NZPIF President's December report
07 Dec 2009
Department of Building and Housing confirms continued sponsorship. We have been delighted to learn this week that the Department of Building and Housing will again sponsor the Landlord of the Year Award in 2010. We have very much appreciated the Department ‘s support of the annual NZPIF Conference and it is very significant that they have also become the major supporter of this annual Award, designed to highlight the professional ism of the many PIA members who are landlords. Jeff Montgomery, client services manager, has personally given much time to this event. He has been on the Judging Panel each year and has arranged to visit a number of PIAs, at no cost to the PIA concerned, during the next few months to promote the benefits of entering the Award. Other PIAs who have not yet booked him to come and present to one of their meetings can contact him at jeff.montgomery@dbh.govt.nz to make arrangements. Good uptake of TINZ offer I was pleased to learn that a number of members have taken up the excellent offer NZPIF has been able to negotiate with Tenancy Information New Zealand (TINZ). This offer includes a free subscription to TINZ for members of affiliated PIAs and $16 plus GST per enquiry, taking the price back to the price Veda Advantage was charging prior to their last increase to $26.50. As I said last month, it is important that this new partnership is seen by TINZ to be a reciprocal arrangement. The more members who sign up, the more valuable the relationship will be for both sides. The details of the TINZ offer are here if you missed seeing them last month. Waikato PIA runs successful Tenant of the Year competition Congratulations to Waikato PIA for the success of their first Tenant of the Year competition and for the considerable publicity they achieved. CPIA and other PIAs have run a number of Garden of the Year competitions and these have always been very popular. The criteria for the Waikato PIA competition included looking at the relationship between tenants and landlords, maintenance and care of the property, maintenance and care of the grounds, relationship with neighbours and the surrounding community, plus rent paid on time, every time. There was an overall winner and winners of five other categories. An impressive array of prizes for the winners had been organised. For more details go here Report from Tax Working Group (TWG) Conference. Andrew King, Thomas Chin and I attended the TWG’s last public conference for the year on Tuesday December 1. Attending this conference gave us the opportunity to meet the group members and to put forward our views. We were also able to find out the areas on which they were focusing and their aims and objectives. The main tax initiatives they are promoting in their scenarios are increasing GST to 15 %, removing depreciation losses from rental properties, introducing a land tax, ring fencing residential rental property, and introducing a capital gains tax on residential rental property, or introducing a RFRM, whereby an investor’s equity would be taxed at around 6% per annum. These new taxes would allow a 30/30/30 system to be implemented - that is personal tax rate, company tax and trust tax all with a maximum of 30%. It appears obvious that one or more of these taxes will be imposed on residential property investors. At this stage if we were to pick a preference, it would be a capital gains tax as all the others would immediately affect members’ cashflows. A capital gains tax is in the future and can be planned for. We intend to lobby MPs that only 50% of capital should be taxed (as in Australia), or that $30000 should be tax free (as in the UK), or capital should be taxed at 10% (as in parts of USA). We also intend to lobby to ensure that existing investment properties are excluded. It seems that a capital gains tax would appease the public’s hunger to see property investor bearing some of the tax burden. However, a capital gains tax would only affect buy and hold property investors and bach owners, who rarely sell their properties. Other property investors are already liable for a capital gains tax. The TWG members agreed with us that, to ensure a fair playing field, in this scenario any capital losses would have to attract tax refunds. We also made them aware that if they deter residential property investment, there may not be enough rental accommodation in the future. The Tax Working Group will report to the government mid December. NZPIF has already begun lobbying MPs Still waiting for the second reading of RTA Amendment Bill In his November report, Thomas Chin noted that the RTA Amendment Bill was still waiting for a second reading and that this had been scheduled for December. We will be keen to see further progress on this. Thomas writes a monthly report, which is posted on the news section of the NZPIF website when it is received. Go here to read his November report. Best wishes for Christmas and the New Year Most PIAs will now be in recess until February. Best wishes for an enjoyable and well deserved break. I hope that all PIA members will have a very happy Christmas and New Year with families and friends. Martin Evans NZPIF President.
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