20 May 2015

Tax test will only impact 1000 house sales

The Government’s proposed test to tax property investors is likely to affect less than 2 per cent of all house sales, Opposition Leader Andrew Little says.

“Based on modelling by the Treasury in 2010, John Key’s bright line test is likely to impact a maximum of 1000 of the nearly 80,000 house sales each year and raise just $18 million.

“That is pathetic when over 40 per cent of sales are to property investors and worth billions of dollars. A tax which only applies to sales within this arbitrary period will not deter the land-bankers and will only capture the small number of short-term, buy-and-flick speculators.

“This policy is rushed and ill-conceived. Even the Finance Minister says he doesn’t know what effect it will have. Well we’ve done the sums for him.

“At the same time Bill English is signalling the Government will free up Crown-owned land in Auckland for housing.

“This is a no brainer and should have been done six years ago.

“However, if the Government’s Special Housing Areas (SHAs) are anything to go by, it doesn’t bode well for those trying to break into Auckland’s runaway property market.

“The Government has failed to invest properly in infrastructure in SHAs, established weak requirements for the proportion of affordable housing they contain and taken far too long to get homes built.

“Bill English says National’s ad hoc and last minute housing initiatives are part of a big picture that will be revealed on Budget Day. Sadly this appears to be as much of a dream as the chance many Kiwis now have of owning their own home,” Andrew Little says.

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