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Property investors are responsible business owners

FOR IMMEDIATE RELEASE


Property investors are responsible business owners

“Rental property buyers are not the root cause of New Zealand’s housing unaffordability problem” Commerce Select Committee members were told today by Martin Evans, President of the NZ Property Investors’ Federation.

Speaking on behalf of 4,700 professional property investors, Mr Evans emphasised that Federation members are unlikely to out bid first homebuyers and pay inflated prices for houses. It is often the other way around as a first home buyer tends to fall in love with a property and “have to have it” consequently paying more than an investor would have done. Therefore the activities of property investors do not drive up the prices of houses.

“In addition” said Mr Evans “property investors do not get any special tax breaks. The same tax regime applies to any kind of investment.” He pointed out that Inland Revenue Deputy Commissioner Robin Oliver had confirmed this in a statement to the Finance Select Committee in June 2007. Deputy Commissioner Oliver had said then that rules about expenses for deducting costs such as interest, upkeep and maintenance, as well as paying tax on income were the same for property investment as for other investment businesses.

The New Zealand Property Investors’ Federation welcomed the Property Compliance Programme recently implemented by the Inland Revenue Department and many affiliated Property Investors’ Associations around the country were arranging for speakers from the IRD on the subject of compliance.

Contrary to often quoted statements, extra tax is not the answer to the housing affordability issue. Australia, the United States and Britain have had house price increases greater than those in New Zealand, in spite of the fact that each of these countries has a capital gains tax.

Mr Evans finished his submission to the committee by emphasising that private landlords around New Zealand are providing a valuable service. Through their investments they ensure that good quality housing is available to those who would not be eligible for Housing NZ accommodation. Property investors are responsible business people. Mr Evans believes that Committee members need to look at factors like the increased demand for housing caused by the level of net migration in recent times and the failure of central and local governments to respond to this increased demand in their search for a remedy to the unaffordability of housing issue.


Note for Editors

The New Zealand Property Investors’ Federation was established in 1983 and is the national body representing 4,700 property investors. There are 20 Property Investors’ Associations throughout the country affiliated to the NZPIF. These Associations have regular meetings with guest speakers on a variety of subjects related to property investment and run educational seminars for their members.

ENDS

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