There is good news today for home buyers as the Government continues to deliver on its promise to tilt the property market away from property speculators by curbing their ability to deduct their interest costs.

It is also taking further steps to ensure that those earning more than $180,000 a year pay the right amount of tax.

“This is in stark contrast with National, which this week admitted it wanted to hand the largest tax cuts to those earning more than $180,000 and give big tax breaks to property investors – at the expense of first home buyers and owner occupiers,” Finance Minister Grant Robertson said.

Revenue Minister David Parker said National was crying crocodile tears about the cost of living.

“National is pretending to care about those doing it hard, yet it is planning to target tax breaks to the highest earners, rather than those most affected by rising prices.

“We have given real support to those on middle and lower incomes helping them make ends meet. We will always back the engine room of New Zealand – the people who drive the economy – as well as properly fund health, education and the other essential services we all maintain by paying our fair share of tax.”

Grant Robertson said almost 60 percent of families would get an increase to Working for Families of an average $20 a week from April 1, while superannuitants and students would also see an increase.

“This week we also moved quickly to reduce the tax on petrol to help New Zealanders ride out the current international oil price crisis.

“This highlights the importance of supporting those most effected by the cost of living increases across the board,” Grant Robertson said.

The Government on Thursday aims to pass the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill, which finalises the limits on deductibility of interest expense incurred by residential property investors from 1 October 2021.

The policy was announced in March 2021, and the Bill has been carefully designed to reduce investor demand while still encouraging the building of new homes.

“We want to level the playing field and make it easier for first-home buyers to secure a home, while also ensuring there are no obstacles to supply. There are exemptions for land businesses, property development and new builds from the interest limitation rules.

“It also makes owners of new builds subject to a 5-year bright-line period, rather than the current 10-year period.”

The Government in 2020 announced increased reporting requirements for trusts to gain insights into the use of trusts and help identify if they are being used to avoid paying the top 39 percent rate.

Today David Parker announced consultation on the rules dealing with dividends to further protect the integrity of the top tax rate.

“Our top tax rate of 39 percent only affects the top 3 percent of earners – those on more than $180,000 a year. It is important these people pay tax at the rate they are required to, regardless of whether they earn that income through a salary, being self-employed, or through a company.”

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