Proposed mortgage levy put to property conference
The Reserve Bank’s issues and international manager Bernard Hodgetts this week shocked attendees of a Real Estate Institute conference in Auckland with revelations that top Government officials are considering introducing a mortgage interest levy to stabilise the housing market.
Sunday, September 24th 2006, 10:28AM
by The Landlord
Auckland Property Investors’ Association CEO Ashley said that the spectre of the mortgage interest levy, which would charge people to borrow money, is the most important issue facing property investors to arise in the last 24 months.Senior Treasury and Reserve Bank staff first flagged the report earlier this year in a February report to Reserve Bank Governor Alan Bollard and Treasury Secretary John Whitehead as one of a number of policy options to ease house price inflation and reduce the need for higher interest rates
The bank said in the Supplementary Stabilisation Instruments report that an adjustable mortgage interest levy could be imposed on all housing mortgages to “force a wedge between the price paid for credit by mortgage borrowers and the returns available to the savers financing those loans”.
A spokesperson for the Minister of Finance told the New Zealand Property Magazine, “The government noted the Supplementary Stabilization Instruments report prepared by officials earlier this year – no action came out of that report, it was just noted”.
“There hasn’t been any research undertaken by the Treasury on any of the options put forward in the report since its release.”
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