Property investors will pay more tax
Muriel Newman Speech to the Otago Property Owners Association AGM, Dunedin Public Library, Tuesday May 10, 7.30pm
“Property investors will pay more tax if Labour win a third term”; ACT Deputy Leader and Housing Spokesman told the
Otago Property Owners Association today.
“Property investors should be aware that Labour is no friend of theirs. Not only are they planning to change the
depreciation rates on residential property to collect another $30-50 million off property investors, but they have
already scrapped the opportunity for “tax-free gains from personal effort such as ‘do-it-yourself’ renovations” that
they had identified with the introduction of the new Building Act.
“These moves to reduce the “inherent tax benefits associated with rental property” were spelt out in an official report
to the Minister of Finance produced by the Treasury in response to a letter from United Future MP Gordon Copeland.
“In their Executive Summary, Treasury Officials wrote: “Gordon Copeland, United Future MP, has written to you suggesting
that tax-driven investment in residential rental property is a problem, crowding out other business investments and home
ownership”.
The report goes on to state that the approach suggested by Mr Copeland of treating the capital gain in value of rental
properties as income by assuming that the properties were acquired with an intent to sell, ‘would amount to a de facto
capital gains tax on rental property’.
“But, introducing new taxes – including a capital gains tax on rental property is not all that’s in store for private
property investors.
“The Labour Party has already identified their agenda with regard to residential rental property. It will include the
registration of tenancies, the introduction of a ‘warrant of fitness’ check for rental properties and the regulation of
landlords.
“Commonsense tells us that it is in everyone’s interests to encourage improvements in standards using industry
self-regulation. Yet Tenancy Tribunal statistics show that almost 90 percent of claims are against tenants.
“While there are inevitably some bad landlords-and there are some very harsh penalties in the law that should be applied
to them–it appears that the major problem faced by the industry is a predominance of bad tenants. If registration were
to be considered at all, surely it should be those tenants with a history of causing major problems who should be
targeted rather than landlords
“Labour also appears committed to regulating for longer tenancies, introducing rent controls, increasing the legal
rights enjoyed by tenants and providing government funded advocates.
“With an election just around the corner, I would urge residential property owners to take a real interest in what
Labour is proposing. It has the very real potential to destroy residential property as a desirable investment for
retirement purposes.
“I am calling on you to support ACT in the build-up to the election, as the only party with a track record of working
hard for property investors. I also ask that you sign the petition on www.depreciation.co.nz to oppose labour’s changes
to the depreciation rates and to spread the message far and wide.
"Opinion polls show Labour is ahead, but if the 164,000 residential property investors actively promoted change, they
could be very influential in the shape of a new government after the election."
ENDS