National’s policies locking families out of homeownership

New data shows why a capital gains tax on investment properties is needed to stabilise the housing market and give families a fair shot at buying their first home, Green Party housing spokesperson Holly Walker said today.

The Westpac Property Investor Report, released today, shows that the annual capital gain for investors in Auckland was as high as 19 percent last year. Income earned from capital gains is usually untaxed in New Zealand.

“National is letting speculators make tax-free profits on housing while Kiwi families are being locked out of ever owning their own home,” said Ms Walker.

“The lack of a capital gains tax on investment properties gives speculators a tax advantage that allows them to outbid families time after time.

“The tax-free profits to be made from housing speculation draws more and more money into the housing market, pushing up prices at an unsustainable rate.

“Since 2001, the homeownership rate for people in their thirties has plunged from 54.6 percent to just 43 percent. Between the last two censuses, the number of rentals increased by 60,000 while the number of houses owned by the people who live in them rose by just 28,000.

“As long as speculators can make tax-free profits on housing, our homeownership rate will keep on falling,” Ms Walker said.

The report also showed that the most profitable neighbourhoods for property investors were some of the lowest-income suburbs in the country, including Cannon’s Creek in Porirua, Wainuiomata in Lower Hutt, and parts of South Dunedin.

“We should not be celebrating the fact that the biggest gains for property investors come from the poorest communities,” Ms Walker said.

“Low-income families who rent their homes face insecure tenancy, increasing rents, and poor quality homes. Many are locked into the rental market by the high cost of renting and new LVR restrictions.

“The Green Party will stabilise the housing market, making housing speculation less attractive, and giving families an affordable pathway to owning their own home.

“In Government, the Green Party will undertake a programme of building affordable houses and state houses to take the pressure off the market. We will introduce a capital gains tax (excluding the family home) and restrictions on foreign investors to dampen housing speculation. We will strengthen the rights of tenants to negotiate a secure tenure and limit rent increases, and introduce a mandatory Warrant of Fitness for all rental properties. Our Progressive Ownership policy will allow families to ‘rent-to-own’ government-built houses at an affordable price,” said Ms Walker.

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