“Labour’s interest deductibility change has been revealed as an $800 million tax grab on landlords,” says ACT Housing
spokesperson Brooke van Velden.
In Budget documents released today, Treasury told the Finance Minister
, ‘…had the interest deducibility denial been fully implemented in 2018/19, and current interest rates prevailed, it may
have potentially generated tax revenue in the order of $800 million higher.’
“Now we know the real reason for Labour’s interest deductibility change. Rather than solving the housing crisis, it was
intended to line government coffers at the expense of Mum and Dad investors, most of whom own just one extra property.
“Labour's housing tax changes are divisive and unfair. They’re about blaming investors and they’ll do nothing to improve
“The change to interest deductibility will reduce the number of rentals, push rents up, and make it harder for Kiwis to
save for their first home.
“Treasury officials also agree
that the Government’s housing package will fail to solve the housing crisis:
‘Despite the sizable investment this package proposes, we think it is highly likely that housing outcomes for
non-homeowning New Zealanders, among whom Māori and Pacific peoples are heavily overrepresented, will continue to
“They also point out that the housing crisis is not a tax issue:
‘The underlying driver of housing unaffordability is the lack of responsive and affordable housing supply.’
“Treasury’s predicted slowdown in house price inflation hasn’t occurred. House prices have reached levels it predicted
in three years after just three months. The average value of a home is now $922,421. That price wasn’t expected by
Treasury until March 2025.
“ACT has put forward a package that would solve the underlying problem in housing: the shortage of urban land. We need
new ways to fund and build infrastructure, new coordination between central and local government, new rules for
consenting land, and new ways of accessing building materials.
“We have proposed a GST-sharing scheme, we’d remove barriers to finance for build-to-rent schemes and we’d introduce a
Public-Private Partnership Agency – the Nation-Building Agency.
“The Government should be asking ‘how do we create an environment for investment and development?’ Instead, this
Government has targeted Mum and Dad landlords and investors with new housing taxes. By failing to ask the right
question, it has failed to deliver on the very thing New Zealand needs it to - meaningful change so New Zealanders can
build more homes.”