The Federation argued against the notion that current tax policy and laws treated the buyers of a rental property more favourably that other asset classes and that property investors were not the cause of housing un-affordability.
The Federation also told the Committee that property investments were taxed the same way as everything else and that buying rental property is the equivalent of having gone into business - the landlord business.
The Federation further argued that implementing a capital gains tax or changing the deductibility rules would not improve housing affordability but would actually penalise tenants by driving up rents.
Finally, professional property investors were not driving the market instead vendors and private owner-occupiers were a more significant influence.
Elsewhere, commentators and the media (e.g. NZ Herald editorial 13/2/08) continued to call for a restructure to the tax system in the belief that the demand from investors would drop, there would be less money driving up the price, and supply/affordability would improve.
Interestingly, in the Government’s outline of its plans for 2008 (Helen Clark’s speech to the opening of Parliament on 12 February) the Prime Minister made considerable mention of a range including initiatives to assist housing affordability. The declared program did not mention tax changes to investment property.
REAL ESTATE AGENTS BILL – Submissions closed
The bill replacing the Real Estate Agents Act 1976 proposes a new regulatory framework for the real estate industry including licensing requirements and licensing procedures. The Justice Select Committee is scrutinizing these and other matters.
The real estate industry is likely to see massive changes, if the bill proceeds as drafted. The Federation and its members can view the bill as being instructive and as an early warning for the tone the Government could potentially adopt with property investors. (e.g. The Minister in charge of the Bill, the Hon Clayton Cosgrove has suggested that agents as land sharks and rogues). Accordingly, maximum political nous and a harnessing of the collective landlord voice in dealings with the Government moving forward will be absolutely imperative.
Written submissions on the Bill closed 29 February.
The Committee is expected to report back to Parliament by 10 June 2008.
HOUSING AFFORDABILITY BILL – Submissions closed
Written submissions to the Local Government Select Committee, examining the Affordable Housing: Enabling Territorial Authorities Bill closed 29 February.
The Committee’s report to Parliament is to be filed by 10 June 2008.