The Gold Coast economy has grown by 25 per cent since 2020/21 to surpass $55 billion, but perhaps the more significant story is what sits behind the headline number.

For decades, the Gold Coast has been viewed through the lens of tourism, lifestyle and population growth. The latest State of the City Report suggests that perception is increasingly out of step with reality.

Released by Invest Gold Coast, the report ranks the Gold Coast as Australia's largest non-capital city economy and, perhaps more notably, second nationally behind Sydney for Economic Complexity, a measure that assesses the diversity and sophistication of an economy.

It's a result that places the Gold Coast ahead of Melbourne, Brisbane, Perth and Adelaide, highlighting the extent to which the city's economic base has broadened beyond its traditional industries.

Today, the Gold Coast supports more than 350,000 jobs, is home to over 83,000 businesses and generates $19 billion in annual exports. Manufacturing now accounts for 62 per cent of international export growth, while sectors including health, education, advanced manufacturing, technology and professional services are becoming increasingly important contributors to the local economy.

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Gold Coast Mayor Tom Tate said the report confirmed the city's evolution into one of Australia's most significant economies.

"The Gold Coast economy continues to grow at an incredible pace. This is no surprise to those of us who have watched the evolution up close," Mayor Tate said.

"As one of the most entrepreneurial, investment driven and opportunity focused economies in the country our ambition has been realised and possibilities are endless.

"The Gold Coast has built a reputation as the city that says yes. We say yes to investment, yes to opportunity and yes to people who want to build something.

"It's this mindset helping us drive major growth across health, advanced manufacturing, screen production, marine, technology and the knowledge economy."

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While population growth has been one of the defining stories of the past decade, the report points to a broader economic transformation taking place.

The city's knowledge economy now contributes $7.9 billion annually and supports around 31,000 jobs, while the health and wellbeing sector contributes $5.2 billion and employs more than 42,000 people. Together, the six priority sectors identified in the report account for almost $24 billion in economic output and more than 145,000 jobs.

One of the strongest examples is the Gold Coast Health and Knowledge Precinct at Southport. The 200-hectare precinct now contains more than $5 billion worth of health, education, research and innovation infrastructure and supports over 16,000 jobs.

The report also highlights the growing role of advanced manufacturing, particularly in aerospace, defence and modular construction.

Gold Coast-based Gilmour Space Technologies recently became the first Australian commercial company to attempt an orbital launch, while companies including Modscape and ModnPods are helping establish the Yatala-Stapylton corridor as one of Australia's fastest-growing advanced manufacturing hubs.

The city's entrepreneurial culture is also translating into business growth.

Since 2019/20, the number of businesses operating on the Gold Coast has increased by 22 per cent, while firms employing more than 200 people have grown by 80 per cent. The report suggests the next challenge is converting more local start-ups and medium-sized businesses into nationally significant companies.

Development activity remains another key indicator of confidence.

There are currently more than $23 billion worth of major projects underway across the Gold Coast, supported by a record 75 active cranes, a figure that now exceeds Brisbane and represents a 150 per cent increase since 2016.

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Importantly, the report notes the next phase of investment will need to extend beyond residential development.

While 93 per cent of crane activity is currently tied to housing, Invest Gold Coast argues future investment will increasingly need to focus on cultural, civic, infrastructure and industry-enabling projects that strengthen the city's long-term economic resilience.

Invest Gold Coast Chair Will Hodgman said the city was now benefiting from years of economic diversification.

"What is happening on the Gold Coast is the result of the city's economic base broadening, fuelled by industries with long-term, high-growth potential," Mr Hodgman said.

"This is no longer a secondary Australian economy, the Gold Coast is becoming a globally connected city with deeper capability across health, knowledge and creative industries, advanced manufacturing, technology and exports."

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Looking ahead, the Gold Coast's population is projected to exceed one million residents by 2046.

For a city that was once largely defined by tourism and lifestyle, the latest figures suggest the Gold Coast is becoming something more significant, one of Australia's most diverse and economically sophisticated urban economies, and increasingly one that national and international investors can no longer afford to overlook.

Joel Robinson

75 cranes, $23 billion pipeline and a $55 billion economy: Inside the Gold Coast economic boom

Ron Bakir's Homecorp has sold more than 75 per cent of the apartments in its wellness-driven Florence Residences in Surfers Paradise following its first weekend release.

The <a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217">26-storey project on Monte Carlo Avenue</a>, which commenced construction earlier this year, has seen a flurry of buyers secure their slice of the Gold Coast's latest wellbeing-focused offering in one of the nation's most competitive property markets.

Since the pandemic, the Gold Coast's population has grown by more than 11 per cent, a rate approximately four times faster than Sydney's, driven largely by lifestyle changes and interstate migration. While buyer activity has moderated in some markets nationally, demand for newly built dwellings on the Gold Coast continues to gain momentum as purchasers increasingly prioritise lifestyle, amenity, wellbeing, liveability and long-term investment potential.

&nbsp;

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Homecorp CEO Ron Bakir says buyers today are looking for more than just a home.

"What we are seeing is a shift in how people define value in property," Bakir says.

"What attracts residents to new developments is a desire for more than just a residence. They are looking for a place that complements their lifestyle, supports their wellbeing and reflects the way they want to live into the future.

"Lifestyle, longevity, proactive health, wellbeing, connection and a sense of community are increasingly shaping purchasing decisions, particularly on the Gold Coast, where these factors continue to be a major drawcard."

[smartcode_project:default project_id=150414 project_image_fid=372744]

Bakir says Homecorp is responding to this shift through an approach that places greater emphasis on design, amenity and experience working together to create places that feel considered, connected and enduring in value.

Inspired by Eastern European design, Florence Residences will comprise 120 apartments alongside a private residents-only wellness club featuring a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium, and a spacious yoga and Pilates studio.

The development will also feature a residents-only lounge with private dining facilities and a rooftop bar, premium outdoor entertaining areas, a hotel-style lobby lounge, generous bike parking, and pet-friendly amenities including a heated dog wash.

[smartcode_project:default project_id=150414 project_image_fid=372742]

A limited number of apartments remain available, with an exclusive collection of four-bedroom sub-penthouses set to be released in the coming months.

Florence is one of the latest additions to Homecorp's expanding multi-billion-dollar property portfolio, which also includes plans for a <a href="https://www.apartments.com.au/news/qld/homecorp-lodges-plans-for-260-million-moroccan-bathhouse-inspired-tower-in-budds-beach">$260 million development in Budds Beach</a> tailored to the growing wellness market.

A development application has been lodged for a 27-storey, 156-residence tower at 8–10 Acacia Avenue and 25–27 Oak Avenue, featuring a residents-only Moroccan spa-inspired sanctuary.

Apartments at Florence Residences are priced from $1,249,000, with construction expected to be completed by late 2027.

[smartcode_project_cta:default project_id=150414]

Buyers rush to Homecorp's Florence Residences as Gold Coast wellness trend gains momentum

The NSW Government has expanded its $1 billion Pre-sale Finance Guarantee program, broadening access for affordable housing providers and smaller residential developments as it seeks to accelerate housing delivery across the state.

The Minns Government says the program has already helped bring forward more than 600 homes across Sydney and regional NSW since launching in September 2025, with similar models now adopted in South Australia and Western Australia.

The latest changes, announced by Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully, are designed to improve access to finance for projects that have planning approval but are struggling to secure funding.

Among the key changes is an expansion of support for community housing providers. The program will now support up to 100 per cent affordable housing projects valued at up to $30 million when delivered by not-for-profit providers, while support for larger affordable housing developments will increase for projects worth up to $80 million.

The government says the changes will help accelerate the delivery of housing for low-income workers, older people, people living with disability, and those at risk of homelessness, while reducing reliance on direct grants or subsidised loans to bridge funding gaps.

The eligibility criteria for smaller residential developments have also been broadened. The previous $5 million minimum project value threshold has been removed and replaced with a requirement that projects deliver at least four homes.

Support has also increased for projects delivering fewer than 20 homes, with the guarantee now able to cover up to 75 per cent of dwellings in a development, capped at $30 million per project.

The changes are expected to particularly benefit smaller-scale and regional developments, which often face greater challenges meeting pre-sale requirements imposed by lenders.

Treasurer Daniel Mookhey said the scheme demonstrates how government can use its balance sheet to stimulate housing supply without relying solely on taxpayer-funded grants.

"The Pre-sale Finance Guarantee shows how this Government is using its balance sheet to reduce risk and unlock private investment, enabling new homes to move from design to construction faster," Mookhey said.

"This landmark reform allows us to deliver homes for working families at a lower cost to taxpayers, while also maintaining strong financial discipline."

Planning Minister Paul Scully said the program had already proven effective in bringing stalled projects to market.

"The Pre-sale Finance Guarantee has already proven it can unlock stalled projects and accelerate housing delivery by giving lenders the confidence they need to back good developments," Scully said.

"These changes will allow more affordable housing and smaller developments to access support so more homes can be built faster where communities need them most."

Housing Minister Rose Jackson said the expansion would help community housing providers overcome financing barriers that often delay projects.

"We know community housing providers are ready to build more homes, too often they're held back by barriers to finance," Jackson said.

"Expanding the Pre-sale Finance Guarantee helps remove those barriers so more affordable homes can get off the ground sooner."

The announcement was welcomed by the Property Council of Australia, which has long advocated for measures aimed at improving project feasibility and access to finance.

Property Council NSW Executive Director Katie Stevenson described the expansion as a practical intervention that addresses one of the most immediate constraints on housing delivery.

"This is exactly the kind of practical intervention we need right now, focused on getting projects out of the ground, not just approved," Stevenson said.

"It builds on a model the Property Council has worked closely with government to develop following calls for such a scheme ahead of last year's NSW Budget, so it's great to see it being expanded."

Stevenson said the reforms would help unlock projects that are ready to proceed but have been delayed by financing challenges. However, she noted that broader feasibility issues remain a significant barrier to increasing housing supply.

"The biggest challenge in NSW housing today is delivery. Too many projects have planning approval but are simply not financially viable to proceed under current settings," she said.

Speaking at the Property Council's NSW Housing Summit, Housing Minister Rose Jackson acknowledged that feasibility and financing pressures continue to constrain housing delivery, while reaffirming the government's commitment to work with industry on solutions.

Stevenson said the government's recognition of those challenges was encouraging ahead of next week's state budget.

"It's positive to see the government clearly recognising that feasibility pressures are now a binding constraint on supply," she said.

"With the Budget just days away, the focus must be on backing delivery, making sure projects stack up, finance can flow, and more homes can move from approval to construction."

The expanded Pre-sale Finance Guarantee forms part of the NSW Government's broader housing agenda, which also includes planning reforms, the NSW Housing Pattern Book, and a series of rezonings intended to increase housing capacity across the state.

NSW expands Pre-sale Finance Guarantee to unlock more affordable and regional housing

Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.

Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.

The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.

&nbsp;

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Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.

"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.

"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."

[smartcode_project:default project_id=146717 project_image_fid=372227]

Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.

A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.

The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.

Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.

[smartcode_project:default project_id=146717 project_image_fid=372225]

While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.

The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.

The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.

[smartcode_project:default project_id=146717 project_image_fid=372222]

The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.

Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.

"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.

The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.

The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.

Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.

"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.

"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."

Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.

[smartcode_project_cta:default project_id=146717]

Lowe Living launches Jardin House in Camberwell

As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.

Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.

At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.

[smartcode_project:default project_id=134323 project_image_fid=6395]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.

Rothelowman says the site itself shaped much of the architectural response.

“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”

[smartcode_project:default project_id=134323 project_image_fid=6399]

Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.

The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.

Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.

“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”

[smartcode_project:default project_id=134323 project_image_fid=353235]

A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.

The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.

The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.

[smartcode_project:default project_id=134323 project_image_fid=6390]

“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”

At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.

ALAND has commenced construction, and is expecting a completion date in 2028.

[smartcode_project_cta:default project_id=134323]

The Walden pairs house-scale living with North Sydney connectivity

Inheritance

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The world’s wealthiest people will transfer US$15.4 trillion in assets to their heirs in the next decade, according to a recent report.
Published by specialist data analysts Wealth-X, the report focused on the richest 0.1% (those with net assets worth over US$5 million), but it’s a similar story for the more modestly wealthy baby boomers.
With New Zealand’s average national <a href="https://www.stuff.co.nz/business/117903021/house-prices-shoot-ahead-again-as-majority-of-kiwis-say-ownership-unachievable" target="_blank">house price</a> now over $700,000, the heirs of home-owning boomers (as well as people born before 1945 whose significant wealth is often overlooked) will receive a currently untaxed bonanza.
Ignoring this unprecedented transfer of wealth from people who no longer need it to people who haven’t earned it would be absurd. But equitable tax policy must first overcome political timidity and rhetoric.
As New Zealand’s election approaches, forward-thinking politicians should take heart from Sinn Féin winning a majority in the 2019 Irish election on the promise of making the country’s tax system <a href="https://www.sinnfein.ie/a-fair-tax-system" target="_blank">radically more equitable</a>.
While a capital gains tax (CGT) is <a href="https://www.beehive.govt.nz/release/government-will-not-implement-capital-gains-tax" target="_blank">off the table</a> for now, tax arrangements are never set in stone and voters can be open to change.
<h2>Taxing inheritance is nothing new</h2>
New Zealand first taxed inter-generational capital transfers in 1866. However, the rate of estate duty was reduced to zero in 1993 and gift duty was scrapped in 2011. <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2439053" target="_blank">According</a> to tax law specialist Michael Littlewood:
These taxes for many years enjoyed broad political support. Indeed, it was widely regarded as obvious that a significant part – perhaps as much as 50% or so – of every large estate ought to go to the state.
Taxing a person’s wealth when they no longer need it, provided a reasonable exemption is made to support dependants, has been usual since Roman times. In the modern era, inter-generational wealth was seen as eminently taxable, too. Indeed, progressive tax rates were applied to estate taxes before they were first used for income taxes.
In 1979 Australia became the first developed country to abolish estate duty (at both state and federal levels). As analysts Sam Reinhardt and Lee Steel <a href="https://treasury.gov.au/publication/economic-roundup-winter-2006/a-brief-history-of-australias-tax-system" target="_blank">pointed out</a>, support for estate taxes had declined despite “various tax review committees recommending refinements to improve the equity, efficiency and simplicity of the tax”.
<h2>Politics gets in the way</h2>
In New Zealand, Te Herenga Waka—Victoria University’s 2010 <a href="https://www.wgtn.ac.nz/sacl/centres-and-institutes/cagtr/pdf/tax-report-website.pdf" target="_blank">tax working group</a> didn’t consider reintroducing an estate tax or retaining the gift duty then in force. It argued that reforms in the late 1980s had “improved the efficiency and equity of the tax system”.
Certainly, stamp duty is an unlamented tax – although many jurisdictions try to use it to cool overheated housing markets. But it’s not clear why the working group considered estate taxes inefficient or inequitable.
Unfortunately, the <a href="https://taxworkinggroup.govt.nz/resources/terms-reference-tax-working-group" target="_blank">terms of reference</a> of the next tax working group, established by the Labour-led government after the 2017 election, specifically excluded an inheritance tax. While there were good theoretical reasons for such a tax, group member Geof Nightingale <a href="https://www.stuff.co.nz/business/106050956/inheritance-tax-good-economics-and-the-politics-may-be-better-than-they-seem" target="_blank">said</a>, it “breaks down at the politics”:
Inheritance taxes are intensely disliked, so if you haven’t got one it’s very hard to put one in.
The arguments against estate taxes are well rehearsed – usually accompanied by emotive references to “death taxes”. But, in the long term, the current ideological opposition to taxing inter-generational wealth transfers may prove to be an anomaly.
One simple reason for reviving the debate about such a tax is demographic: baby boomers, the wealthiest generation that has ever lived, will increasingly start dying during the 2020s.
Tax policymakers cannot ignore the opportunity – arguably the moral imperative – of taxing and redistributing those transfers.
<h2>Millennials and Gen X will be the winners</h2>
There remain three challenges to achieving a fairer tax based on inter-generational wealth.
First, the application of tax needs to shift from the deceased to the living. In other words, we need to focus on the recipient of the wealth transfer. Ireland’s <a href="https://www.revenue.ie/en/tax-professionals/tdm/capital-acquisitions-tax/cat-collector-general-district-guidelines.pdf" target="_blank">capital acquisitions tax</a> (CAT) applies a flat rate of 33% to accumulated gifts and inheritances over the relevant threshold.
Unlike a CGT, which can be perceived as penalising business owners, a CAT targets unearned windfalls from an accident of birth. This should make a CAT more politically acceptable than a CGT.
Second, the younger generations most critical of baby boomers’ “unfair” acquisition of wealth (Gen X and millennials) must accept that taxing this unprecedented transfer of wealth will promote both inter- and intra-generational fairness.
If we don’t tax and redistribute these transfers, wealth inequalities will be exacerbated and entrenched among future generations.
And finally, arguments in favour of a more equitable system have to overcome the rhetoric of “death taxes”. As far back as the 1960s, Canada’s Royal Commission on Taxation did this by popularising the idea that “<a href="https://www.thecanadianencyclopedia.ca/en/article/royal-commission-on-taxation" target="_blank">a buck is a buck</a>”, no matter how it is earned.
In other words, if you have the money you can pay tax, whether that money comes from labour, investment or inheritance.
So far, only the Greens are proposing any <a href="https://www.stuff.co.nz/national/politics/300044327/the-crucial-feature-of-the-greens-wealth-tax-that-would-exempt-most-family-homes" target="_blank">tax on wealth</a> as part of their election policy offering. But with the generational clock ticking, it’s maybe time for New Zealand to think about getting a CAT.<img src="https://counter.theconversation.com/content/143604/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/jonathan-barrett-129387" target="_blank">Jonathan Barrett</a>, Lecturer, <a href="https://theconversation.com/institutions/te-herenga-waka-victoria-university-of-wellington-1200" target="_blank">Te Herenga Waka — Victoria University of Wellington</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/forget-a-capital-gains-tax-what-new-zealand-needs-is-a-tax-on-inherited-wealth-143604" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Forget a capital gains tax – what New Zealand needs is a tax on inherited wealth

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GUEST OBSERVATION 
Inheritances can have an enormous impact on finances and lives.
Yet in Australia we know surprisingly little about who gets them and how big they are.
New <a href="https://grattan.edu.au/report/generation-gap/" target="_blank">Grattan Institute research</a> provides some answers.
Inheritances are big and growing
A sample of estates from Victoria’s probate office suggests the median estate in Victoria is worth around A$500,000. That’s likely to be close to what it is Australia-wide.
But many are much larger. About 20% are worth more than A$1 million, and 7% are more than A$2 million. Property is the largest component, accounting for about half of the average value.
The main beneficiaries of “final” estates (estates without a surviving spouse) are children, who receive about three-quarters of all inheritance money.
Other family members, such as nieces, nephews and grandchildren, receive about 20%. Friends get about 4%, and charities 2%.
Average inheritances are growing about two percentage points faster than inflation each year, which is a good deal faster than wages or gross domestic product.
There are reasons to believe they will soon grow even faster.
Net wealth has grown strongly among older households. Households headed by people aged over 75 now have an average of A$1 million in assets, up from A$400,000 for a household headed by a person of the same age in 1994.
And most retirees <a href="https://grattan.edu.au/report/money-in-retirement/" target="_blank">don’t draw down</a> on their savings.
Indeed, many are net savers through much of their retirement, meaning there’s only one place their accumulated property and superannuation wealth can go: into bequests.
Inheritances are going to the already old…
These days, inheritances generally don’t arrive when people are saving for a house or trying to raise a young family.
More than 80% of money passed down from parents goes to people aged 50 and over.
The most common age bracket in which people to receive an inheritance from parents is 55-59.
<a href="https://www.propertyobserver.com.au/images/2019/8/20/INHERTANCE%201.png" target="_blank">Click here</a> to enlarge: 
<img src="https://www.urban.com.au/images/2019/8/20/INHERTANCE%201.png" alt="">
It’s the result of good news – parents are living longer.
But as life expectancy grows still further, it will mean inheritances increasingly supplement the retirement savings of middle-aged Australians rather than help young people get into housing.
…and the already wealthy
The wealthiest 20% of Australians get 38% of inheritance money; the poorest 20% get only 8%.
It means the growing wealth of Baby Boomers is likely to end up concentrated in the hands of a select group relatively well-off Generation Xers and Millennials rather than being widely spread.
<a href="https://www.propertyobserver.com.au/images/2019/8/20/INHERITANCE%202.png" target="_blank">Click here</a> to enlarge: 
<img src="https://www.urban.com.au/images/2019/8/20/INHERITANCE%202.png" alt="">
It will reinforce the advantages already enjoyed by people with well-off parents, including better schooling, better connections, and a greater ability to take financial risks because of a parental safety net.
If (as is possible) inheritances end up becoming the dominant route to wealth in Australia surpassing lifetime earnings, there will be less incentive for ordinary Australians to attempt to get ahead through individual endeavour.
We will have entered what French economist Thomas Piketty calls a “<a href="https://www.pbs.org/newshour/nation/how-pikettys-inequality-theory-explains-mr-darcys-wealth" target="_blank">Jane Austen world</a>”.
We don’t tax inheritances…
Calm debate on policy setting around inheritances is <a href="https://insidestory.org.au/death-and-taxes/" target="_blank">hard to come by</a> in Australia.
Inheritances and gifts have been tax-free since the 1970s.
Australia is one of only <a href="https://stats.oecd.org/index.aspx?DataSetCode=REV" target="_blank">seven</a> OECD countries without any inheritance, estate, or gift taxes. Despite the economic arguments for inheritance taxes, there seems to be little appetite to bring them back.
…if anything, we subsidise them
Not taxing inheritances is one thing, but actively subsidising them is another.
Superannuation tax breaks were intended to encourage people to save for their retirement and to take pressure off the age pension system.
But given that many retired Australians <a href="https://grattan.edu.au/report/money-in-retirement/" target="_blank">do not draw down on their capital</a>, a large part of the super tax concessions simply boosts the size of bequests.
Super death benefits tax is intended to claw back the superannuation tax breaks when the money is passed on, in order to ensure that the government doesn’t subsidise inheritances.
But, at 15%, the rate is too low to capture the value of the accumulated tax breaks. And it can easily be avoided by retirees withdrawing funds tax-free and then contributing them back as a post-tax contribution, which is tax-free when passed on.
The special treatment of the family home in the age pension means test also acts to boost inheritances at taxpayers’ expense. Without it there would less to pass on.
It’s time to claw some of them back
There is little justification for taxpayers subsidising inheritances. Policy changes could help.
We recommend a higher tax on super bequests paid to non-dependents to better capture the value of the super tax breaks that are passed on rather than used for retirement. The cap on post-tax super contributions should also be lowered, to limit the re-contribution strategies.
The age pension assets test should include part of the value of the family home, perhaps the part above A$500,000. Seniors with higher-value properties should be allowed to borrow against their home using the Pension Loans Scheme.
This would give them the ability to stay in their home but would mean that some of the wealth that would otherwise be passed to heirs (most likely in their 50s) would instead be used to fund them, taking pressure off the pension.
Owain Emslie, Associate, Grattan Institute 
Danielle Wood, Program Director, Budget Policy and Institutional Reform, Grattan Institute.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/rethink-inheritances-these-days-they-no-longer-help-the-young-they-go-to-the-already-middle-aged-122029" target="_blank">original article</a>.
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