Prime Minister Christopher Luxon stands to make almost $200,000 tax-free on the sale of his Wellington apartment this month, 1News can reveal.
Having sold another property in Auckland’s Onehunga for a $280,000 profit at the beginning of September, it brings his projected untaxed income to almost half a million dollars in recent weeks. Both sales are still pending settlement.
The moves have prompted Labour to say the Prime Minister is in a “conflicted position” and therefore should be open to discussing a “more progressive tax policy”.
The Prime Minister’s Office today confirmed Luxon moved into Premier House over the weekend with refurbishments now complete.
Premier House is the official residence provided for prime ministers, paid for by the taxpayer, and managed by the Department of Internal Affairs.
The property, valued at $37 million, requires significant maintenance in the long term.
It is used for official engagements with the prime minister usually living in a smaller apartment on the upper floors.
Luxon was heavily criticised earlier this year when it was revealed he was collecting a $52,000 a year accommodation allowance to live in his mortgage-free Wellington apartment instead.
The PM initially pushed back on questions over whether he should’ve taken the allowance, saying he was “entitled” to it, but soon stopped claiming it and paid back the $13,000 he had collected. He later described the criticism around the allowance as “quite full-on”.
Records provided to 1News show Luxon sold the apartment – across the road from Parliament in the Kate Sheppard complex – on September 9 for $975,000.
He paid $795,000 for it in September 2020, making the capital gain – pending settlement – $180,000.
The prime minister quickly changed his tune on Friday when he saw what the public thought of him taking $1000 a week in taxpayer money to live in his Wellington apartment. (Source: 1News)
On September 5, Luxon sold his Grey St, Onehunga property for $930,000 after it was on the market for a month. He bought it in 2015 for $650,000 – a $280,000 profit. That property is also still in the settlement process.
PM couldn’t move in until carpets, curtains upgraded
Luxon was in Auckland today inspecting the Elementum Housing Development in Long Bay. Asked if he believed he should have paid tax on the income from the sale, Luxon said: “No, we don’t have capital gains tax in New Zealand”.
“We think it would be bad for New Zealand because you don’t tax your way out of recession.”
Asked if he made good money off the sale, Luxon said the “sale is still progressing”.
“I don’t know what the point of the questioning is,” he told reporters.
“We don’t believe in a capital gains tax or a wealth tax. We think, for people who actually generate wealth in this country, it’s a massive disincentive and as I’ve said along the way this is a Labour government that took the keys to our economy, put the car in the ditch.
The PM had earlier said there was no problem with taking the supplement despite free accommodation available at Premier House. (Source: 1News)
“We’re getting it out of the ditch and they want to put it back in there again by increasing taxes, by increasing spending and borrowing more.”
He said the refurbishments were “real basic, elementary maintenance”.
“From memory, carpet, paint and curtains … the carpets have been replaced after 34 years. If you’d like to know the detail, feel free to talk to Ministerial Services, who manage government property.”
Asked in March if the building was in a state comfortable enough for him to live in, Luxon said there was “basic maintenance going on” which meant he couldn’t live there.
Asked what the final bill on the refurbishments was, he said reporters would have to approach his office with that question.
“I’m not going to give you a number.”
1News has approached the Prime Minister’s Office for the final cost of the refurbishment, but it has not yet responded.
‘General sense of entitlement’ – Labour
Labour’s deputy leader Carmel Sepuloni told 1News that given the gain the Prime Minister had made, he had to “acknowledge that he’s in a conflicted position”.
“He should be willing to have a conversation about a more progressive tax policy.
“There’s just a general sense of entitlement with the Prime Minister that we have seen.
“[He’s] unwilling to discuss a capital gains tax or making the tax system fairer in any way, and here he is making massive capital gains himself.”
She said Premier House was “good enough” for two prime ministers preceding him – Dame Jacinda Ardern and Sir Bill English.
Ardern, while repeatedly acknowledging the home leaked and needed repair, remained in residence there. Chris Hipkins lived in his Upper Hutt home and did not claim the accommodation allowance expense.
Sepuloni said there should be a conversation about capital gains tax, and it was one Labour was having.
‘Very plush and quite classy’ – apartment specialist
Tommy’s Real Estate agent and apartment specialist John Kettle said the Kate Sheppard apartment building was a “primo” one, close to Parliament and “quite a grand-looking building” with good views.
“It’s good real estate,” he said.
Asked about the gain Luxon made on the property, Kettle said the Prime Minister had “possibly done well” on the sale.
“I would have thought maybe it would have gone for a bit more, but if he’s happy with the price, then that’s good for him.”
Kettle said the apartment had been “done up a bit” since Luxon bought it.
“Mrs Luxon’s got a bit of flair in that regard and I think she had a big hand in that. The apartment is a bit of a standout in terms of that building, there’s a lot of other apartments in there exactly the same size and shape and they refurbished it very nicely.
“It looked more than just comfortable, it was very plush and quite classy.
“I’m pretty sure it would have got snapped up.”
He said capital gain from the property was “fair game”.
“I don’t think they’ve been greedy.”