24-03-2021

A summary of the Government's March 23 announcement of changes

1. News
2. 2021
3. March

The key components of the Housing Acceleration Fund are:

• an infrastructure fund (to unlock a mix of private sector led and Government led developments);
• additional funding for the Government’s Land for Housing Programme to accelerate development of vacant or underutilised Crown owned land, operate in more regions, and deliver a broader range of affordable housing options for rental and home ownership;

The Housing Acceleration Fund will be complemented by:

• a Kainga Ora Land Programme for strategic land purchases to increase the pace, scale and mix of housing developments (including more affordable housing).
• A refocused $350 million Residential Development Response Fund. This Fund was originally established to cushion the impact of COVID-19 on construction sector activity and jobs, but has not been required. The fund will focus on increasing affordable housing provision (rental and home ownership) on land owned by iwi and Maori groups, councils, community groups and private developers, through the Crown sharing some of the cost and risk.
• Extension of the bright line test from 5 to 10 years, excluding new builds, for property acquired on or after 27 March 2021 (Main homes and inherited property remain exempt).
• An in-principle decision to limit deductions for interest expenses on loans used to generate income from residential property. New builds will be exempt, and the design of the exemption will be consulted on.
• An increase in First Home Products (First Home Grants and Loans) income and house price caps for both new and existing properties in some locations, to enable more first home buyers to purchase homes. With the tax changes this provides a significant boost for first home buyers.
• A proposal to consult on limiting rent increases to once every 12 months per rental property (Link to page (rather than once every 12 months per tenancy), to help mitigate potential negative impacts on tenants from the tax changes.

You can read the press release on the Beehive website. Govt housing package backs first home buyers | Beehive.govt.nz

Tags: property tax - bright line - kainga-ora