Section 4: Impact Analysis Marginal impact: How does each of the options identified at section 3.1 compare with the counterfactual, each of the criteria set out in section 3.2? Option 1 Option 2 Option 3 Status quo Design options proposed in the officials’ issues paper Design options reflecting submissions received on the officials’ issues Efficiency and Neutrality - - 0 The proposals treat residential investment This option introduces further exclusions from the in property differently to other investments. appropriate circumstances. Fairness and equity ++ ++ 0 This option helps even the playing field between This option more accurately targets property investors. investors and owner-occupiers. Efficiency of compliance - 0 This option would have required people other This option decreases compliance costs for people other than 0 than property investors to apply new property investors compared to option 2 by excluding them from rules. the new rules. Efficiency of 0 0 administration 0 There would need to be relatively minor changes The design features from this option would impose no significant to some Inland Revenue forms and systems. additional administration costs compared to Option 2. Overall assessment + + As the objective was to increase the fairness As with Option 2, fairness and equity outweigh the other and equity of the tax system, this consideration 0 considerations. This option is an improvement over Option 2 outweighs the other considerations and overall with respect to the other considerations and is therefore the we think this option is an improvement over the preferred option. status quo. Key: ++ much better than doing nothing/the status quo + better than doing nothing/the status quo 0 the same as doing nothing/the status quo
Section 4: Impact Analysis Marginal impact: How does each of the options identified at section 3.1 compare with the counterfactual, each of the criteria set out in section 3.2? Option 1 Status quo Option 2 Design options proposed in the officials’ issues paper Option 3 Design options reflecting submissions received on the officials’ issues Efficiency and Neutrality 0 - The proposals treat residential investment property differently to other investments. - This option introduces further exclusions from the in appropriate circumstances. Fairness and equity 0 ++ This option helps even the playing field between investors and owner-occupiers. ++ This option more accurately targets property investors. Efficiency of compliance 0 - This option would have required people other than property investors to apply new rules. 0 This option decreases compliance costs for people other than property investors compared to option 2 by excluding them from the new rules. Efficiency of administration 0 0 There would need to be relatively minor changes to some Inland Revenue forms and systems. 0 The design features from this option would impose no significant additional administration costs compared to Option 2. Overall assessment 0 + As the objective was to increase the fairness and equity of the tax system, this consideration outweighs the other considerations and overall we think this option is an improvement over the status quo. + As with Option 2, fairness and equity outweigh the other considerations. This option is an improvement over Option 2 with respect to the other considerations and is therefore the preferred option. Key: ++ much better than doing nothing/the status quo + better than doing nothing/the status quo 0 the same as doing nothing/the status quo
2018-ria-argosrrm-bill-3.docx