Government’s Housing Tax Policy A Lose/Lose
The consequences of the interest deductibility tax announced as part of the Government’s housing policies are already being felt by landlords and renters alike, National’s Shadow Treasurer Andrew Bayly says.
“Often changes to taxes can be perceived to have winners and losers, but in the case of these changes the Government have managed to disadvantage both groups.
“Confusion as to when the changes come into effect and if the tax changes will be back dated is driving uncertainty and causing unnecessary stress resulting in many mum and dad landlords preparing to either put up rents or sell their properties.”
Mr Bayly says the interest deductibility tax is a failure of policy as the unintended consequences further exacerbate strains on the rental market.
“We are already seeing the effects of this decision from the Government according to Senior Economist Tony Alexander quoting his recent survey, ‘results show that about 74 per cent of the over 3700 respondents plan on raising rents more than they were planning’.
“It is not clear whether this is by design or accident, but with 600,000 rental properties in New Zealand, it is estimated that the Government is set to pocket up to $1 billion per year from the taxes that New Zealanders will no longer be able to have deducted.
“The Government says rising rents and evictions are not their problem, but National does not accept that they can walk away from the fall out of poor policy. What they call a solution to the housing crisis is, in fact, just causing another,” says Mr Bayly.