Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Loss ring-fencing ups war on renters and owners


The largely unreported end of the ability of rental property owners to claim losses against other income shows that the Government is unaware of the scale of the problem it is creating with accommodation, Tenancies War spokesman Mike Butler said today

The Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill quietly became law while we were distracted with a Cabinet reshuffle that demoted Housing Minister Phil Twyford.

Under the vague sub heading “Allocation of deductions for excess residential land expenditure”, the omnibus tax Act:

(a) limits a person’s deductions for expenditure incurred in relation to residential land to income derived from the land;

(b) suspends deductions for the excess expenditure for the income year in which the expenditure is incurred;

(c) provides that the excess amounts are carried forward to later income years in which the person derives residential income; and

(d) releases the excess amounts on fully-taxed disposals of land.

Inland Revenue said in various statements that 116,000 owners declared an average loss of $7138 ($137 a week) on earnings in the 2016/17 tax year, bringing an average tax benefit of $2000 a year to each, creating a total cost of $232-million to them.

“The Minister responsible for this, Revenue Minister Stuart Nash, is probably unaware that losses accrue at the first stages of a property investing career, and that as debt is reduced and income increases, investors become taxpayers, with some paying tens of thousands of dollars in tax each year,” Mr Butler said.



“Rental property owners who are losing money now face a choice -- raise the rent to cover the loss, absorb the loss to apply it in the future to any profit, or sell,” he said.

“With rents at historic highs it is unlikely owners could add an average extra $137 every week to rents,” Mr Butler said.

“This means owners must choose between hanging on or selling,” he said. “The short answer is to sell, with stand-alone dwellings going to first home buyers.”

“With loss-making owners selling and the prospect of an extended and more fraught period of trading at a loss creating a barrier to new investors, the Minister has just sped up the reduction of the supply of rental property,” Mr Butler said.

“As a result, rents will continue to rise and homelessness will increase,” he said.

The problem for everyone is that the Government is in denial that the policies it is enacting to solve a housing crisis are making the crisis exponentially worse, Mr Butler said.

Labour, New Zealand First, and the Green Party voted in favour on the third reading of the bill on June 20, while National and Jamie Lee Ross voted against it. Hansard has no record of a vote by the ACT Party.

Stop the War on Tenancies is a group that since last October has been highlighting the evidence that successive governments have ignored while creating rental property policy.

ends

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

SCOOP COVERAGE: CHRISTCHURCH MOSQUES TERROR ATTACK


Gordon Campbell: On Trump’s Open White Nationalism

At one level, this has been the week that the Republican Party of Abraham Lincoln – which once led a civil war that ended the slave economy of the South – has now defined itself openly as being the party of white nationalism.

By telling those four elected, American born and/or raised women of colour to “go home”, US President Donald Trump’s racist agenda has come out of the shadows. More>>

 

RNZ: Trades Hall Bombing Case Re-Opened, Evidence Released

The cold case has been reopened and the police have recently revealed more details about the bomb's components - including that it was wrapped in a 1977 edition of The Evening Post. More>>

Safety: Govt Targets Fewer Deaths On The Road

“Most roads deaths and serious injuries are preventable and too many New Zealanders have lost their lives or been seriously injured in crashes that could have been prevented by road safety upgrades,” said Associate Transport Minister Julie Anne Genter. More>>

ALSO:

Pay Rise Delay: Teachers Unions Plan Legal Action Against Novopay

Both of the teachers unions - NZEI and the PPTA - have confirmed they will be taking legal action against Novopay. More>>

ALSO:

Emission Statement: 'Consensus Reached' On Agriculture

Today the Government launched a consultation document, informed by the work of the Interim Climate Change Committee (ICCC), on how to bring agriculture into the emissions trading scheme, a key part of the Government’s plan to tackle climate change and reduce New Zealand’s emissions. More>>

ALSO:

Gordon Campbell: On What’s Wrong With Wellington

For many Wellingtonians, it hasn’t been the normal hardships – the workings of central government and the lousy weather – that have recently pushed their tolerance into the red zone. It has been the inability of local government to maintain even the basics. More>>

ALSO:

$1m Compensation Paid: First Gun Ban Event In Christchurch

The Police Minister says the first ever firearms collection event in Christchurch over the weekend was a huge success. But Stuart Nash had concerns about whether the participation reflected the number of weapons in the region. More>>

ALSO:

The Kids: Youth Parliament 2019 Event Kicks Off

120 Youth MPs and 20 Youth Press Gallery members have gathered in Wellington to attend the two-day Youth Parliament event ... More>>

ALSO:

Friends Like These: Foreign Minister To Visit USA

Deputy Prime Minister and Foreign Affairs Minister Winston Peters will travel to Washington D.C. today for talks with senior members of the US Administration, and to attend the Ministerial to Advance Religious Freedom. More>>

ALSO:

Gordon Campbell: On The Aussie Banks’ Latest Fee Hike Excuse

When the Reserve Bank sought feedback on its plans to require the country’s major banks to raise their capital reserves then you might have expected the banks to whine and complain. And so they have. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels