Labour lines up prop­erty spec­u­la­tors

Auckland City Harbour News - - YOUR PAPER, YOUR PLACE - TRACYWATKINS

Labour is lin­ing up prop­erty spec­u­la­tors by clamp­ing down on tax loop­holes to even the play­ing field in favour of first home buy­ers.

In a hard hit­ting speech to Labour’s elec­tion year congress, leader An­drew Lit­tle said the loop­hole that let prop­erty spec­u­la­tors off­set losses from their rentals against other in­come for tax pur­poses would be closed.

‘‘Labour will close the tax loop­hole that al­lows spec­u­la­tors to claim tax­payer sub­si­dies for their prop­erty port­fo­lio,’’ Lit­tle said.

‘‘Right now, spec­u­la­tors can take losses from their rentals and off­set that against their per­sonal in­come. It al­lows them to avoid pay­ing tax.

‘‘This loop­hole is ef­fec­tively a hand-out from tax­pay­ers to spec­u­la­tors. It gives them an un­fair ad­van­tage over Kiwi fam­i­lies.’’

Un­der the pro­posed change so­called ‘‘mum and dad’’ in­vestors who bought rentals as a long term in­vest­ment would not be af­fected as most of them did not use the loop­hole, Lit­tle said.

Those that did would have time to ad­just.

‘‘This pol­icy is about the big spec­u­la­tors who pur­chase prop­erty after prop­erty.

‘‘It’s about those big time spec­u­la­tors who are tak­ing tens of thou­sands of dol­lars a year in tax­payer sub­si­dies as they hoover up house after house.’’

New Zealand could not de­fend hand­ing out sub­si­dies to prop­erty spec­u­la­tors when most young cou­ples could not af­ford to buy their first home, Lit­tle said.

The change would save about $150m a year once fully im­ple­mented, with the money be­ing di­verted to Labour’s healthy homes pol­icy.

Home­own­ers and land­lords would be able to get up to $2,000 to­wards the cost of up­grad­ing in­su­la­tion to mod­ern standards or in­stalling heat­ing.

Over a decade, that would add up to 600,000 homes, cost­ing $1.2 bil­lion.

Fi­nance spokesman Steven Joyce said the an­nounce­ment was a re­hash of Labour’s 2014 hous­ing pol­icy and would have the op­po­site ef­fect on first home buy­ers.

‘‘It will sim­ply put up rents and prob­a­bly re­duce the amount of con­struc­tion in the hous­ing sec­tor.’’

What Labour was propos­ing was ef­fec­tively a new tax and ‘‘any time you put a new tax on any sort of sec­tor that sec­tor re­acts by slow­ing down.’’

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.