And Wellington commercial landlord Brent Slater has warned it could be as disastrous as Labour's speculator tax in the early 1970s, which pushed property prices up 38 per cent in six months.
Ms Thomas-Teague, who has bought nine flats and homes in Wellington and Levin in the past 11 years, said that whenever governments introduced new taxes the market compensated. People looking to sell properties would want more to compensate for the fact they would have to pay tax on their capital gain.
If the tax had been in place for the last couple of years - when property prices had fallen - the Government would have got very little, if anything, from a capital gains tax, she said.
Ms Thomas-Teague, who also works as a property manager for other landlords, described herself as a long-term investor, building up a portfolio so that in time she would be able to live off the rents when she retired.
"I'm not a fat cat landlord. I know maybe 20 fat cat landlords but, for the most part, they are Ma and Pa who have a property or three who are just trying to save for their family's education and saving for their own retirement."
Mr Slater, vice-president of the Wellington Property Council, said Labour's tax on property speculation in the early 1970s just drove prices up.
Wellington property investor Mark Dunajtschik said the tax could cut both ways and the Government could end up paying out to investors who were forced to sell their properties at a loss.
Massey University property professor Bob Hargreaves said the tax had had the effect of driving up prices in Australia, where people had sold off second homes and put their capital into bigger and better homes.
He said it was unlikely to bring in much money, and could lead to an outflow of capital if landlords, who counted on capital gain to get a good return on their properties, sold up to invest elsewhere.
Source http://www.stuff.co.nz/
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