11 April 2012

Property Investors welcome most of productivity report into housing

Although initially dubious about the need for another report into Housing Affordability, the NZ Property Investors’ Federation (NZPIF) is pleased to have many of its assessments backed up by the Productivity Commission.

Regarding taxation, the NZPIF agrees with the commission that “whether to adopt a capital gains tax on housing should be based on a coherent set of principles that have general application, not just to housing”.

The Federation is pleased that the Commission agrees with their own report to the Tax Working Group that ring-fencing losses on residential rental investments from other taxable income is not called for.

NZPIF President, Andrew King, said that he was particularly pleased with the Commissions view on how housing is taxed. “The Commission saying that the tax advantages attached to housing are not as large as often claimed backs up what we have been saying for many years and further backs up comments by the Society of Accountants and even the IRD themselves” says King.

However the Federation is concerned with the Commissions recommendations on low income housing and saying that the private sector does not have a place in this segment.

“Private landlords already house the majority of low income households in New Zealand very effectively” says King. “This seems to be confirmed by the Commission as well, saying that rental prices have not kept pace with other cost increases, implying that rental prices have been kept lower than they might have been. Given this, it seems odd that they recommend giving more state assets and ongoing financial support to the community housing sector so they can build up in competition to the private sector.”

ENDS

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