Property investors will pay more tax

Muriel Newman Speech to the Otago Property Owners Association AGM, Dunedin Public Library, Tuesday May 10, 7.30pm

“Property investors will pay more tax if Labour win a third term”; ACT Deputy Leader and Housing Spokesman told the Otago Property Owners Association today.

“Property investors should be aware that Labour is no friend of theirs. Not only are they planning to change the depreciation rates on residential property to collect another $30-50 million off property investors, but they have already scrapped the opportunity for “tax-free gains from personal effort such as ‘do-it-yourself’ renovations” that they had identified with the introduction of the new Building Act.

“These moves to reduce the “inherent tax benefits associated with rental property” were spelt out in an official report to the Minister of Finance produced by the Treasury in response to a letter from United Future MP Gordon Copeland.

“In their Executive Summary, Treasury Officials wrote: “Gordon Copeland, United Future MP, has written to you suggesting that tax-driven investment in residential rental property is a problem, crowding out other business investments and home ownership”.

The report goes on to state that the approach suggested by Mr Copeland of treating the capital gain in value of rental properties as income by assuming that the properties were acquired with an intent to sell, ‘would amount to a de facto capital gains tax on rental property’.

“But, introducing new taxes – including a capital gains tax on rental property is not all that’s in store for private property investors.

“The Labour Party has already identified their agenda with regard to residential rental property. It will include the registration of tenancies, the introduction of a ‘warrant of fitness’ check for rental properties and the regulation of landlords.

“Commonsense tells us that it is in everyone’s interests to encourage improvements in standards using industry self-regulation. Yet Tenancy Tribunal statistics show that almost 90 percent of claims are against tenants.

“While there are inevitably some bad landlords-and there are some very harsh penalties in the law that should be applied to them–it appears that the major problem faced by the industry is a predominance of bad tenants. If registration were to be considered at all, surely it should be those tenants with a history of causing major problems who should be targeted rather than landlords

“Labour also appears committed to regulating for longer tenancies, introducing rent controls, increasing the legal rights enjoyed by tenants and providing government funded advocates.

“With an election just around the corner, I would urge residential property owners to take a real interest in what Labour is proposing. It has the very real potential to destroy residential property as a desirable investment for retirement purposes.

“I am calling on you to support ACT in the build-up to the election, as the only party with a track record of working hard for property investors. I also ask that you sign the petition on www.depreciation.co.nz to oppose labour’s changes to the depreciation rates and to spread the message far and wide.

"Opinion polls show Labour is ahead, but if the 164,000 residential property investors actively promoted change, they could be very influential in the shape of a new government after the election."

ENDS

© Scoop Media