New Zealand landlords in "All Blacks" mood over new tax talk

 

While landlords in the UK are basking in the sunlight of a golden period of rental growth, their counterparts in New Zealand are worried they will lose their businesses as a new tax is proposed by the Labour Government.

Landlords feel they are being targeted

New Zealand in common with many countries around the world is suffering from an economic downturn and house prices are the lowest they have been for many years. In the past this would be the ideal time for property investors with a little spare cash to increase their portfolio and purchase landlord insurance on new dwellings. Unfortunately the incumbent Labour Government is planning to implement a 15% capital gains tax which will automatically be levied on the sale of a property. The announcement has been greeted with dismay among the landlord fraternity and their organisations are accusing the Government of targeting them with the politics of envy.

Tenants will pick up the tab

The New Zealand Property Investors Federation (NZPIF) are outraged by the plan and say not only will it stop investors buying property, therefore plunging the market further into a downward spiral, it will also lead to tenants paying higher rents as landlords look to protect their investment. The NZPIF say there is no point to landlords buying rented property insurance on a home that will not give them any capital gain.

Plan could become policy soon

Phil Goff the leader of the Labour party has refused to talk about the proposed tax move. He says it is not yet official Government Policy but the leaked document suggests the tax would pull in $4.5 billion and that most of the party are in favour of the idea. This is not the view of opposition politicians. The tax has been ridiculed by all and sundry, the NZPIF assertion that it is the politics of envy has been echoed by independent members of Parliament and economists reckon the tax would be lucky to raise $700 million in 15 years as it would just stagnate the housing market with homeowners reluctant to sell if they had to hand over their profits to the Government. Landlords should know in the next week or two if the policy is to be implemented, with some saying one way tickets to Australia may be on the cards for many.

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