Is there a ‘war’ on landlords?
Mum and dad Landlords are under attack from the Government, and the “war” has led to higher rents and too much red tape, opposition politicians say.
The accusations are not new, with Politicians and Landlord groups making them regularly since Labour formed a Government in 2017.
Here’s what you need to know.
Tax policies affecting Landlords have been changed and this includes extending the bright line test, which taxes profits from the sale of an investment property, to 10 years, and removing the ability to deduct mortgage interest on rental properties from taxes.
Letting fees have been banned, and healthy homes standards, which set minimum requirements for heating, insulation, ventilation, moisture, drainage and draught-stopping in rental properties, have been introduced.
Tenancy law has been overhauled, and that included banning no-cause terminations, limiting rent increases to once a year, and allowing tenants to make small changes, such as quake or baby proofing to their rental.
The Government’s tenancy law reform is intended to make it fairer for tenants.
National Party housing spokesperson Chris Bishop says the removal of interest deductibility is unprincipled because a fundamental principle of tax law is to tax profit, not revenue.
It is leading to higher rents and putting pressure on the state house waiting list and emergency housing, which makes it a Tenant’s tax, he says.
ACT deputy leader Brooke van Velden says the tenancy law reforms have skewed the rental market balance too far away from Landlords.
Removing no-cause terminations mean it is harder to get rid of problem tenants, and that has left Landlords unwilling to risk renting to more marginal Tenants, she says.
Housing Minister Megan Woods says the tax changes have specific aims, which are to encourage new builds and to shift the balance back to first home buyers.
The strong level of construction will help keep rental inflation down, she says.
The Government is committed to turning around the housing crisis by increasing supply, including rental properties, she says. That is why it is exempting build-to-rent developments from the interest deductibility changes.
Changes to tenancy law are intended to make renting fairer for tenants, she says.
What would the opposition do differently?
If elected to lead the government later this year, both National and ACT would reverse the new interest deductibility rules for rental properties.
National would return the bright line test to two years, while ACT would get rid of it entirely. Van Velden says ACT would re-introduce the ability for landlords to give no-cause notices to end a Tenancy