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Rental Property WOF not needed

6 September 2012

Rental Property WOF not needed

The NZ Property Investors’ Federation is a strong supporter of insulating rental properties, but is against suggestions to introduce a Warrant of Fitness for rental property.

In early 2007, the NZPIF negotiated an insulation discount for Association Members to help encourage them to insulate their rental properties that were not already insulated.

Around a third of members around the country took up this opportunity. It was such a success that it was expanded to all rental property owners.

At the time, the Federation suggested that uptake would be even higher if there was a subsidy on insulation materials so that people could install it themselves. This scheme operates in England, but has not been introduced in New Zealand.

Rental Property Owners have been accused of not taking up the offer of subsidised insulation and have been threatened with regulation if they don’t. However the research for reaching this conclusion is seriously flawed. Regulation advocates say that only a small portion of landlords have taken up the Heat Smart programme and this is the reason for regulation. But this doesn’t take account of all the rental properties that already had insulation. It doesn’t take account of all the rental properties that were insulated under the NZPIF scheme with EECA. It also doesn’t take into account the fact that installers costs are such that it is often cheaper to pay full price for the insulation materials and DIY install them.

In addition to these points, the Heat Smart Programme was not initially available to rental properties and promotion of its availability to rental property owners was poor.

Government policies have also discouraged rental property owners from insulating their properties. The cost of insulating a rental property is not considered an expense, so it is not tax deductible. Depreciation of the insulation cost was a small benefit, but even that has been removed.

Another aspect of warm and dry rental properties is how they are used. If tenants don’t use heaters then insulation will have little effect in keeping a property warm. If curtains are drawn all through the day, then sunlight will not warm up the home. If windows are not left open occasionally to ventilate the property, the condensation and mould will form even when insulation is present.

If special interest groups and the Government want warmer, drier rental properties then there are better measures to undertake than a rental property Warrant of Fitness.


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