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Rents set to rise if Labour wins

Nearly three quarters of landlords would increase the rents they charge if Labour is elected and enacts its rental market proposals, a new survey reveals.

Thursday, September 14th 2017, 3:00PM 2 Comments

by Miriam Bell

Labour Party leader Jacinda Ardern

Over 800 landlords responded to an NZ Property Investors Federation survey on current industry issues and 73.6% of them said they would increase rental prices if Labour’s suite of rental polices became law.

Only 6.5% said that they wouldn't increase rents, while 19.9% were unsure whether they would or not.

When asked by how much they would increase rents, more than half of the respondents (54.8%) said they would increase them by between $20 and $40 a week, with 25.1% opting for a $20 per week rise.

According to the NZPIF, this gives an indication of the rental price increases tenants are likely to see if Labour’s rental property policies are introduced.

The survey also showed that for 36.4% of respondents it was very or extremely likely that they would sell their rental property if Labour introduced its rental policies.

A further 22.1% said that it was likely they would sell their rental property.

When asked about specific Labour rental property policies, survey respondents expressed significant concern about the prospect of a capital gains tax, as well as an end to negative gearing and the removal of the 90 day notice without cause option.

However, most respondents did not expect that the introduction of minimum standards for rental properties would have much impact on them.

Likewise, a majority of respondents were only somewhat or not concerned by the extension of the bright line test from two years to five.

Labour Party housing spokesperson Phil Twyford said that the NZPIF was scaremongering by releasing the survey findings.

But NZPIF executive officer Andrew King said that tenants deserve to hear from Labour how they are likely to be impacted by Labour’s policies in terms of rental prices and the supply of rental properties.

“Labour has not been able to say how long it will take to implement their proposed solution of a large increase in the number of new houses nor will they guarantee that this and taxing speculators, who are already taxed on their profits, will bring rents down.”

Labour Party finance spokesperson Grant Robertson has subsequently announced that any recommendations from its Tax Working Group would not be implemented until after the 2020 election.

He said that no one would be affected by any tax changes arising from the outcomes of the Tax Working Group, that Labour would establish if elected, until 2021.

"There will be no new taxes or levies introduced in our first term of government beyond those we have already announced."

That means the prospect of a capital gains tax is now off the cards until at least 2021.

Robertson also confirmed that the family home and the land around it would never be taxed and that there would be no inheritance tax.

But the party will crack down on those who are exploiting weaknesses in the tax system by speculating in the housing market, he said.

“Labour will end the practice of negative gearing, and extend the current bright line test that taxes the capital gain on the sale of a property other than the family home to five years.”

Read more:

To CGT or not to CGT 

No winners from tenancy law tinkering 

Labour plans could force out landlords 

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Comments from our readers

On 15 September 2017 at 8:04 am Theoe said:
Do you really believe this crap?
On 21 September 2017 at 7:58 pm hsharkey said:
I am a landlord of 3 properties and I think a capital gains tax is fair. Why should profit from selling investment properties not be taxed? and profit from selling businesses? This system exists in Australia and likely many other countries. Increasing rents if Labour gets in sounds extraordinarily greedy and selfish. I really do cringe when I read the selfish viewpoints of so many landlords.

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Credit Union Baywide 5.65 4.75 4.75 -
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First Credit Union Special 5.85 3.35 3.85 -
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Heartland Bank - Online - - - -
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Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
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Westpac 4.59 4.15 4.09 4.49
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