“The Government is rushing through the Housing Tax Changes (Interest Limitation Rules) before 1 October under urgency in
order to lay their hands on an extra $800 million,” says ACT Deputy Leader and Housing spokesperson Brooke van Velden.
“From October 1, most residential property investors will no longer be able to deduct interest as an expense when paying
tax.
“On Monday, Grant Robertson said that there would be no Select Committee process for mum and dad investors to have their
say on the proposed new law.
“Removing interest deductibility is a tax grab. It is intended to line the Government coffers at the expense of Mum and
Dad investor to the tune of an estimated $800 million.
“We still don’t know what the rules look like, and what the Government deems to be a “new build.”
“These changes are divisive and unfair. They’re about blaming investors and are a new source of revenue for the
Government, but won’t do what they’re touted to do – improve housing affordability.
“A majority of economists, academics and property experts believe the Government’s housing changes will be paid for by
tenants. This divisive policy targets residential property investors but it will actually squeeze the middle class and
hurt some of the most vulnerable people in New Zealand.
“Since signalling these changes, house prices have reached their highest levels yet. The average value of a home across
New Zealand is now over $1 million and increased 27 percent since September 2020.
“ACT believes the changes won’t address housing affordability. They will hurt renters and make it harder for Kiwis to
save for a first home.
“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 – meaning change so New Zealanders can
build more homes.
“The official advice the Government received on interest deductibility changes said that it would put rents up, force
landlords to sell and hurt renters. It estimated it would add a cost of over $4000 to the average landlord, it's likely
renters are the ones who will have the costs passed on to them.”