Labour’s Renter’s Tax Confirmed
“The official advice the Government got on interest deductibility changes backs up the many stories ACT is hearing from landlords and the experts,” says ACT’s Housing Spokesperson Brooke van Velden.
“The Ministry of Housing and Urban Development’s advice to the Housing Minister was that the removal of interest deductibility could put rents up, force landlords to sell, and hurt renters.
“Denial of interest deduction ‘would add a cost of $4,125’ to the average landlord.
‘We expect most landlords may consider increasing rents’, said HUD.
“Some landlords are ‘likely to sell’ with potentially significant consequences for renters:
‘If a number of landlords choose to sell, the associated “churn” in the rental market can impose significant costs on renters…frequent moves can be detrimental to health and wellbeing. There is a risk that for some renters in the lower-priced parts of the rental market, that they will not be able to find a new rental property at a price they can afford. This could lead to either further pressure on emergency special needs grants, transitional and public housing, or to overcrowding to enable rent to be affordable.’
“Let’s be clear: The change to interest deductibility is a Renter’s Tax.
“All of the stories ACT is hearing at act.org.nz/housingstories confirm that.
“Landlords are telling us ‘I’ve kept rents below the market rate for several years, but these changes will force me to hike them, and I don’t know if my tenants will be able to afford it.’
“A majority of economists, academics and property experts believe the impacts of the Government’s housing changes will be borne by tenants.
“More than a dozen experts surveyed expect rents to increase due to higher tax bills faced by residential property investors.
“This divisive policy targets residential property investors, but it will actually hurt some of the most vulnerable people in New Zealand.
“Labour just doesn’t get it. We can’t tax and regulate our way out of a housing crisis. We need to make it easier for the private sector to build houses. The Government’s Healthy Homes rules, foreign buyer ban, KiwiBuild, and myriad other policies have all failed for the simple reason that they misdiagnose the problem.
“ACT’s answer is for the next generation to build like the Boomers. ACT would radically overhaul infrastructure funding, through a thirty-year partnerships with central government for each region. We’d then replace the Resource Management Act with legislation designed to facilitate home building, and get councils out of the building consent business.
“Rather than dividing, the Government should be uniting New Zealanders behind good ideas.”