge that making an exception for a person’s main home adds complexity to the rules and would limit the information available about property transactions”.So nobody is arguing that we should not have the “main home” exemption in the other bill before us which is the brightline test bill but we are saying that it does not make sense to have the “main home” exemption for collecting the IRD numbers. In particular it is going to make the tax rules more difficult to enforce because there is this added exception that says that you are required to give the IRD number if your main home is the third property that you have sold within 2 years. So if one has bought and sold the property that they consider to be their main home three times in 2 years when it is the third time they are required to give their IRD number and they will be subject to the brightline test.The problem is how is anyone going to know if it is their third time buying and selling a property if we have not had their IRD number for the first two sales? Part of the problem that the Government is trying to address here is the fact that our current tax rules around speculation require this intention test and of course no one is going to declare their intention to buy and sell a property simply for the capital gain if they know they are then subjected to the capital gains tax. I would argue that here there is a bit of a loophole because obviously why would somebody declare and put down their IRD number the third time if that means that they are suddenly going to be subject to the brightline test? It makes more sense to collect the same information on all property sales and purchasers. Then we have all the information that we need. There is no additional unnecessary bureaucratic burden coming from putting down an IRD number with the information. There is already a lot of information being collected and assimilated by Land Information New Zealand. Having the IRD number simply makes it easier for us to enforce the tax rules.So I would ask members in the Committee today to rethink their position and to consider what was proposed by Chartered Accountants Australia and New Zealand and what was brought up by a number of other submitters including Ernst and Young. This is not a dramatic change to the legislation. We are not proposing that people should not be exempt from the brightline test for their main home but we are saying that in this piece of legislation which is simply about collecting the information and making sure an IRD number is supplied at point of sale or purchase the IRD number is collected and we have the information on who is buying and selling homes. It will make the tax laws easier to enforce it will give us more information and it does not cost anyone money to put their IRD number down on a form that is already being filled out.I have Supplementary Order Paper 121 and I would ask the Minister to consider it. I know it is late in the piece to consider changes to the bill but this whole bill has gone through under a very truncated process and it would be really unfortunate to introduce this unnecessary complexity to the rules. The way that Supplementary Order Paper 121 works is it deletes the definition of “main home” in clause 4 in new section 156A(1). It will of course need to be teased out in other legislation if we are going to have the exemption for the main home in the brightline legislation. But most important in clause 4 it deletes the new section 156A(2)(a). It just deletes all the exemptions. It means we collect the same information on every property transaction. It will actually make it easier to enforce and it will give us more information.So I would really ask all members in the Chamber here today to consider making this simple change. It will make this legislation better. It will make it easier to enforce tax rules on speculators and I think that would be something that all parties in this House could agree on.