Taranaki Property Investors' Association

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taranaki@nzpif.org.nz

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10-10-2014

Election result good for tenants and landlords

 

I'm writing this the day after the election, grateful to the publishers for an extension in providing this article.

During the week leading up to the election I was wondering if NZ First was going to be the King Maker and if we would even have a Government by the time you read this. Thankfully the result was clear cut and Labour announced quickly that they couldn't form a Government.

The election result is good news for rental property owners and their tenants, in that a Capital Gains Tax, Ring Fencing and Changes to the RTA are not on the agenda for the next three years.

Rental price increases in New Zealand have been unexpectedly low over the last few years. It is highly likely that any additional costs or increases in regulation would result in higher rental prices.

In the immediate fallout of the election, some politicians on the left were still saying that NZ just doesn't get it, while others were saying that it was the political parties that had it wrong and they needed to listen to the voters. David Shearer was on TV firmly saying that Labour need to expand their policy positions to include Middle NZ.

If this occurs, perhaps two of the policies to change could be the Capital Gains Tax and Ring Fencing of rental property losses.

Despite our best efforts to raise it, Ring Fencing received little attention in the media during the election campaign. Capital Gains Tax, however, was a key policy issue for the left. The public were told that property speculators were the cause of housing un-affordability and that a CGT was the only way to stick it to those speculators, make them pay their fair share of tax and help get young Kiwis into their own home.

Selling the policy in this way was misleading however, and while the general public thought it was a great idea at first, support fell away as more information about it came out. This included:

  • Speculators capital gains are already taxed so they wouldn't be affected by the policy.
  • A CGT has not slowed down house price growth in any country that has introduced it.
  • It is a complicated tax that doesn't produce significant revenue
  • It applies to farms, businesses and shareholders as well as rental properties

On the other side of the political spectrum, Steven Joyce said that the Maori Party were likely to still be part of a National Led coalition and that they had been good for National. This was pleasing to hear as many of our tenants are doing it hard and it will be good for National to have the Maori Party reminding them of this.

The NZPIF will continue to meet with all political parties and advance the view that rental property owners provide an essential service to a third of New Zealanders. Anything that makes it harder for us to provide accommodation for tenants will ultimately hurt these tenants.

 

Tags: federation reports

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