Statement made by Ross Buckley, lead Agribusiness Partner, KPMG

The Agribusiness sector including Farmers and Maori Authorities will be relieved at the ruling out of a land tax and Risk Free Rate of Return Method (RFRM) today by the Prime Minister.

Landowners stood to be significantly adversely affected if a land tax or RFRM was introduced. This was recognised by the Tax Working Group and options for exempting the Agricultural sector were mooted at the time.

In a triumph of pragmatism over theory, the Government has ruled both options out completely. The implementation of RFRM would have had negative practical implications on cash flow for land and building owners in the agricultural sector.

The sting however, remains in the tail for property investors as the Government has made it clear that tax on rental properties will change.