1 in 7 Akl houses now going to big property speculators

Speculators are running riot in the Auckland housing market making life tougher for first home buyers, says Labour’s housing spokesperson Phil Twyford.

Newly released data from Core Logic shows a 40 per cent increase in the share of house sales going to investors who already own five or more properties. Nearly 6000 homes were bought by speculators in this category in the last year, out of 45,000.

“National has refused to shut down their speculator mates, allowing them to make a killing in a rising market at the expense of first home buyers.

“Speculators have leveraged up, with the help of tax breaks and the absence of any effective tax on capital gains. Now one in seven sales is going to speculators with five or more properties. Nearly half of these homes went to people who already own ten or more properties.

“It is time the Government finally stood up for first home buyers instead of encouraging the Auckland real estate market to behave like a giant Ponzi scheme. Speculators are driving house prices up and home ownership rates down.

“Labour will change the law so a speculator who sells a rental property within five years will pay income tax on any capital gain – no ifs, no buts. We’ve signalled we are going to shut down the tax breaks that allow speculators to write off their losses on rental properties by paying less tax on other business activity.

“Last year property speculators pocketed $650 million in tax breaks – a massive subsidy for speculation – while everyone else got up and went to work each day to pay their taxes. This has to stop,” says Phil Twyford.

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